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Dubai’s free zones remain the preferred choice for international entrepreneurs looking to establish a fully foreign-owned business in the UAE. With over 30 free zones, each tailored to specific industries and business models, choosing the right one can make or break your venture. At Setup Dubai Business, we handle the entire Dubai free zone company formation process so you can focus on what matters most: growing your business.
A free zone company is a business entity registered within one of Dubai’s designated economic zones, each governed by its own Free Zone Authority. These zones operate independently from the UAE mainland, offering a distinct regulatory framework designed to attract foreign investment.
Unlike mainland companies in Dubai, free zone entities are set up under the rules of their specific authority, which means faster incorporation, simplified licensing, and a business-friendly environment built for international trade.
In 2026, free zone companies continue to evolve. The One Free Zone Passport initiative now allows businesses to operate more fluidly across multiple free zones, and the Re-Domiciliation Law lets you transfer your company between jurisdictions without losing your business history or track record.
Dubai free zones were created with one clear purpose: to make it as easy and profitable as possible for foreign investors to do business. Here is what you gain when you register a free zone company:
100% ownership with no local sponsor or partner required. You retain complete control over your company and its profits.
0% personal income tax. Corporate tax applies only at 9% on profits above AED 375,000, with qualifying free zone entities potentially benefiting from reduced rates.
100% repatriation of capital and profits. No currency restrictions on moving funds in or out of the country.
Full exemption from import and export duties for goods moving through the free zone, making it ideal for trading and logistics operations.
Free zone company owners can qualify for the 10-year Golden Visa, providing long-term residency stability for you and your family.
Access to modern office spaces, virtual offices, warehousing, co-working hubs, and industry-specific facilities from day one.
Beyond these core benefits, free zone companies enjoy simplified regulatory processes, digital-first licensing that allows end-to-end online formation, and access to a growing network of international trade agreements through the UAE.
Not all free zones are created equal. Each one caters to specific industries and offers different license types, visa allocations, and pricing structures. Here are the most popular choices for entrepreneurs in 2026:
| Free Zone | Best For | Starting Cost (AED) |
|---|---|---|
| DMCC | Commodities trading, general trading, consulting | ~15,000 |
| JAFZA | Manufacturing, logistics, large-scale trading | ~25,000 |
| IFZA | Cost-effective setup, startups, consultancies | ~10,000 |
| DAFZA | Aviation, aerospace, import/export businesses | ~18,000 |
| Dubai Silicon Oasis | Technology, IT, software, R&D companies | ~12,000 |
| Dubai Internet City | Tech companies, digital media, IT services | ~20,000 |
* Costs are approximate and vary based on license type, visa allocation, and office space requirements. Contact us for a detailed, personalized quote.
Other notable free zones include Dubai Media City for media and publishing businesses, Dubai Healthcare City for medical and pharma companies, and Dubai Design District (d3) for creative professionals. The right choice depends entirely on your business activity, growth plans, and budget.
The free zone company formation process in Dubai has been streamlined significantly with digital licensing platforms. Most setups can be completed within 3 to 7 business days, depending on the free zone and the complexity of your application. Here is how it works:
Select the free zone that aligns with your industry and register your business activity. Each free zone has a pre-approved list of activities. If you are unsure which one fits your business model, our consultants will match you with the best option.
Your trade name must comply with the free zone’s naming guidelines. It cannot contain offensive terms, religious references, or names of existing businesses. We handle the name reservation and approval process for you.
Required documents typically include passport copies, proof of address, a brief business plan, and bank reference letters. Some free zones also require a UBO (Ultimate Beneficial Owner) declaration as part of 2026 compliance requirements.
Once approved, you receive your trade license, which is your legal permit to operate. License types include Commercial, Professional, Industrial, and Tourism, depending on your business activity.
Opening a business bank account requires your trade license, incorporation documents, a detailed business plan, and compliance documentation. Banking requirements have become more stringent in 2026, so having professional support makes a significant difference.
Your free zone license entitles you to a specific visa allocation. Apply for investor visas, employee visas, or explore Golden Visa eligibility. Visa quotas depend on the free zone and your office space type.
The total cost of Dubai free zone company formation depends on several factors: the free zone you choose, the number of visa allocations, office space type (flexi-desk, virtual office, or physical office), and your selected business activities.
