Free Zone Company Formation in the UAE
Free zone company formation in the UAE from AED 12,500. Compare IFZA, SHAMS, RAKEZ, Meydan and DMCC on cost, visa quota and setup time, then get fixed quotes.
Business Setup AE editorial review Last reviewed 2026-09-09
Quick answer
A UAE free-zone company is licensed by a named free-zone authority and can offer 100% foreign ownership. Price, timing, workspace, visa eligibility and permitted activities vary by authority and package; compare current source-linked packages and obtain an itemised renewal quote before paying.
- Year-one cost
- Package and authority dependent
- Setup time
- Authority and approval dependent
- Ownership
- 100% foreign
- Visas
- Quota set by the authority and facility
A free zone company is a legal entity registered inside one of the UAE's 45+ designated economic zones. Each zone is its own licensing authority: it issues your trade licence, registers your shareholders, allocates your visa quota and provides the address your licence is tied to. That structure is why free zones can complete a formation in days rather than weeks, and why pricing is published rather than negotiated.
For most founders the decision is not "free zone or not" — it is which free zone. Zones differ enormously on price, permitted activities, visa quotas per facility, banking reputation with UAE banks, and the cost of renewal in year two. A cheap first-year licence attached to a zone your bank dislikes is a false economy.
This guide sets out what a free zone company gives you, its limitations, zone comparisons and the sequence from name reservation to Emirates ID. Source-linked package offers are distinct from illustrative planning ranges. Where the provider itemises service fees, those details are displayed; otherwise the fees remain unstated or quote-only. Confirm the full scope in writing.
Check which free zones list your activity
Search 5,886 activities from RAKEZ, IFZA, Meydan and DMCC lists before you shortlist a zone or package.
Search business activities →Which UAE free zone fits your business requirement?
| Your priority | Free zones to compare |
|---|---|
| Lowest entry cost / solo founder | RAKEZ, SHAMS, SPC, Ajman Free Zone, UAQ Free Zone |
| Prestigious Dubai commercial address | DMCC, Meydan, IFZA, Dubai Airport Free Zone, DWTC |
| Media & creative | twofour54, SHAMS |
| Technology & innovation | Dubai Silicon Oasis, Masdar City, SRTIP, Dubai CommerCity |
| Financial services | ADGM |
| Logistics, trading & industrial | JAFZA, KEZAD, Hamriyah, SAIF Zone |
If you are unsure where to start, the RAKEZ free zone guide is a useful benchmark for cost and flexibility. Need to trade onshore instead? Compare it with a mainland LLC, and read our guide to opening a business bank account before you commit.
A starting shortlist, not a recommendation — compare live packages and confirm your activity is allowed in each zone.
| Line item | Illustrative range (AED) | Notes |
|---|---|---|
| Trade licence (1 year) | 5,750 – 15,000 | Varies by zone and activity count |
| Registration / incorporation fee | 1,500 – 3,000 | One-off in most zones |
| Flexi-desk / smart office | 1,000 – 4,000 | Required to hold visa quota |
| Establishment card | 1,200 – 1,800 | Needed before any visa |
| E-channel / immigration deposit | 2,000 – 5,000 | Partly refundable in some zones |
| Residence visa (per person) | 3,500 – 5,700 | Entry permit, status change, medical, Emirates ID |
| Provider service fee | 1,500 – 5,000 | Displayed only when itemised by the provider; otherwise unstated or quote-only |
| Illustrative year-one budget | 18,000 – 28,000 | Planning example for one owner with one residence visa; not a confirmed total |
UAE free zones compared
Prices below are the lowest current provider package in the verified catalogue, not an authority fee or guaranteed total. Open a zone guide and provider source to check inclusions, visas and renewal terms.
| Free zone | Emirate | Verified packages | Published starting package | Last verified |
|---|---|---|---|---|
| Ajman Free Zone | Ajman | 1 | Request quote | 2026-10-07 |
| DMCC | Dubai | 16 | From 10,345 AED | 2026-10-07 |
| DWTC | Dubai | 1 | Request quote | 2026-10-07 |
| IFZA | Dubai | 9 | From 11,900 AED | 2026-10-07 |
| RAKEZ | Ras Al Khaimah | 13 | From 5,510 AED | 2026-10-07 |
| SHAMS | Sharjah | 8 | From 5,750 AED | 2026-10-07 |
| SPC | Sharjah | 8 | From 6,375 AED | 2026-10-07 |
What a free zone licence lets you do
A free zone licence permits you to trade internationally, invoice clients anywhere in the world, apply for a corporate bank account in the UAE, sponsor residence visas for yourself and staff, and own 100% of the shares with no local partner. Bank account opening is subject to each bank's own compliance and KYC approval, and no setup provider can guarantee it; the number of visas depends on the facility you lease and the authority's quota approval. It is the standard structure for consultants, agencies, e-commerce sellers, traders shipping via UAE ports, and holding companies.
