Set up a free zone company in Dubai: free zone business setup explained

A free zone company is a business registered in one of the UAE's free zones, special economic areas with their own authority, rules and licensing. Each free zone authority issues licences, registers companies and supports visa applications for businesses within its area.

There are many free zones across the UAE, and several in Dubai, often focused on particular sectors such as technology, media, trade, logistics, finance or commodities. Choosing the one that matches your activity is one of the first and most important decisions.

Free zones are popular because they typically allow full foreign ownership, offer a relatively streamlined setup process and provide flexible office options, from flexi-desks to warehouses. Many entrepreneurs and international companies use them as their first base in the UAE.

From a tax perspective, the UAE federal corporate tax introduced in 2023 applies to free zone companies, but qualifying income of a qualifying free zone person may benefit from a 0% rate, while other income is generally taxed at the standard 9% above a threshold. Whether your income qualifies depends on your activities and substance, so it should be reviewed with an adviser.

The main limit is that a free zone company typically operates within its free zone and internationally, rather than trading directly with customers across the UAE mainland. Selling goods or services to the local market may require a distributor, an additional licence or a mainland presence.

Visa numbers are often linked to the office space or package you choose, and some activities are only available in specific free zones. These points are worth checking before you commit.

Choose a free zone if your customers are mainly abroad or other businesses, if you value a simpler setup, or if your activity fits a specific zone. Choose the mainland, licensed in Dubai by the Department of Economy and Tourism, if you want to trade directly with customers across the UAE.

Some businesses start in a free zone and add a mainland presence later as they grow. The best choice depends on your activity, your clients, your visa needs and your plans for the next few years.

Setting up a free zone company typically follows a clear sequence: choose the free zone and activities, reserve a company name, submit the application with owner documents, sign the company documents and receive the licence. Visas, Emirates IDs and a corporate bank account follow.

Requirements and timelines vary between free zones and depend on your activity and ownership structure. To see a likely budget for your case you can use the cost calculator, or book a free expert consultation to compare free zones before you apply.