Freezone business setup in UAE
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Looking at 2024–2025, free zone business setup in the UAE offers fast market entry—often in 4 days—with Meydan’s Fawri issuing a fully digital LLC licence in about 60 minutes. You get 100% foreign ownership, 0% corporate tax on qualifying income for Qualifying Free Zone Persons, no personal income tax on salaries, duty-free imports and re-exports beyond the GCC, and full repatriation of profits and capital—making it attractive for holding and trading structures. Choose the right legal form (FZ LLC, FZE, or branch), align your activity and premises to zone rules, and confirm any special approvals up front. Costs depend on activity, visa quotas, and capital: DMCC typically AED 50,000 (AED 1,000,000 for General Trading), KIZAD and Hamriya AED 150,000, DAFZ AED 1,000, while twofour54 has no minimum—so the “cheapest” option varies by plan. We’ll walk through the process, requirements, banking and visas, and the free zone vs mainland trade-offs, then match you to the right location—Dubai (DMCC, DAFZ, Meydan), Abu Dhabi (twofour54, KIZAD), Sharjah (SPC, SAIF, Hamriya), Ajman, or Umm Al Quwain. Expect practical tools like name checks and cost calculators, plus bank introductions (some zones now guarantee an IBAN) within a digital, compliance-led pathway.
What a free zone company really is in the UAE
“Free zone” is the UAE’s way of saying: set up fast, keep control, and plug into global trade from a well‑regulated hub. Each free zone is a ring‑fenced jurisdiction with its own authority, licences, and infrastructure. You form a company under that authority, not under a federal commercial registry, and you get to operate with 100% foreign ownership from day one.
You’ll typically pick one of three legal forms. A Free Zone Establishment (FZE) if you’re a single shareholder. A Free Zone LLC or Free Zone Company (FZ‑LLC / FZ Co.) if you have multiple shareholders. Or a branch of an existing local or foreign company. The split seems technical, but it touches your share capital, governance, and—importantly—banking and audit expectations.
Free zone vs mainland: practical differences in 2024–2025
Mainland companies register with a Department of Economy (e.g., Dubai DED) and can trade freely across the UAE retail market. Free zone companies primarily operate within their zone and internationally. They can sell to the mainland, but the route depends on your activity: for goods, you use a distributor or clear customs; for services, you contract B2B with onshore clients in most cases. If you need a storefront, regulated profession, or mass hiring, mainland often wins.
On speed and cost, free zones shine. The playbook is digital, visa quotas are predictable, and “flexi‑desk” offices keep overhead low. You also access special tax benefits if you qualify under the federal corporate tax regime. If your business is online, export‑led, or B2B services, a free zone setup in the UAE is often the sharper tool.
How to set up a freezone company, step by step
Determine the legal entity (FZE vs FZ‑LLC vs branch)
Choose a trade name.
Pick the licence (commercial, service, industrial, or a blended licence).
Secure your office solution (flexi‑desk, co‑work, or warehouse).
Get pre‑approvals, sign incorporation documents, pay fees, and collect the licence.
Costs today: cheapest paths and what drives your budget
Let’s talk cost without the fluff. Your budget has four levers: the licence, the office, visas, and compliance. Licence‑only packages in 2024–2025 can start in the AED 6,000–15,000 range in value‑zones (Umm Al Quwain FTZ, SPC Free Zone, IFZA, sometimes Ajman). A one‑visa package tends to land around AED 10,000–25,000 depending on activity and medical insurance. Premium hubs (DMCC, DAFZ) are pricier but buy you reputation, addressable ecosystem, and often smoother banking.
“Cheapest” depends on your use case. Trading? Factor warehouse and customs. Consulting? Flexi‑desk plus one visa can be razor‑lean. Publishing? SPC Free Zone in Sharjah is often aggressively priced and positions itself as a leader in fast company formation. Want an instant licence? In Dubai, Meydan’s digital “Fawri” 60‑minute licence is real, and their cost calculator helps model fees before you commit.
Hidden costs nobody tells you about
- Bank balance requirements. Many UAE banks want AED 25,000–100,000 average balance for SMEs. Miss it and you pay monthly fees.