The main limit is onshore activity. Selling into the UAE mainland market from a free-zone licence depends on the activity and the authority: common routes are a mainland distributor, a dual licence offered by some zones, or a mainland branch, and some services can be supplied cross-border under the terms the licensing authority sets. Confirm the route with the free zone and the relevant economic department before you commit, and read the mainland guide if UAE-based retail or public-sector buyers are your core market.
- 100% foreign ownership with no UAE national shareholder or service agent
- Full repatriation of capital and profits
- Customs duty exemption on goods re-exported from the zone
- 0% corporate tax on Qualifying Income for a Qualifying Free Zone Person, and 9% on taxable income that is not Qualifying Income — a QFZP does not get the ordinary 0% band on the first AED 375,000 of non-qualifying income (Federal Tax Authority)
- Residence visas for owner, family and staff subject to facility quota
- Many zones accept a flexi-desk or shared workstation as the licensed address, but the facility required and the visa quota it carries are set by each authority and activity
Free zone vs mainland vs offshore — decide in 60 seconds
The three UAE structures answer three different questions: where will you sell, do you need visas, and do you need a physical presence. Free zone suits international and online revenue with a small visa need. Mainland suits UAE-market and government revenue. Offshore suits asset holding with no visas at all.
| Factor | Free zone | Mainland | Offshore |
|---|---|---|---|
| Year-one cost | AED 12,500 – 24,000 | AED 15,200 – 30,000 | AED 8,000 – 14,000 |
| Ownership | 100% foreign | 100% foreign (most activities) | 100% foreign |
| Trade on UAE mainland | Activity-dependent — commonly via distributor, dual licence or mainland branch | Permitted for licensed activities | No — non-trading holding vehicle |
| Residence visas | Quota set by the authority and facility | Assessed by the authority from registered premises | None |
| Physical office required | Flexi-desk accepted in many zones — authority dependent | Registered premises with Ejari | No |
| Setup time | 3 – 7 working days | 5 – 10 working days | 2 – 5 working days |
| Government tenders | Activity-dependent — usually needs a mainland branch or permit | Yes | No — non-trading holding vehicle |
Choosing the right free zone
Price is the wrong first filter. Start with your activity: DMCC is built for commodities and precious metals, DAFZA and JAFZA for logistics near the airport and port, Dubai Internet City for tech, twofour54 for media in Abu Dhabi. If your activity is generic — consultancy, trading, e-commerce — then cost-per-visa and bank acceptance become the deciding factors.
Second, count the visas you will need in 24 months, not today. Upgrading a flexi-desk to a larger quota mid-term costs more than buying the right package at the start. Third, check the year-two renewal price: several zones discount aggressively in year one and normalise afterwards.
Four common scenarios — with assumptions stated
Real budgets depend on your activity, visa count and zone, so each scenario below states its assumptions and uses the lowest current provider-published package that fits them. These are starting prices, not guaranteed totals — confirm inclusions, visa processing fees and the year-two renewal with the provider before paying.
| Scenario | Assumptions | Typical starting point |
|---|---|---|
| Solo consultant, no visa | One shareholder, consultancy activity, already holds a UAE visa or lives abroad | Zero-visa free-zone licence — SHAMS packages from around AED 5,750, Masdar City from around AED 7,000 |
| Founder who needs one residence visa | One shareholder, one visa, flexi-desk acceptable | One-visa package — KEZAD packages from around AED 9,450; budget separately for visa processing (entry permit, medical, Emirates ID) where the provider lists it as excluded |
| Online seller | E-commerce activity, payment gateway needed, no warehouse | Zero or one-visa e-commerce licence in SHAMS, IFZA or Meydan; bank and gateway approval matter more than the headline price |
| Trading business with storage | Physical goods, customs code, warehouse or storage facility | Mainland or a logistics free zone such as KEZAD or JAFZA with leased premises — flexi-desk packages do not fit; expect premises and visa quota to drive the cost |
Corporate tax and free zone companies
UAE corporate tax has applied since June 2023. A free-zone company keeps a 0% rate on Qualifying Income only if it is a Qualifying Free Zone Person: adequate substance in the zone, qualifying activities, non-qualifying revenue within the de minimis threshold, transfer-pricing compliance and audited financial statements. Where those conditions are met, the Federal Tax Authority applies 9% to taxable income that is not Qualifying Income, without the ordinary 0% band on the first AED 375,000. If the company fails the QFZP conditions it is taxed like any other taxable person, at 0% up to AED 375,000 and 9% above it.
