Business Setup in Dubai Free Zones

What are Freezones in Dubai?

Free Zones in Dubai, also known as Free Trade Zones, are special economic areas where businesses enjoy significant benefits. They highly attract investors and entrepreneurs by offering full foreign ownership, zero corporate tax, simplified company setup, and industry-specific facilities, promoting economic growth and innovation.

For business setup in Dubai free zones, companies require a suitable licence that depends on their business operation. Furthermore, each free zone is governed by its own authority and is usually designed for a particular sector, such as:

• Trading and logistics
• Technology
• Media
• Finance
• Healthcare
• E-commerce
• Manufacturing
• Education, and more

Advantages of Setting Up a Freezone Company Dubai

Here are the top benefits of starting a free zone business in Dubai:

• 100% Foreign Ownership- You can set up a business without a local partner or sponsor, giving you more freedom and control over the business.
• 0% Corporate Tax- Free zones offer exemption from corporate tax.
• Full Profit Repatriation- Send all your earnings back home with no restrictions.
• Strategic Location- Freezones are close to airports, seaports, and logistics hubs that boost your global reach.
• Quick and Hassle- Free Business Setup- Without any complications, you can set up a business in 2–5 days.
• Industry-Focused Ecosystems- Specialised infrastructure and facilities for different industries, like media clusters, IT parks, logistics, finance, gold and jewellery zones, etc.
• No Import or Export Duties- Get custom advantages with no import and export duties within Dubai free zones.
• Networking and Business Growth- Gives you the opportunity to connect with MNCs and global brands, helping you thrive in the business.

Types of Trade License to Set Up a Freezone Company Dubai

Free zones offer multiple license categories, depending on your business activity, and some of them are as follows:

Commercial Licence

A commercial licence is essential to set up a company in Dubai free zone. It allows companies to buy, sell, import, export, and distribute goods legally. It’s ideal for trading businesses dealing in sectors like electronics, textiles, machinery, or consumer products.

Professional Service Licence

If you’re offering expertise, like consultancy, IT solutions, HR support, education, or marketing, this license is required. It enables you to run service-based activities in Dubai free zones, giving you full ownership and the flexibility to work with UAE and international clients.

Industrial Licence

An industrial licence in Dubai free zones authorises manufacturing, processing, assembling, and packaging activities. Companies operating warehouses or production facilities rely on this licence to legally set up industrial operations. It ensures compliance with UAE environmental, safety, and operational standards for industrial businesses.

E-Commerce Licence

Ideal for online entrepreneurs, the E-commerce licence allows businesses to sell products or services through digital channels. Whether running an online store, dropshipping brand, or marketplace platform, this licence enables regulated online trading across the UAE while benefiting from free-zone incentives.

General Trading Licence

This trade licence allows companies to trade a broad mix of products under one permit. It’s ideal for businesses involved in import, export, and multi-category trading, offering flexibility and simplified operations when setting up in a freezone company in Dubai.

Manufacturing Licence

A manufacturing licence is perfect if you create or produce anything from packaged goods to custom-made items. It lets you legally run your production unit inside a free zone while enjoying modern facilities, low setup costs, and a business-friendly environment.

List of Dubai Free Zones for Business Setup

Dubai is home to 30+ free zones, covering all major industries, including healthcare, finance, manufacturing, trading, tech, and more. Some of the most free zones include:

• Dubai Airport Free Zone (DAFZA)
• Dubai Internet City (DIC)
• Jebel Ali Free Zone Authority (JAFZA)
• Dubai Silicon Oasis (DSO)
• Dubai Media City (DMC)
• Dubai Knowledge Park (DKP)
• Dubai Design District (D3)
• Dubai South Free Zone
• Dubai International Financial Centre (DIFC)
• Dubai Industrial City
• National Industries Park
• Meydan Free Zone
• IFZA Dubai

How to Open Free Zone Company in Dubai?

The process of Dubai free zone business setup is easy by following the steps mentioned below:

Choose Your Business Activities

Begin by identifying what your company will do. Dubai free zones allow thousands of business activities, from consulting and tech services to trading and e-commerce. So, choose an industry wisely where you can thrive.

💡Your selected business activities define the license you require and help you identify the most suitable free zone for your company.

Select the Right Free Zone

Dubai has numerous free zones tailored to different industries and business requirements. Consider your sector, budget, and facility needs to finalise the right business setup in Dubai free zones.