- Establishment card, immigration file, and e‑channel equivalents. Modest fees, but they add up.
- Attestation and translation. If a corporate shareholder is involved, budget for notarisation/legalisation of documents.
- Payroll compliance. If you hire, you’ll likely use WPS. There are setup and monthly costs.
- Audit and accounting. Some zones mandate audits; all QFZPs under corporate tax will. Budget for bookkeeping from month one.
Picking the right location: Dubai, Abu Dhabi, Sharjah, Ajman, Umm Al Quwain
Dubai is the headline act. DMCC is the poster child for global rankings, superb for commodities, crypto‑native web3 services (subject to approvals), and sophisticated trading. IFZA and Meydan Free Zone are strong for SME services, marketing, and IT, with streamlined processes and partner bank networks. DAFZ works well for aviation‑adjacent and high‑value import/export near DXB. Dubai Internet City and allied zones suit tech scale‑ups that want a campus vibe.
Abu Dhabi brings sector depth. twofour54 is ideal for media, gaming, and production with flexible rules on content businesses. Masdar City Free Zone suits clean‑tech and R&D. KEZAD powers manufacturing and logistics with industrial plots and proximity to Khalifa Port. If you need a financial services platform, ADGM is a separate common‑law financial free zone with its own regulator and playbook—great, but a different beast.
Sharjah’s portfolio is underrated and efficient. Hamriyah Free Zone and SAIF Zone are logistics‑friendly with competitive warehousing. Sharjah Publishing City Free Zone (SPC Free Zone) has become a leader for service, e‑commerce, and publishing licences, offering fast, budget‑friendly packages and practical visa options.
Ajman Free Zone focuses on cost‑effective trading and light manufacturing with direct access to Ajman Port. It’s popular with startups that need a physical unit without Dubai rents. Their business partners’ testimonials often highlight ease of import/export and customer support—points that matter when you’re scaling.
Umm Al Quwain Free Trade Zone (UAQ FTZ) is a classic choice for lean setups. It often sits at the “cheapest viable” end of the market for licence‑only or one‑visa packages. It’s straightforward, fast, and bankable when your KYC story is clean. If cost is decisive and your business is simple, UAQ FTZ is hard to ignore.
The corporate tax angle: how free zones keep 0% alive
The UAE corporate tax regime introduced a 9% rate, but kept a path to 0% for a Qualifying Free Zone Person (QFZP) on Qualifying Income. It’s not automatic. You need adequate substance in the zone, audited financials, and to earn income from qualifying activities (think manufacturing, logistics, distribution of goods from or within a Designated Zone, certain services to foreign persons, and inter‑group treasury or HQ services under transfer pricing rules). Non‑qualifying income is taxed at 9%, with a narrow de‑minimis.
If you fail the conditions or blow the de‑minimis, you can lose QFZP status for that period and, under current guidance, for up to four subsequent tax periods. That is an expensive mistake. Treat this as a strategy—map transactions, customers, and functions before you choose your zone and licence. Your filing cycle starts in 2025 for many 2024 financial years; lock in bookkeeping quality and TP documentation now.
Holding companies and IP boxes in free zones
Free zone holding companies are popular for owning operating subsidiaries, IP, and cash. Benefits include 100% profit repatriation, 0% withholding tax on outbound dividends and interest, and a maturing banking ecosystem. The UAE’s treaty network can be accessible, but counterparties increasingly test substance. Board meetings in the UAE, local directors with decision‑making authority, and real expenditure in the zone help pass that sniff test. For IP, watch transfer pricing—arm’s length royalties and DEMPE analysis matter.
Visas, banking, and day‑one operations
Your visa quota depends on your office and zone policy. A flexi‑desk often supports one to three visas; private office or warehouse multiplies that. The immigration “establishment card” ties your licence to the visa system. Medicals and Emirates ID biometrics require you to be physically present; remote company formation is fine, but visas are not fully remote.
Banking is where many founders stall. Prepare a KYC dossier: licence, MoA, UBO chart, business plan, sample contracts, invoices, and proof of address. Zones with bank partnerships help—Meydan Free Zone, for instance, advertises guaranteed IBAN introductions across local and international banks. Expect minimum balance requirements and a 2–4 week onboarding timeline for a clean services company; trading and crypto‑adjacent activities take longer.
