What is the cost to set up a company in the UAE?

Costs vary by structure. Mainland companies start from AED 12,000-20,000 (including trade licence, office lease, and visa processing). Freezone packages range from AED 7,500-25,000 depending on the zone and number of visas. Additional costs include document attestation (AED 1,000-3,000) and annual renewals.

Can a foreigner own 100% of a UAE company?

Yes. Since the 2021 Companies Law reform, foreign nationals can own 100% of mainland companies in most business activities. Freezone companies have always allowed full foreign ownership.

How long does it take to set up a UAE company?

Mainland companies typically take 2-3 weeks (trade licence approval, office lease, visa processing). Freezone companies can be set up in 3-5 working days with virtual office options available.

Do I need a physical office to set up a UAE company?

Mainland companies require a physical office lease (Ejari). Freezone companies can use flexi-desks or virtual office packages, which are significantly cheaper.

UAE Commercial Lease Guide 2026: Offices, Shops and Warehouses

Quick Answer: Renting commercial space in the UAE. This guide covers lease terms, Ejari registration, VAT, deposits, rent increases, and what to check before you sign.

Renting commercial space in the UAE is not the same as signing a flat lease. Different rules apply, different costs hit you, and the consequences of getting it wrong - from missed VAT to invalid Ejari - can be expensive.

Whether you’re taking on a small office, a retail unit, or a warehouse, here’s what you actually need to know before putting pen to paper.

The Basics: What Makes a Commercial Lease Different

Commercial leases in the UAE carry a 5% VAT charge on top of the agreed rent. Residential leases do not. This is the first thing most new business owners miss when budgeting.

If your annual rent is AED 120,000, your actual cost is AED 126,000 once VAT is added. The landlord is required to issue a tax invoice if they are VAT-registered. If your own business is VAT-registered (turnover above AED 375,000), you can reclaim this input VAT.

Beyond VAT, commercial leases are governed by:

Dubai: RERA (Real Estate Regulatory Agency) under Law No. 26 of 2007 and its amendments
Abu Dhabi: Department of Municipalities and Transport (DMT)
Other emirates: Local municipality rules; generally less regulated than Dubai

Ejari Registration (Dubai)

If you are renting commercial space in Dubai, Ejari registration is mandatory. Ejari is the Dubai Land Department’s official tenancy registration system. Without it, your tenancy contract has no legal standing.

Cost: AED 220 online (via the Dubai REST app) or AED 350 at an approved typing centre.

What you need:

Signed tenancy contract
Emirates ID (tenant and landlord or authorised agent)
Title deed of the property
Trade licence (for commercial tenancies)

The Ejari certificate is issued within a few minutes online. You’ll need it to apply for utilities, set up DEWA, and in some cases to open a bank account.

In Abu Dhabi, the equivalent is Tawtheeq - the municipality’s tenancy contract registration system. It follows a similar process.

Typical Lease Terms

Type	Typical Term	Notice Period
Office (fitted)	1-2 years	90 days
Office (shell and core)	2-5 years	90-180 days
Retail (mall)	2-5 years	90-180 days
Warehouse	1-3 years	90 days
Business centre (flexi)	Monthly to 1 year	30-90 days

Most commercial leases in the UAE are fixed-term. Breaking early typically means forfeiting the security deposit and, in some cases, paying the remaining rent balance or a break penalty.

If you need more flexibility at the start, consider a business centre or serviced office instead. These cost more per square foot but offer monthly contracts with lower upfront commitment. For a guide on that option, see UAE Virtual Office Guide.

Deposits

The standard security deposit for commercial space is 5-10% of the annual rent, paid at lease signing.

For a AED 150,000/year office, expect to pay AED 7,500-15,000 upfront as a deposit, held until the lease ends.

Deposits should be:

Paid by cheque or bank transfer (get a receipt)
Typically returned within 30-60 days of vacating, subject to the terms in your contract and any deductions for damage beyond normal wear and tear (no statutory timeline for commercial tenancies in Dubai; allow up to 90 days in practice)

There is no formal RERA deposit protection scheme for commercial tenancies equivalent to the residential one, so make sure the deposit terms are clearly written into the contract.

How Rent Is Paid

The UAE still runs heavily on post-dated cheques for rent. Landlords typically request 1 to 4 cheques covering the full year upfront. Paying in fewer cheques often gives you negotiating leverage for a lower rate.

Examples:

1 cheque for the full year: best deal on rent, but requires the full cash amount upfront
4 cheques (quarterly): standard; slight premium vs 1-cheque deals
12 monthly cheques: convenience premium; landlords often add 5-10% for this flexibility

If the landlord accepts bank transfer, confirm this in the contract. Some landlords request cheques regardless of preference.