Every free zone company must register for corporate tax with the Federal Tax Authority regardless of rate, and file annually. Budget for an accountant from day one — the cost of retrospective bookkeeping exceeds the cost of doing it monthly.
Who this option suits best
- Consultants and agencies invoicing clients outside the UAE
- E-commerce sellers shipping via UAE fulfilment or 3PL
- Traders re-exporting goods through UAE ports with duty relief
- Founders who need a residence visa quickly and cheaply
- Holding structures for IP, shares or regional subsidiaries
- Remote founders who want fully digital incorporation
Step-by-step process
- 1
Confirm activity and zone1 day
Match your revenue model to activity codes and shortlist two or three zones on cost per visa, bank acceptance and renewal price.
- 2
Reserve the trade name1 day
Submit three names. Avoid religious references, country names and abbreviations of personal names.
- 3
Submit KYC and documents1 day
Passport copies, photos, proof of address and a short business plan for regulated activities.
- 4
Receive initial approval and pay1 – 2 days
The zone issues initial approval; you pay licence, registration and facility fees.
- 5
Sign incorporation documents1 – 2 days
MOA/AOA and lease are signed digitally or in person. The zone then issues the trade licence and certificate of incorporation.
- 6
Establishment card and e-channel2 – 4 days
Immigration registration for the company — mandatory before any visa application.
- 7
Entry permit, medical and Emirates ID7 – 14 days
Entry permit, status change if you are in-country, medical fitness test, biometrics, then visa stamping.
- 8
Open the corporate bank account5 – 20 days
Compliance review with the bank. Prepare invoices, contracts and a source-of-funds narrative to avoid delays.
Documents required
- Passport copies (valid 6+ months) for every shareholder and manager
- Passport-size photo with white background for each applicant
- Proof of address or a recent utility bill / bank statement
- Three proposed trade names in order of preference
- Business activity list and a short business description
- Emirates ID and visa copy or entry stamp if you are already in the UAE
- No-objection certificate if you hold a UAE employment visa
- Business plan for regulated activities (financial services, education, healthcare)
Realistic timeline
| Stage | Duration |
|---|---|
| Name reservation and initial approval | 1 – 2 working days |
| Licence issuance | 2 – 4 working days |
| Establishment card | 2 – 4 working days |
| Residence visa (entry to Emirates ID) | 7 – 14 working days |
| Corporate bank account | 1 – 4 weeks |
Planning ranges are illustrative, not confirmed authority tariffs or provider quotations. Current package offers carry their own source and check date. Service fees are displayed only where itemised by the provider; unstated fees, renewal and other missing items require a dated written quote.
Common mistakes and how to avoid them
Choosing the cheapest licence without checking renewal
Fix: Ask for the year-two invoice in writing before you pay year one.
Buying a package with too few visa slots
Fix: Plan 24 months ahead; the quota is tied to your facility, not your licence.
Selecting a zone your bank will not onboard
Fix: Confirm which banks the provider actually opened accounts with in the last 90 days.
Adding unrelated activities to "future-proof"
Fix: Extra activity groups raise the fee and can trigger extra approvals; add them later when needed.
Assuming free zone means zero tax
Fix: Register with the FTA and meet Qualifying Free Zone Person conditions to keep 0% on qualifying income.
Assuming onshore sales need no extra permission
Fix: If you invoice UAE customers onshore, confirm the route with the zone and the economic department, and price a distributor, dual licence or mainland branch into the decision where one is required.
Myth vs reality
| Myth | Reality |
|---|---|
| Free zone companies pay no tax at all | 0% applies only to Qualifying Income of a Qualifying Free Zone Person; everyone must register and file. |
| You need to fly to the UAE to incorporate | Most zones allow remote incorporation; you only travel for medical and Emirates ID biometrics. |
| A cheap licence means a cheap company | Establishment card, e-channel deposit and visa costs are usually excluded from headline prices. |
| A free-zone licence automatically covers mainland trading | It depends on the activity and the authority — onshore sales often need a distributor, a dual licence or a mainland branch. |
Compliance after licensing
- Corporate tax registration with the FTA — 9% applies on taxable profit above AED 375,000; 0% below it. Small Business Relief may apply to revenue under AED 3m.