Compliance in 2024–2025: ESR, UBO, AML, accounting
Free zone or not, the UAE expects grown‑up compliance. Register UBOs, keep your ESR notifications and (if in scope) file ESR reports. If you’re a DNFBP—real estate brokerage, corporate services, precious metals and stones dealer—register on goAML and implement AML policies. VAT registration kicks in at AED 375,000 of taxable supplies; many B2B exporters register voluntarily to reclaim input VAT. Most serious zones now require annual audited financials; if you want QFZP 0%, audit is mandatory.
Accounting is not a box‑tick. Corporate tax aligns you with IFRS‑lite realities. Get your chart of accounts right, capture intercompany charges at arm’s length, and document transfer pricing. The FTA’s EmaraTax portal is now routine; set up your tax profile before deadlines creep up.
When not to choose a free zone
If you practice a regulated profession that needs a local regulator (medicine, legal, some engineering), a mainland licence may be cleaner. If you plan a retail presence, heavy warehousing, or need a very large visa pool fast, the economics of mainland or an industrial zone with onshore reach can beat free zones. If a specific UAE government buyer demands a mainland entity, don’t swim upstream—structure a holding in a free zone and a wholly owned mainland subsidiary under it.
How consultants actually save you money (and when to DIY)
You can DIY a simple licence in zones like UAQ FTZ or SPC Free Zone. But once you add cross‑border shareholding, sector approvals, transfer pricing, or a corporate tax plan, a specialist pays for themselves. A good team will optimise your activity mix, map QFZP eligibility, and steer banking. Names to look for in the market include big multi‑office firms and boutique outfits; for example, HLB HAMT is often cited among UAE consultants for tax and compliance depth. If you’re Abu Dhabi‑bound for media, work with an Abu Dhabi specialist who lives and breathes twofour54 and KEZAD processes; if you’re leaning Ajman, local consultants know the quickest counters and the latest fee waivers.
Expect a clear scope: entity formation, bank introductions, VAT and corporate tax registration, ESR/UBO filings, and year‑one bookkeeping. Ask for a timeline and a fixed fee where possible. The delta between an okay setup and a great one shows up months later—when the bank asks for proof of substance, or when your first tax return is due.
Real-world process notes and small print most people miss
Authorities are independent. What flies at IFZA may not fly at DMCC, and vice versa. If your business is time‑sensitive, verify “today’s” requirements on the zone’s portal. For instance, some zones offer 60‑minute digital licences, but visas and bank accounts still follow normal due diligence. A “free zone company formation cost” you see in an ad rarely includes establishment cards, medicals, or corporate tax advisory; price the whole journey.
Trade name rules matter. DMCC maintains a list of restricted terms; twofour54 bars “Abu Dhabi/UAE” in entity names. If you plan to market across the GCC, test your brand for conflicts early. For general trading, capital and warehouse availability affect speed; in Dubai, DAFZ and JAFZA shine for air and sea connectivity, while Hamriyah and SAIF offer competitive alternatives in Sharjah.
Finally, keep an eye on news and circulars from your authority and the FTA. Policies—visa quotas, audited accounts, bank onboarding guidelines—evolve quickly. The leaders in each [business, zone] ecosystem communicate updates on their websites and through partner newsletters. Costs move with promotions and regulatory tweaks. If you’re planning a UAE free zone company in 2024 or 2025, budget a buffer, build in compliance from day one, and choose a jurisdiction that will grow with you, not against you.
