UAE Free Zone Business Setup in 2025
Set up your free zone company with 100% foreign ownership, operate from world-class hubs, and manage your business from anywhere. Perfect for international trade and services.
UAE Free Zone Business Setup in 2025 – Dubai and Other Emirates
Setting up a free zone company in the UAE lets you own 100% of your business, operate from a world-class hub, and manage your company from abroad if you wish. Free zones are designed for international trade, services and investment.
Key Benefits
Free zones offer specialized ecosystems for international business
100% Foreign Ownership
Complete ownership and control of your free zone company
Full Repatriation
Repatriate capital and profits without restrictions
No Customs Duty
No customs duty on goods within free zone or re-exported
Sector-Focused Ecosystems
Specialized zones for trade, logistics, technology, media, and finance
Modern Infrastructure
World-class facilities with simplified setup procedures
Flexible Office Options
Flexi desks, shared offices, and warehouses available
Official information available at:
Who Should Choose a Free Zone License
Free zone setup is ideal for businesses focused on international markets
Trading Companies
Import goods for storage, consolidation and re-export
Logistics & Distribution
Serve regional markets from strategic hubs
Digital Services
Consultancy and digital services for international clients
Startups
Lean, flexible structure with minimal office requirements
Holding Companies
Centralize group assets and investments
What Instacorp Handles for You
We manage the full lifecycle of your free zone company formation
Free zone selection based on sector, budget, and visa needs
Legal structure selection (FZ LLC, branch, etc.)
Trade name reservation and incorporation application
Preparation and submission of all free zone forms
Office or flexi desk leasing in chosen zone
License issuance and corporate documents collection
Corporate tax registration with FTA
VAT registration when required
Immigration setup and residence visas
Banking introductions and KYC support
Free Zone vs Mainland
Understanding the key differences to make the right choice
Regulator
Regulated by specific free zone authority (DMCC, JAFZA, IFZA, etc.)
Regulated by Department of Economic Development (DET) in each emirate
Where You Can Trade
Free to trade within free zone and with foreign markets. Mainland trade typically requires distributor or related entity.
Can trade directly anywhere in the UAE, subject to license activities
Office Requirements
Flexi desk, shared office, and warehouse options. Visa capacity linked to office size.
Physical leased office or shop registered with Ejari (Dubai)
Corporate Tax
Qualifying Free Zone Person: 0% on qualifying income, 9% on non-qualifying. Otherwise 9% standard rate.
0% on income up to AED 375,000, 9% above that threshold
VAT
5% standard rate. Some zones are Designated Zones with special VAT treatment for goods.
5% standard rate with same thresholds
Types of UAE Free Zones & Popular Locations
Choose from 40+ free zones across all emirates
Trading & Logistics
- Jebel Ali Free Zone (JAFZA)
- Dubai Airport Freezone (DAFZ)
- Dubai South
- Khalifa Industrial Zone Abu Dhabi (KIZAD)
- Sharjah Airport International Free Zone (SAIF Zone)
- Hamriyah Free Zone
Services, Media & Technology
- Dubai Media City
- Dubai Internet City
- Dubai Design District
- Meydan Free Zone
- SHAMS
- twofour54 (Abu Dhabi)
- IFZA
Financial Free Zones
- Dubai International Financial Centre (DIFC)
- Abu Dhabi Global Market (ADGM)
Licensing Options in UAE Free Zones
Each free zone offers various license categories
Step-by-Step Setup Process
Complete free zone company formation in 10 clear steps
Define Business Model & Strategy
Confirm your focus and identify facility needs
- Determine if focus is international, local, or mixed
- Decide on warehouses, studios, labs, or office desks
- Identify if mainland entity will be needed later
Choose Free Zone & Legal Form
Compare zones based on costs, visas, and sector focus
- Compare free zones on costs and visa capacity
- Evaluate banking friendliness and sector focus
- Decide between FZ LLC, branch, or other forms
Reserve Company Name
Select trade name that fits free zone rules
- Pick name compliant with free zone regulations
- Submit reservation through free zone portal
- Handle iterations if first choice unavailable
Prepare & Collect Documents
Gather all required documentation
- Passport copies, photos, proof of address
- UAE visa and Emirates ID if applicable
- Corporate documents for corporate shareholders
Submit Incorporation Application
Complete and submit application through free zone portal
- Complete application forms
- Upload all required documents
- Handle KYC interviews or clarifications
Lease Office or Flexi Desk
Choose facility matching budget and visa needs