- VAT registration is mandatory once taxable turnover passes AED 375,000 in 12 months, and voluntary from AED 187,500.
- Economic Substance notifications and reports applied only to financial years ending on or before 31 December 2022 — no new ESR filings are due for later years (Ministry of Finance).
- Ultimate Beneficial Owner (UBO) register kept with the licensing authority and updated within 15 days of any change.
- Anti-Money Laundering (AML) registration on the goAML portal for designated non-financial businesses and professions.
- Annual licence and establishment-card renewal, plus audited financials where the free zone or activity requires them.
Regulators referenced: Ministry of Economy (UAE) · Dubai Department of Economy and Tourism (DET) · Abu Dhabi Department of Economic Development (ADDED) · Federal Tax Authority (FTA) · General Directorate of Residency and Foreigners Affairs (GDRFA) · Ministry of Human Resources and Emiratisation (MOHRE)
Latest UAE Free Zone Guides & Cost Updates
View all guidesUAE Establishment Card (Immigration Card): A Founder's Guide
What the UAE establishment card is, why every visa-sponsoring company needs one, documents, how to apply through ICP or GDRFA, renewal timing and common delays.
6 min read · Published Read guide JurisdictionFujairah Free Zone Company Setup: Licence, Activities, Cost and Process
Fujairah Free Zone licence cost drivers, activities, documents and visa options explained — plus how FFZA compares with UAQ, Ajman and RAKEZ.
9 min read · Published Read guide JurisdictionAjman Media City Free Zone: Licence, Cost and Setup Guide
Ajman Media City Free Zone company formation explained: licence types, activities, visas, cost drivers and how AMC differs from Ajman Free Zone.
7 min read · Published Read guideFrequently asked questions
How much does free zone company formation cost in 2026?
Which is the cheapest free zone in the UAE?
Can a free zone company trade on the UAE mainland?
How many visas can a free zone company get?
Do I need a physical office?
How long does free zone setup take?
Can I own 100% of a free zone company?
What happens if I do not renew the licence?
People also ask
Should I get a freelance permit or form a company?
A freelance permit suits one person billing under their own name with low setup cost. Form a free zone company when you want to hire staff, add partners, sponsor more visas, or have clients who require a company invoice and bank account.
Is a free zone company good for e-commerce?
Yes. An e-commerce activity in Meydan, IFZA or SHAMS lets you sell online globally, use UAE fulfilment centres and open payment gateways with a UAE bank account.
Can I convert a free zone company to mainland later?
You cannot convert directly. The usual route is to register a mainland entity or branch and migrate contracts, or use a dual-licence free zone that allows a DED licence on the same shareholding.
Do free zone companies need audited accounts?
Some zones — DMCC, JAFZA, DAFZA and ADGM — require annual audited financial statements. All companies claiming the 0% Qualifying Free Zone Person rate need audited accounts.
Can my family get visas on my free zone company?
Yes. Once your own residence visa and Emirates ID are issued you can sponsor a spouse and children, subject to a salary or attested tenancy requirement.
Founder checklist
- Confirm the exact activity codes you need before paying any fee
- Compare at least three providers on total year-one cost, not licence cost alone
- Check the visa quota attached to your chosen facility (flexi-desk vs office)
- Ask what is excluded: establishment card, e-channel deposit, medical, Emirates ID, PRO fees
- Confirm bank-account support and which banks the provider actually opens with
- Register for corporate tax within the deadline after licence issuance
- Diarise your licence renewal date and UBO register updates
Why you can trust this guide
- Independent marketplace — Business Setup AE does not form companies and takes no commission on provider pricing
- Package prices are read from each provider's own published page or PDF and stored with that source URL and check date
- Government fee figures are cited to the published schedule of the relevant authority; where an authority does not publish a figure we say so instead of estimating
- We do not audit provider operations, licence standing or adviser credentials — see how we verify for exactly what a verification covers
Editorial ownership: Business Setup AE Editorial Team. See our editorial and corrections policy and package verification method.
Related guides and services
Official government sources
Fees, thresholds and licensing rules on this page are checked against these official UAE government and regulator sources.
- u.ae — free zones in the UAEOfficial list of UAE free zones and ownership rules
- Federal Tax Authority — Qualifying Free Zone PersonConditions for the 0% corporate tax rate in free zones
- Ministry of Economy — UAEFederal commercial registration, trade names and company law
Topics covered
Get fixed quotes from providers with source-checked packages
Tell us what you need once. Verified UAE formation firms reply with fixed, itemised pricing — they reply to you directly.