| Topic | What you need to know | How to do it | Costs and timing | Best fit zones and locations (examples 2024–2025) |
|---|---|---|---|---|
| Free zone company setup in the UAE | Free zone authorities streamline business setup. You can own 100%, repatriate profits, and enjoy duty exemptions. Qualifying Free Zone Persons may get 0% corporate tax on qualifying income. | 1) Determine the legal entity (FZ-LLC/FZE/branch). 2) Choose a trade name. 3) Select activities and license type. 4) Pick an office (desk/office/warehouse). 5) Apply for pre-approvals. 6) Sign lease. 7) Register and receive license. | Fast-track options exist; many setups complete in days. Processing can extend due to due diligence (KYC/AML). Packages vary by activity and visa count. | Dubai: DMCC, DAFZA, Meydan, IFZA, DIC. Abu Dhabi: twofour54, KEZAD (KIZAD), Masdar City. Sharjah: SAIF Zone, SPC Free Zone (Sharjah Publishing City), USA RTC. Ajman: AFZ. UAQ: Umm Al Quwain FTZ. Ras Al Khaimah: RAKEZ. Fujairah: FFZ. |
| Legal entity types (FZ LLC vs FZE vs branch) | FZ LLC/FZ Co. (multi-shareholder), FZE (single shareholder), or a branch of a local/foreign company. Not every free zone offers all forms. | Check the free zone’s rulebook for allowed forms. Decide based on shareholders, liability, and banking needs. | No federal minimum capital; free zone rules apply (see capital row). Branches usually have no share capital. | All UAE free zones; verify availability per authority. |
| Capital requirements by free zone | Minimum share capital varies by zone and license. Examples: • twofour54 Abu Dhabi: no minimum • KEZAD/KIZAD LLC: AED 150,000 • DAFZA FZ Co.: AED 1,000 (each share AED 1,000) • DMCC: AED 50,000 per company and AED 10,000 per shareholder (General Trading: AED 1,000,000) • Hamriyah FZE: AED 150,000 | Confirm capital before name reservation and banking. For higher-capital activities (e.g., general trading), prepare proof of funds. | Bank may ask for capital evidence before IBAN activation. Timing unaffected if capital is paid-up on paper where allowed. | Abu Dhabi: twofour54, KEZAD. Dubai: DAFZA, DMCC. Sharjah: Hamriyah Free Zone. |
| Trade name rules | Name must match activity and legal form (e.g., LLC, FZE, DMCC), avoid prohibited terms, and be unique. twofour54 disallows “Abu Dhabi” or “United Arab Emirates” in FZ-LLC or branch names. DMCC maintains restricted name lists. | Shortlist 3–5 names. Run a free zone/DED name check. Ensure compliance with public order/morals and avoid religious/governmental words or third-party logos. | Name reservation is usually same-day to 2 days. Small charge applies. | Name check tools: Meydan’s “Name Check.” DMCC publishes restricted names guidance. |
| License types (what you can do) | Common categories: service/consulting, commercial/trading, industrial/manufacturing, e-commerce, media/creative, tech. General Trading may need higher capital (e.g., DMCC AED 1m). | Map your activities to the free zone’s activity list. Some zones offer 1,800–2,500+ activities. Add secondary activities if needed. | Base license fee varies by zone and activity; special/regulated activities cost more and take longer. | Meydan (broad service/commercial), DMCC (trading/commodities), DAFZA (aviation/logistics), SPC Free Zone (publishing/media), SAIF (logistics/industrial). |
| Office and facilities | Options range from flexi-desk/virtual office to fitted offices and warehouses/land. Some activities require physical space. | Choose minimum space that meets licensing and visa quotas. Sign a lease with the free zone. | Flexi-desk is cheapest; warehouses and labs increase cost and fit-out time. | KEZAD (industrial/logistics), RAKEZ (manufacturing/warehousing), SAIF/Hamriyah (industrial), Meydan/IFZA (flexible offices). |
| Visas and quotas | Visa eligibility ties to license and office size. Establishment Card is needed to sponsor visas. | After license: apply for Establishment Card, e-channel, and visas (entry permit, status change, medical, Emirates ID). | Zero-visa to multi-visa packages exist; each visa adds cost and 2–3 weeks processing on average. Presence in UAE is required during visa processing. | All free zones; high-visa needs may favor mainland or larger offices. |