As a general guide, expect the following ranges in 2026:
Budget-Friendly Free Zones
AED 10,000 – 15,000
IFZA, Shams, Ajman Free Zone (1 visa, flexi-desk)
Mid-Range Free Zones
AED 15,000 – 30,000
DMCC, DAFZA, DSO (2-3 visas, shared desk)
Premium Free Zones
AED 30,000 – 50,000+
DIFC, JAFZA, DIC (physical office, multiple visas)
These costs typically cover the trade license, registration fees, and basic office facility. Additional expenses include visa processing (AED 3,000-5,000 per visa), establishment card, medical tests, and Emirates ID. For a full breakdown of business setup costs in Dubai, speak with our team for an accurate, customized estimate.
This is one of the most common questions entrepreneurs face. The answer depends on your business goals, target market, and how you plan to operate in the UAE.
| Factor | Free Zone Company | Mainland Company |
|---|---|---|
| Ownership | 100% foreign ownership | 100% foreign ownership (since 2021) |
| Market Access | International + free zone (mainland access with new permits) | Full UAE mainland market access |
| Office Space | Within the free zone (virtual options available) | Anywhere in Dubai |
| Corporate Tax | Potential 0% rate for qualifying income | 9% on profits above AED 375,000 |
| Setup Speed | 3-7 business days | 7-14 business days |
| Best For | International trade, tech, consulting, startups | Local retail, services to UAE customers, government contracts |
A key 2026 development: free zone companies can now obtain mainland permits to access the local UAE market without forming a separate entity. This bridges the traditional gap between the two structures and gives free zone businesses far greater flexibility. For a detailed comparison, see our guide on the difference between mainland and free zone companies.
While Dubai free zones offer significant tax advantages, there are compliance requirements every company must meet:
Corporate Tax: The UAE’s federal corporate tax rate is 9% on net profits exceeding AED 375,000. Qualifying Free Zone Persons (QFZPs) may benefit from a 0% rate on qualifying income, provided they meet substance and activity requirements.
VAT Registration: Businesses with annual turnover exceeding AED 375,000 must register for VAT at 5%. Updated 2026 VAT rules have simplified paperwork and introduced a 5-year refund window.
E-Invoicing: Mandatory e-invoicing rolls out in phases starting July 2026 for businesses with AED 50M+ revenue. SMEs will follow in later phases through 2027.
Economic Substance: Companies must demonstrate real economic substance in the UAE, including adequate staff, premises, and operating expenditure.
Annual Renewal: Trade licenses must be renewed annually. Some free zones require audited financial statements for renewal.
Staying compliant is critical. Our VAT and accounting services team ensures your business meets every regulatory deadline, from tax filings to license renewals.
Setting up a free zone company in Dubai is straightforward on paper, but the details matter. Choosing the wrong free zone, underestimating documentation requirements, or navigating bank account applications without guidance can delay your launch by weeks.
Here is what our clients get when they work with us:
From free zone selection to license issuance, visa processing, and bank account opening, we manage every step.
We analyze your business activity, budget, and goals to recommend the free zone that offers you the best value.
Our established relationships with free zone authorities mean quicker approvals and fewer delays.
Beyond formation, we handle government liaison, document processing, renewals, and compliance management.
Dubai offers more than 30 free zones across virtually every industry. Here is the full directory of free zones available for company formation:
Yes. As of 2026, free zone companies can obtain mainland permits to sell goods and services directly to UAE-based customers. Previously, free zone companies were restricted to trading within their zone or internationally. This new framework significantly expands your market reach.
The legal age for business ownership in the UAE has been reduced to 18 years (from 21), opening doors for younger entrepreneurs.
Most free zone companies can be fully operational within 3 to 7 business days, thanks to digital-first licensing platforms. Bank account opening may take an additional 2-4 weeks depending on the bank.
Many free zones now allow remote incorporation through digital platforms. However, you will typically need to visit Dubai for visa stamping and bank account opening. Our team can guide you on which steps require physical presence.
Free zone companies that qualify as a Qualifying Free Zone Person (QFZP) and earn qualifying income can benefit from a 0% corporate tax rate. Non-qualifying income is taxed at the standard 9% rate. Maintaining proper substance and compliance is essential to preserve this benefit.
Disclaimer: The information on this page reflects current regulations as of early 2026 and is subject to change. Free zone rules, fees, and government policies are updated periodically. This content is for informational purposes and does not constitute legal or financial advice. For guidance specific to your situation, please consult with our business setup experts.
Our experts will help you choose the right free zone, handle all documentation, and get your business operational in days.
for more details call +971 55 378 8000 or e-mail us in info@ebsuae.com
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