Rent Increases: Dubai Rules

In Dubai, landlords can only increase rent at lease renewal if there is a gap between what you pay and the RERA rental index. The RERA Rental Increase Calculator (available at dubailand.gov.ae) tells you the maximum permitted increase.

Rent increase caps in Dubai:

Gap below market rate	Maximum permitted increase
Less than 10% below	0% (no increase allowed)
11-20% below	Maximum 5% increase
21-30% below	Maximum 10% increase
31-40% below	Maximum 15% increase
More than 40% below	Maximum 20% increase

The landlord must give 90 days written notice before the lease ends to raise rent. If they fail to give notice in time, the rent cannot change for the next lease period.

Outside Dubai, rent increase rules are less standardised. In Abu Dhabi, the government periodically issues guidance, but there is no equivalent fixed calculator.

Service Charges

Commercial tenants in managed buildings, business parks, and malls often pay service charges on top of rent. These cover maintenance of common areas, security, HVAC in common zones, and building management.

Service charges can add AED 20-100 per square foot per year depending on the building quality. Always ask for the service charge rate before agreeing to a lease - it’s often quoted separately and can add 20-40% to your effective cost.

In a mall, service charges may also include a percentage of turnover contribution to the centre’s marketing fund.

What to Check in the Contract

Before signing, make sure the contract addresses:

1. Who is responsible for fit-out? Shell and core units are handed over bare - four walls and nothing else. Fitted units come with flooring, lighting and partitioning. Fit-out costs for an office can run AED 200-800 per square foot depending on spec.

2. Is sub-letting permitted? Some leases prohibit sub-letting entirely. Others allow it with landlord consent. Check this if you might want to bring in co-tenants later.

3. Are there rent-free periods? In a soft market, landlords often offer 1-3 months rent-free to allow for fit-out. This is standard in new buildings and worth negotiating on any fit-out unit.

4. What are the reinstatement obligations? You may be required to remove fit-out and restore the space to its original condition at the end of the lease. This can be expensive. Clarify this upfront.

5. Business activity restrictions? Some commercial units restrict specific activities. A business park might not allow retail. A free zone unit is often restricted to the activities on your licence. Your lease must match your trade licence activity.

Speaking of licences - if you haven’t set up your business yet, see How to Register a Company in the UAE before committing to office space.

Costs Summary

Cost	Estimate
Rent (varies by location/size)	AED 40,000-500,000+/year
VAT on rent (5%)	5% of annual rent
Security deposit	5-10% of annual rent
Ejari registration (Dubai)	AED 220-350
Fit-out (if shell and core)	AED 200-800/sq ft
Service charges	AED 20-100/sq ft/year

Free Zone vs Mainland Commercial Space

If your business is in a free zone, your office must typically be within that free zone. Free zones assign units and workspaces as part of the licence package. Renting external commercial space while on a free zone licence is usually not permitted unless your free zone allows dual establishment.

Mainland companies can rent anywhere within the UAE, subject to the activity restrictions on their licence.

For a full comparison, see Mainland vs Free Zone in the UAE.

Abu Dhabi vs Dubai: Key Differences

Factor	Dubai	Abu Dhabi
Registration system	Ejari	Tawtheeq
Rent index	RERA calculator	DMT guidance
Rent increase rules	Fixed caps (RERA)	Less standardised
Market feel	More competitive, faster	More institutional

Sharjah, Ajman, RAK, and Fujairah each have their own municipal systems but generally follow looser frameworks. Rents are considerably lower than Dubai - a comparable office in Sharjah might cost 40-50% less - but accessibility and amenity levels differ.

Before You Sign

A few practical points:

Get everything in writing. Verbal agreements on rent-free periods, fit-out contributions, or renewal terms are worth nothing.
Verify the landlord’s title deed. Confirm they have the right to lease the space. Ask for a copy before signing.
Check the unit’s Ejari history. Previous disputes can complicate your registration.
Use a registered real estate broker. The fee (typically 5% of annual rent) is worth it on larger units - a broker can negotiate better terms and flag red flags in the contract.
Budget for fit-out time. If you need a fitted space but are taking on shell and core, factor in 4-12 weeks for fit-out before you can operate.

Useful Links

RERA Rental Increase Calculator - check the maximum permitted rent increase before renewal
Ejari registration - online registration for Dubai tenants
UAE Virtual Office Guide - if you need a registered address without full office space
How to Register a Company in the UAE - business setup first steps
Mainland vs Free Zone: Which Is Right for You? - choosing the right business structure before picking a location