| Banking and IBAN | Banks require UBO/KYC, business plan, and proof of address. Some free zones offer introductions. Meydan partners with 26+ banks and advertises a guaranteed IBAN through its program. | Prepare KYC pack: license, MoA/AoA, lease, passports/visas, UBO chart, invoices/contracts. Attend bank interview. | Account opening ranges from days to weeks depending on risk profile and nationality. | Dubai-wide banking; free zone introductions (e.g., Meydan’s “Guaranteed Bank Account”) can speed up. |
| Corporate tax and compliance (2024–2025) | UAE corporate tax applies. Qualifying Free Zone Persons may enjoy 0% on qualifying income if they meet conditions (substance, audited accounts, transactions, etc.). Non-qualifying income is taxed at standard rates. No personal income tax. Customs duty exemptions in FTZs; re-exports outside GCC are duty-free. | Classify transactions (qualifying vs non-qualifying). Maintain substance in the free zone. File corporate tax returns. Keep audited financials where required. | Budget for annual audit, corporate tax filing, and advisory. VAT applies if turnover exceeds threshold; ESR and UBO filings may apply. | All free zones; check each authority’s audit and substance rules. |
| Benefits of free zones | • 100% foreign ownership • 0% corporate tax on qualifying income (if conditions met) • No personal income tax • Import/export duty relief • Full repatriation • Fast company formation • Independent regulations • Strong infrastructure • Strategic location between Europe–Asia–Africa | Leverage free zone networks, accelerators, and one-stop shops. | Faster and often cheaper than many onshore alternatives for international trade and services. | DMCC (global awards), Meydan (100% digital), Masdar (cleantech), twofour54 (media), SPC Free Zone (publishing). |
| Free zone vs mainland (vs mainland) | Free zones excel for international trade, export, and B2B services. Mainland is better for heavy staffing, regulated professions, wide retail access, and long-term onshore presence. Some free zone licenses allow contracting with mainland firms; direct retail may need a mainland branch or distributor. | If your model is UAE onshore retail or large visa headcount, consider mainland. If cross-border trade or holding company, consider free zone. | Free zone setup is often quicker; mainland can need additional approvals and premises. | Consider hybrid: free zone HQ plus mainland branch for onshore sales. |
| When not to choose a free zone | Less ideal if you: practice a regulated profession, need many visas or large warehouses/offices, want broad UAE consumer market reach, or must partner with a specific UAE entity. | Map regulatory approvals early. If most revenue is onshore, model costs for a mainland structure. | Onshore approvals and premises add time and cost but improve market reach. | Mainland via DED (Dubai), ADDED (Abu Dhabi), etc. |
| Holding companies (benefits of holding) | Free zone holding vehicles are simple, cost-effective, and good for IP, shares, and intercompany financing. They benefit from ownership flexibility and potential 0% on qualifying income if conditions are met. | Choose a zone that supports holding activities. Keep clear intercompany agreements and substance (directors, records, office). | Low OPEX with flexi-desk options; audit may be required. | DMCC, RAKEZ, Meydan, SPC Free Zone for media/IP holding. |
| Cheapest routes and cost drivers (cost, cheapest, costs today) | Cost depends on: number of activities, visa quota, office type, special approvals, audit needs. Zero-visa “smart desk” packages are usually cheapest. Prices vary by nationality and activity. | Use zone calculators and ask for 0-visa vs 1-visa quotes. Trim activities to essentials. | License issue can be same-day to a week. Visa adds 2–3 weeks. Bank KYC can take longer. | Meydan (cost calculator), IFZA/UAQ FTZ/AFZ often market budget packages for standard activities. |
| Digital-first setup (Meydan Free Zone) | Meydan markets itself as the only 100% digital Dubai free zone with a 60-minute LLC license (“Fawri”). Offers name check, cost calculator, and a 360° portal. Claims “work officially on mainland” via permitted contracting, and bank account support. | Apply online, pick activities (broad catalog), pay digitally, receive e-docs. Start visa/bank processes same day. | 60-minute license issuance for eligible cases; overall timing depends on KYC and due diligence. | Meydan Free Zone, Dubai. |
| Abu Dhabi options (the Abu Dhabi) | twofour54 (media, no min capital), KEZAD/KIZAD (industrial/logistics, AED 150k capital for LLC), Masdar City (cleantech/tech with one-stop shop). | Choose based on sector: media vs industrial vs sustainability tech. | Timelines are competitive; industrial fit-outs take longer. | Abu Dhabi: twofour54, KEZAD, Masdar City. |
