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June 18, 2019
A Dubai free zone, also known as a free trade zone, is a designated economic area within Dubai that operates under its own set of rules and regulations. These zones are specifically designed to attract foreign investment and boost economic activity by offering incentives such as tax exemptions, 100% foreign ownership, and streamlined business setup processes.
In 2025, Dubai has around 30 specialized free zones across the emirate, each catering to entrepreneurs in various sectors including technology, finance, media, healthcare, logistics, and manufacturing. The UAE as a whole hosts over 40 free zones distributed across all seven emirates.
Dubai has the highest number of free zones in the UAE, offering investors a whole host of benefits, including incentives regarding company costs and infrastructure.
Sources: Arabian Business – October 2025 |
One of the most compelling reasons entrepreneurs prefer free zones is the ability to own 100% of their business. Unlike mainland companies, which typically require a local partner or sponsor, free zones allow you to maintain full control of your company.
Businesses operating within free zones enjoy significant tax benefits. Entities established in free zones shall be subject to the laws and regulations governing the respective free zone authorities. The most significant benefits include no corporate tax on qualifying income, no personal income tax, full exemption from import/export duties, and free capital transfer.
Source: UAE Ministry of Economy
Free zone companies can repatriate 100% of their profits and capital. Businesses can leverage these free zones to access the UAE market effectively, optimizing their operations and reaching a broader customer base.
Setting up a business in a Dubai free zone is a relatively straightforward process. The streamlined procedures, coupled with minimal paperwork requirements, make it an attractive option for startups and entrepreneurs. The setup process typically takes 2-4 weeks, depending on the free zone and business type.
Dubai’s free zones are renowned for their state-of-the-art infrastructure, providing businesses with a conducive environment for operations. Modern office spaces, warehouses, and advanced facilities ensure that companies have the necessary resources to thrive.
In October 2025, the Dubai government announced the Free Zone Mainland Operating Permit under Dubai Executive Council Decision No. 11 of 2025. This permit allows free zone-based companies to conduct business on the mainland without establishing a separate legal entity.
The initiative has been launched by the Dubai Department of Economy and Tourism (DET) in partnership with the Dubai Free Zone Council. It allows eligible free zone companies holding a Dubai Unified Licence (DUL) to apply for the permit digitally via the Invest in Dubai (IID) platform.
This development expands opportunities for more than 10,000 existing free zone firms, providing access to local markets and government contracts while improving chances of growth.
One of the best free trade zones in the world, DMCC focuses on professional services, finance, and the trade of commodities. It has a robust investment ecosystem, business-friendly policies, and modern infrastructure.
As the premier economic hub, DIFC is home to many international banks, fintech startups, and wealth management firms. DIFC adheres to a separate legal system driven from common English law.
Established in 1985, JAFZA was the first free trade zone in the Middle East and remains one of the largest. It excels in logistics and offers streamlined access to Jebel Ali Port and Dubai airports.
Technology and innovation hub offering state-of-the-art infrastructure, research facilities, and collaborative spaces to support the growth of tech startups and established companies.
Located near Dubai International Airport, DAFZ caters to aviation-related businesses, logistics companies, and technology firms requiring quick access to global markets.
Identifying the activity is the first step for obtaining a business license as the parties relating to such activity and the permitted legal forms are identified through the activity. There are more than 2,000 business activities listed by the Department of Economy and Tourism.
Source: UAE Ministry of Economy
Dubai has around 30 free zones, each catering to specific industries and sectors. Consider factors like location, infrastructure, costs, and industry focus when making your decision. Select a free zone that aligns with your business goals and operational requirements.
Determine your company’s legal structure, whether it’s a Free Zone Company (FZC), Free Zone Establishment (FZE), or Free Zone Limited Liability Company (FZ LLC). The FZ LLC offers limited liability protection and can be owned by individuals or corporate entities.
Choose a unique company name that complies with UAE naming conventions and register it with the selected free zone authority. Your business name should be unique and follow specific standards set by the authorities.
Submit the required documents including passport copies, business activity details, and lease agreements to the free zone authority. Obtain the required licenses for your chosen business activities.
Opt for a flexi-desk, shared office, or full office depending on your business needs and budget. Free zones offer various office options to suit different requirements, from virtual offices to dedicated facilities.
After receiving your business license, open a corporate bank account to manage your company’s financial transactions. Dubai offers a wide range of banking options, including both local and international banks. Banks typically require business license and company registration documents.
Apply for residence visas for yourself, employees, and other stakeholders. The visa process involves medical fitness tests, biometrics submission, and Emirates ID registration. The number of visas you can sponsor depends on your office space and license package.
The cost of setting up a company in a Dubai free zone varies based on several factors, including business activity type, free zone location, office space requirements, and number of visas.
The setup cost typically ranges from AED 12,500 to AED 60,000, depending on the free zone and business requirements. Entry packages start from AED 12,500 for a 0-visa license.
Trade license: Between AED 10,000 to AED 50,000 depending on the free zone and business activity
Office space:
Visa fees: Investor and employee visas typically cost between AED 4,000 to AED 7,000 per visa
Administrative fees: Registration, document attestation, and other formalities can add AED 3,000 to AED 5,000
Documents needed for free zone company formation in Dubai typically include:
Trade licenses in Dubai free zones are typically valid for one year and need to be renewed annually. Make sure to renew your license before the expiration date to avoid penalties or legal issues.
Some free zones may require companies to undergo an annual audit to ensure financial transparency and tax compliance.
Visa renewals are an essential part of your business’s compliance process. Visas are renewable every 2 to 3 years depending on the zone’s policies.
You must comply with UAE labor laws and regulations regarding employee rights and benefits.
| Aspect | Free Zone | Mainland |
|---|---|---|
| Ownership | 100% foreign ownership | 100% foreign ownership (since 2021) |
| Business scope | Limited to free zone (unless mainland permit obtained) | Can operate anywhere in UAE |
| Office requirement | Physical or virtual office in free zone | Physical office required |
| Tax benefits | Corporate tax exemptions | Subject to corporate tax (9% on profits over AED 375,000) |
| Setup cost | AED 12,500 – AED 60,000+ | Generally higher |
| Setup time | 1-4 weeks | 2-6 weeks |
| Local sponsor | Not required | Not required (since 2021) |
Dubai’s strategic location as a regional hub provides businesses in free zones with easy access to global markets, connecting Asia, Europe, Africa, and the Middle East.
Free zones offer streamlined administrative procedures, reducing bureaucracy and making the setup process more efficient. The government’s commitment to economic diversification has created a supportive ecosystem for businesses.
Free zones host thriving business communities with renowned brands, providing excellent networking opportunities for your business growth and collaboration.
Each free zone caters to specific industries with tailored infrastructure and services, whether you’re in technology, healthcare, media, logistics, or finance.
Dubai’s free zones continue to offer unmatched opportunities for entrepreneurs and businesses looking to establish their presence in the Middle East. With over 30 specialized zones, streamlined setup processes, significant tax benefits, and the new 2025 mainland operating permit, Dubai free zones provide an ideal environment for business growth and success.
Setup Dubai Business specializes in company formation in Dubai free zones and provides comprehensive support throughout the entire setup process, from documentation to banking, visas, and ongoing compliance.
Contact us for expert guidance on choosing the right free zone and completing your business setup efficiently.
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