How Much Money is Needed to Open a Company?

How Much Money is Needed to Open a Company?

Opening a new company is a stimulating thought-provoking endeavor and a profitable option. The total expenditure required for setting up an office is relatively low when compared with other countries in the region. However, when a decision is taken to open a new company, the expense of setting up the company is always an important criterion. In order to save money and secure long-term benefits, careful planning and consideration for all possible costs are mandatory. A brief discussion highlights some of the major expenses to be expected when setting up an office.

Pay Fee to the Government:

The cost of business setup in Dubai that has to be taken into account is the service charge of the local government. A business setup requires a valid license from the concerned ministry to start business operations and obtain an initial approval from the concerned department. This process can take anywhere from three to six months and a number of agencies are available for the purpose. Depending upon the urgency of the situation, the process can either be done immediately or can be postponed till a later date.

Cost of Purchasing Equipment and Furniture:

If the company is a small one then it can apply for a government business loan and make use of the funds to purchase its equipment and furniture. At the end of the year, when it is time to submit its financial accounts, all the payments made by the concerned company for its various purchases will have to be cleared by the concerned govt.

Payment of Service Tax:

Another business setup for Dubai freezone company setup cost includes the service tax. This tax is levied on all businesses conducting trade. It is computed by adding up the income earned by the company and the expenses incurred. The amount of tax paid by companies is dependent on their turnover and the nature of the business. Some of the important factors which determine the amount of tax that should be paid by a company include ownership of share capital, length of stay with the company, number of employees and the business activity in the last three years.

Cost Also Depends on the Type of Location Selection

The business setup cost for starting a new business can vary depending on the location of the business. For instance, if the business will be located in a region with a low start-up investment then the business setup cost will be less as compared to the business that will be located in an expensive region.