| Dubai options | DMCC (named best free zone by FDI Intelligence; commodities/trading; higher capital for General Trading), DAFZA (airport/logistics; AED 1,000 capital for FZ Co.), DIC (tech), IFZA (flexible services), Meydan (digital setup). | Align zone with activity and banking profile. | Trading-heavy licenses may be pricier and require audits. | DMCC, DAFZA, DIC, IFZA, Meydan. |
| Sharjah options (SPC Sharjah, leaders, spc) | SAIF Zone (logistics/industrial), Hamriyah (industrial; FZE AED 150k capital), SPC Free Zone (Sharjah Publishing City) for media/publishing services—positioned as leaders in content sectors. | Media or publishing? SPC Free Zone is a focused choice. | Competitive license fees; check audit policy. | SAIF Zone, Hamriyah Free Zone, SPC Free Zone. |
| Ajman and Umm Al Quwain | Ajman Free Zone (AFZ) promotes ease for F&B, IT, textiles, education; strong support and evolving services. UAQ FTZ is known for budget-friendly service and trading activities. | Good for startups needing simple services and low overhead. | Often among the lowest-entry packages; verify activity availability. | Ajman Free Zone; Umm Al Quwain Free Trade Zone. |
| Ras Al Khaimah and Fujairah | RAKEZ (manufacturing, warehouses, flexible offices), Fujairah Free Zone (maritime/logistics); Fujairah Municipality guides key steps for business. | Consider for industrial and port access needs. | Warehouse and land leases drive cost and timelines. | RAKEZ, Fujairah Free Zone. |
| Documents and requirements (requirements, documents required) | Typical set: passport and photo for all shareholders/manager, UAE entry stamp/visa copy, proof of address, business plan (some zones), name options, UBO chart, MoA/AoA drafts, lease/Ejari (post-approval). Establishment Card for visas. | Prepare KYC pack early. Use zone checklists to avoid rework. | Clean documentation shortens timelines significantly. | All zones; consult authority-specific checklists. |
| Step-by-step process (how to set up a company) | The path is standardized across zones with minor variations. Free zones may ask a requirements questionnaire, then issue provisional approval and a lease prior to final license. | 1) Submit application and activity list 2) Name reservation 3) Initial approval 4) Sign lease 5) Pay fees 6) Incorporation (MoA/AoA) 7) License issuance 8) Establishment Card/visas 9) Bank account. | Often 2–7 business days to license if straightforward; longer if special activities or environmental approvals are involved. | All UAE free zones; one-stop shops speed things up. |
| Working with consultants (consultants, specialist – HLB HAMT, ajman consultants) | Advisors simplify activity mapping, tax planning, ESR/CIT/VAT compliance, and banking introductions. Specialists like HLB HAMT support multi-jurisdiction setups and audits. Local AFZ/UAQ/Sharjah consultants help with fast-track filings. | Engage a licensed corporate services provider. Clarify scope (license, visas, tax, accounting). | Fees depend on scope; ask for fixed-fee proposals and timelines. | Reputable firms across Dubai/Abu Dhabi/Sharjah/Ajman. |
| 2024–2025 updates and news (news, today, 2025) | • Corporate tax regime in force; qualifying free zone rules apply • Banks tightened KYC/AML for SMEs • Digital portals expanded (e-licensing, e-payments) • Continued ESR and UBO enforcement • Some zones offer instant licenses and remote incorporation, but visa applicants must be physically present in UAE. | Check each zone’s latest circulars before applying. Confirm whether your income qualifies for 0% and ensure substance. | Factor annual audit and tax filing into budgets starting year one. | Zone authority portals (e.g., DMCC, Meydan, KEZAD, SPC Free Zone) post regular updates. |
| Mainland access (work with mainland) | Free zone companies can contract with mainland entities; for direct onshore retail/trading you may need a mainland branch, commercial agent, or permits. Meydan advertises the ability to work officially with mainland companies under its framework. | Define your onshore touchpoints and choose the right mechanism (branch/distributor/direct supply with approvals). | Additional permits and PRO costs may apply. | Dubai mainland (DED), Abu Dhabi mainland (ADDED) in combination with free zone HQs. |
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