What Is a Free Zone Company in UAE?

Free Zone company in the UAE is a business established in a special economic area, known as a "Free Zone," where companies operate with certain tax, customs, and import benefits. Primarily aimed at foreign investors, these zones offer a more flexible environment for business setup in Dubai Free Zone. Establishing a Freezone company in Dubai means entrepreneurs can enjoy full ownership and various incentives, making it a popular choice for international business activities.

What Is a Free Zone License in UAE?

A Free Zone License in the UAE is a special permit allowing businesses to operate within a Free Zone, a designated economic area with unique benefits. Primarily appealing to foreign investors, this license is a gateway to establishing a business in Dubai dynamic market.

Holding a Dubai Free Zone license means enjoying 100% ownership of your company, a privilege not commonly available outside these zones in the UAE. It also brings notable tax advantages, including exemptions from corporate and income taxes, enhancing profitability. The license simplifies the process of setting up a business, offering a more streamlined and efficient approach. Additionally, it provides customs duty benefits, aiding in cost-effective import and export activities. Essentially, a Dubai Free Zone license is a key to unlocking a world of business opportunities in one of the most vibrant economic hubs in the Middle East.

Types of Business Licenses in Dubai Free Zone

There are six different types of business licenses available in the UAE, as well as the requirements for getting them.

  • Commercial license – It is one of the most common types of business licenses. If your business deals with buying and selling goods, you should opt for this license. 
  • Industrial license – If you have a business that requires manufacturing, then this is the license you should opt for. 
  • Professional license – Companies providing professional services such as legal, accounting, etc require this license.
  • Consultancy license – Open a legal, business, financial or management consultancy with this license
  • Service License – This license allows you to provide repair, cleaning, technical or maintenance services.
  • General trading license– You can take part in a variety of trade operations and services.

Types of Freezone Business Activities in Dubai Free Zone

Free zones are the best locations for company setup since they provide a range of activities for your business needs.Some of the activities are:

  • E- Commerce
  • Import Export
  • Crypto, Blockchain, NFT
  • Trading
  • Services (Marketing, IT, Consultancy, Business Management)
  • Manufacturing
  • Logistics
  • Media and entertainment
  • Education

It’s important to keep in mind that each free zone may have different restrictions on the businesses activities that can operate there, and that companies must abide by such rules and laws in order to operate there.

How to Register a UAE Free Zone Company

Registering a UAE Free Zone company is a straightforward process. Here is a step-by-step guide:

  • Choose a Free Zone:: Select the Free Zone that aligns best with your business type and needs. Each Free Zone in the UAE caters to specific sectors.
  • Decide on Company Type:: Determine whether your business will be a Free Zone Establishment (FZE), Free Zone Company (FZC), or a branch of an existing company.
  • Select a Business Activity:: Identify your primary business activity or activities, as this will impact the type of license you require.
  • Choose a Trade Name: Decide on a trade name for your business and get it approved by the Free Zone authority.
  • Apply for a Business License: Submit an application for the appropriate business license, whether it is a commercial, service, or industrial.
  • Prepare the Documentation: Gather all necessary documents, including your business plan, passport copies, and NOC (if applicable).
  • Submit the Application: File your application along with the required documents to the Free Zone authority.
  • Pay the Fees:: Once approved, pay the registration, license, and any other relevant fees.
  • Lease Office Space: Choose and lease your office space, which is a requirement in most Free Zones.
  • Obtain Additional Approvals:: If needed, get approvals from external entities, depending on your business activity.
  • Finalize Your Setup:: Once all approvals are in place, you can finalize the setup of your UAE Free Zone company and start operations.
How Much Does It Cost to Open a Free Zone Company in Dubai?

Opening a company in a Dubai Free Zone varies in cost, depending on several factors. On average, the cost ranges from AED 15,000 to AED 50,000. This range includes several key expenses:

  • License Fees: The cost for obtaining a business license in a Dubai Free Zone is the primary expense. It varies based on the business activity and the specific Free Zone.
  • Registration Fees:This is a one-time fee paid during the initial setup of your company.
  • Office Space: The cost depends on whether you choose a flexi-desk option, a small office, or a larger space. Prices vary greatly between Free Zones.
  • Visa Costs: If you plan to reside in the UAE, visa fees for yourself and your employees will add to the overall cost.
  • Service Charges: These include fees for utilities, maintenance, and other services provided by the Free Zone.
  • Miscellaneous: Other expenses might include legal fees, insurance, and administrative costs.
Get Guidance with RadianBiz on Free Zone License

RadiantBiz is a trusted business setup consultants based in Dubai, UAE. We’ve been assisting people with Dubai free zone company setup for over 15 years and have made a name as a trustworthy source of guidance and assistance for anyone planning to start a business in the United Arab Emirates.

Some of the most skilled and knowledgeable individuals in the business setup industry make up the RadiantBiz team. We are experts in setting up all different types of businesses, including offshore companies, free zones, and mainland company registration. Given that the professionals in the RadiantBiz are fully aware of the legal and regulatory landscape in the UAE, they can offer personalised services to clients from various sectors of the industry.

We have established a strong reputation for providing clients from all around the world with outstanding outcomes. RadiantBiz takes great pride in being one of the most reliable and effective company formation agents in Dubai and offers amazing customer service. You can relax knowing you’re in excellent hands with RadiantBiz on your side.

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    What Are The Different Legal Entities in Dubai Free Zone?

    It is important to decide the legal structure of your business before you start the business setup in any of the Dubai free zones.

    Free Zone Company (FZ Co.)