Decide Your Legal Structure

Once your free zone is decided, choose the legal form that matches your business form. You can choose an FZE, FZCO, branch office, or representative office depending on what best supports your plans.

Select and Register Your Trade Name

Choose and register a unique trade name that follows UAE naming rules, reflects your business activities, and truly represents your brand identity, then submit it to the free zone authority for approval.

Submit Initial Approval Documents

Submit your passport copies, proposed business activities, and basic company details to the free zone authority. This step helps them verify your eligibility and confirm that your planned activities align with their regulations before moving forward.

Lease or Rent an Office Space

Choose the right office for your business, whether it’s an affordable flexi-desk, a shared space for teamwork, or a full office for your team.

Receive the Business Licence

After your documents and office selection are approved, the free zone issues your business license, officially allowing you to operate. This licence outlines your permitted activities and acts as the core legal document for your company.

Open a Corporate Bank Account and Apply for Visas

With your licence in hand, you can open a corporate bank account by submitting documents like your Emirates ID and business plan. You can also apply for visas based on your office size and the free zone’s quota rules.

Cost of Business Setup in Dubai Free Zones

Setting up a freezone company Dubai is a smart move for entrepreneurs, but it’s important to understand the costs involved. The overall expense depends on various factors, including the type of license, office requirements, and the free zone you choose.

On average, the estimated costs include:

• Business License: Starting from AED 10,000
• Office Space: Flexi-desk options from AED 5,000 per year
• Additional Costs: Visa fees, registration charges, and other administrative expenses (vary by free zone)

✍️ The costs above are estimates and may vary between free zones, so planning ahead will help ensure a smooth business setup and maximise the benefits of business setup in Dubai free zone.

Documents Required for Freezone Business Setup in Dubai

Typically, you require the following documents while setting up a freezone company in Dubai:

• Shareholders passport copies
• A passport-sized photograph
• List of trade names
• Business activity description
• Entry stamp or visa copy
• Address proof of the shareholder
• MOA and AOA
• Business registration certificate
• Tenancy contract

✍️ You may require some additional documents, depending on your business type and freezone.

Business Setup in Free Zone vs Mainland and Offshore

Here’s a quick comparison to help you choose better to start a company in the UAE:

What are the Available Business Structures in the UAE Free Zones?

Below are the most common business structures you can set up in the UAE free zones:

• Free Zone Establishment (FZE)- A legal company structure that allows only one shareholder, whether an individual or another company.
• Free Zone Company (FZCO / FZC)- A registered company with a minimum of two shareholders, whether individuals or corporate entities.
• Limited Liability Company (LLC)- A limited liability entity with a shareholder range of two to fifty, not authorised for public share offerings.
• Public Limited Company (PLC / PJSC)- An entity with multiple shareholders, allowed to offer shares to the public and list on a stock exchange (available in select free zones).
• Branch of a Local or International Company- A free zone branch office of an existing local or international company, fully dependent on its parent for legal authority.

How to Choose the Right Free Zone for Business Setup in Dubai?

Choosing the best Dubai free zone for your business requires evaluating several strategic factors. The right choice impacts licensing, costs, expansion, and long-term operational success.

Here are the key points to compare before setting up your free zone company in Dubai:

Choose a Free Zone Based on Your Business Activity

Selecting a free zone aligned with your specific business activity ensures you obtain the correct license type, avoid operational restrictions, and start your business without compliance hurdles.

Compare Setup and Renewal Costs

Comparing incorporation fees, license costs, and renewal charges helps you plan your budget accurately. It’s also important to choose a free zone that provides long-term value and financial predictability.

Review Visa Eligibility

Visa limits differ across free zones, so finalising one that supports your staffing plans ensures you can hire, expand your team, and sponsor dependents without restrictions.

Check License Flexibility

Free zones with flexible licensing let you combine multiple activities under one license. It helps you save costs and diversify your operations easily as your business evolves.

Assess Regulatory Requirements

Understanding audit rules, reporting obligations, and compliance expectations helps you avoid penalties and ensures your business stays compliant with the free zone’s legal framework.

Check Special Incentives

Free zone incentives– such as tax relief, cost-effective business packages, and streamlined customs benefits– can reduce operational expenses and boost your competitiveness right from the beginning.

Frequently Asked Questions