    You can have several shareholders in your firm after setting up a FZCO (a maximum of 5 shareholders). The characteristics of a business with FZCO business entity are as follows:

    • It gives adaptable means of protection against debts and other personal responsibilities.
    • It also provides a number of other advantages, including the flexibility to conduct business in any of Dubai’s and the UAE’s free zones.
    • Furthermore, FZCO does not have any limits on the number of visas.

    Free Zone Establishment (FZE)

    The FZE is a free zone establishment, which indicates that your firm can have just one stakeholder. The characteristics of setting up a FZE business are as follows:

    • Restricted access for company operation in Dubai and the UAE.
    • There are limits on the number of visas that you can sponsor.
    • You are responsible for the gain or the loss that your company goes through.

    List of Top Freezones in UAE

    In Dubai, there are over 20 different types of free zones, all of which give investors trading, service, and industrial permits. One of the largest contributors to the GDP of the city of Dubai are the free zones. They provide significant business flexibility and a variety of trading options. The cost of a free zone company setup varies depending on numerous criteria, including the free zone chosen, the type of licence, and the unique needs of your firm.


    Dubai Multi Commodities Centre (DMCC):– Known for its world-class facilities, DMCC is ideal for businesses in commodities trading and related sectors.


    Jebel Ali Free Zone (JAFZA): Perfect for logistics and trade, JAFZA offers access to one of the world largest ports and a major trading hub.


    Dubai Internet City (DIC): Tailored for tech companies, DIC provides a thriving ecosystem for IT and telecommunications businesses.


    Dubai Media City (DMC):A hub for media and marketing agencies, offering state-of-the-art facilities for creative enterprises.


    Sharjah Airport International Free Zone (SAIF Zone):Offers versatile office and warehouse options, great for a wide range of businesses.


    Ras Al Khaimah Economic Zone (RAKEZ):Known for its cost-effectiveness, RAKEZ is suitable for SMEs and startups across various sectors.


    Abu Dhabi Global Market (ADGM): Focused on financial services, ADGM provides a robust legal framework and global business environment.


    Ajman Free Zone (AFZ):Offers competitive pricing and is ideal for small to medium-sized enterprises.


    Fujairah Creative City: Catering to media and creative industries, it is designed for freelancers and smaller creative businesses.


    Dubai South- Dubai South has Al Maktoum International Airport as the centre of the city. It has created new prospects for many industries to establish enterprises at low cost.

    Documents Required to Setup a Freezone Company in Dubai

    Gathering these documents is a crucial step in establishing a Freezone company in Dubai, ensuring a smooth and compliant setup process.

    Passport Copies:

    Provide clear copies of passports for all shareholders and the company manager.

    Residence Visa/UAE Entry Stamp:

    If applicable, include a copy of the residence visa or entry stamp to the UAE.

    Business Plan:

    Submit a comprehensive business plan, outlining the company objectives, strategies, and financial projections.

    Application Form:

    Complete the Free Zone company setup application form accurately.

    No Objection Certificate (NOC):

    If you’re a UAE resident employed elsewhere, an NOC from your current employer is required.

    Proof of Trade Name Reservation:

    Provide evidence of your trade name reservation with the Free Zone authority.

    Proof of Initial Approval:

    Include the document showing initial approval for your business activities from the Free Zone authority.

    Bank Reference Letter:

    For existing companies, a bank reference letter is often needed.

    Lease Agreement:

    A signed lease agreement for your office space within the Free Zone, if applicable.

    Benefits of Dubai Free Zone Company Formation

    Company formation in Dubai Free Zone offers immense benefits, including corporate tax exemptions. The corporate tax in the UAE free zone is set at 0% .

    • Tax Exemption – Dubai free zones also offer tax exemptions to certain categories of businesses based on their revenue, which means that investors are not required to pay any taxes on their below the specified amount of revenue. This enables businesses to save on costs and reinvest the funds into the growth and expansion of their business.
    • 100% Ownership for Expats- Expats can own and operate their businesses without needing a local partner. This allows them to retain full control over their business operations and make all the decisions without any external interference. This law has increased the ease of doing business in Dubai.
    •  No Need for a Physical Office – Free zone companies require no physical office space. This allows you to run the business virtually and from anywhere in the world. 
    • Multiple activities under one license- You can get your license issued and get the benefit of choosing from a range of activities under one license only. This can provide flexibility to the entrepreneurs.
    • Visa Validity- Dubai offers numerous benefits for investors and entrepreneurs who are looking for Free Zone company registration. Dubai also licenses a three-year visa validity for both employees and employers. The free zone visa process usually takes two to three weeks to complete.
    • No Limits on Money Transfers – There are also no limits on money transfers in Dubai free zones. This allows Free zone companies to conduct international transactions with ease. So, enjoy no limits on money transfers in free zones.
    • The Simple and Fast Process – Applying a Free zone license in Dubai is very simple. The time and effort required is significantly less compared to other regions. This attracts people from worldwide and retains talented individuals in the nation.
    • The company formation remotely – Company formation in Dubai can be done remotely and there is no need for physical presence in case of the same.

    What are the Laws & Regulations for the Dubai Free Zone Company Setup ?

    The UAE has many rules and regulations that a business has to comply with in order to get started with their business setup in one of the Dubai Free Zones.

    Employment Regulations

    Employers need to follow employment laws which may be set by the UAE government or those set by individual free zones.

    Corporate Regulations

    Register your company to get started with your business setup in one of the Free Zones. Get the permissions needed from the authorities.

    Financial Regulations

    Ensure that you are financially transparent and comply with the rules when it comes to your business’s operations.

    Frequently Asked Questions