- Select flexi desk, office, or warehouse
- Sign lease agreement for license issuance
- Plan visa quotas based on office size
Receive License & Documents
Collect trade license and corporate documents
- Trade license
- Certificate of incorporation
- Memorandum and articles of association
- Shareholder register
Open Corporate Bank Account
Prepare KYC pack and shortlist banks
- Prepare bank-ready KYC pack
- Shortlist compatible banks
- Schedule meetings and support through process
Register for Tax & VAT
Complete corporate tax and VAT registration
- Corporate tax registration with FTA
- VAT registration when threshold crossed
- Qualifying Free Zone Person status if applicable
Process Visas & Immigration
Apply for establishment card and process visas
- Establishment card and immigration registration
- Investor, partner and employee visas
- Medical tests, biometrics, and Emirates ID
Documents Required for Free Zone Formation
Individual Shareholders
- Passport copy (6+ months validity)
- Passport photo per zone specification
- UAE visa and Emirates ID (if applicable)
- Proof of address (utility bill or bank statement)
- NOC from current sponsor (if required)
Corporate Shareholders
- Certificate of incorporation or trade license
- Memorandum and articles of association
- Certificate of incumbency
- Board resolution approving investment
- Authorized signatory details
Company Documents
- Completed free zone application form
- Proposed trade name and activities
- Lease agreement for office/flexi desk
- Business plan (for regulated activities)
Cost of Free Zone Business Setup
Typical Cost Components
Note: Costs depend on which zone you choose, license type, number of shareholders, visa package and office size. Instacorp maintains updated fee schedules for major free zones.
Visas, Office Space & Substance Requirements
Visa Quotas
- Flexi desk packages: 1-3 visas
- Small offices: 4-6 visas
- Larger offices: ~1 visa per 8-9 sqm
- Quotas can be refused if office appears overcrowded
Substance for Corporate Tax
To maintain Qualifying Free Zone Person (QFZP) status:
- Adequate employees, expenditure and assets in the free zone
- Core income-generating activities carried out in the free zone
- Proper accounting records and transfer pricing documentation
If conditions are not met, the company can lose QFZP status and be taxed at 9% on all taxable income.
Official QFZP GuideTax, VAT & Compliance
Corporate Tax
- All free zone companies must register
- QFZP: 0% on qualifying income, 9% on non-qualifying
- Non-QFZP: 9% standard rate
VAT
- 5% standard rate on supplies and imports
- Designated Zones have special VAT treatment
- Registration required when threshold crossed
Ongoing Compliance
Free zone companies must:
- Renew licenses and leases annually
- Maintain accurate financial accounts and support for tax and VAT returns
- Keep corporate records up to date
- File corporate tax returns and pay any tax due on time
- File VAT returns and pay VAT where registered
Instacorp offers compliance support so you can focus on running your business rather than tracking every filing date.
Designated Zones, Customs & Re-Export
Understanding VAT treatment in Designated Zones
Designated Zones are specific free zones or areas that meet the conditions set under UAE VAT law and related Cabinet decisions.
- Certain movements of goods into and within Designated Zones can be treated as outside the scope of VAT
- Supplies of services in Designated Zones are generally subject to VAT at the standard rate
- Customs duty is still payable when goods enter the UAE mainland from a free zone
Important for traders: This treatment is crucial for high-volume traders who move goods through bonded warehouses and logistics hubs. Instacorp coordinates with tax advisers and references official FTA guides so your free zone and warehouse choices match your VAT and customs profile.
Why Set Up Your Free Zone Company with Instacorp
Free zone marketing often looks simple, but in reality you're dealing with multiple complex systems
The Challenges You Face
- Free zone rules and internal policies
- Corporate tax and VAT systems
- Banks' risk and compliance requirements
- Immigration and visa processes
How Instacorp Helps
- Selecting the right free zone for your industry, budget and visa needs
- Structuring your license and ownership to support banking and tax outcomes
- Handling all formation paperwork, resolutions and applications
- Guiding you through corporate tax and VAT registration requirements
- Managing visas and office upgrades as your team grows
- Providing ongoing support for renewals and compliance checks
You get a complete free zone solution rather than a basic incorporation that leaves you to navigate the rest alone.
Free Zone Setup FAQs
Can a UAE free zone company sell directly to customers in the mainland?
A free zone company can do business inside its own free zone and with foreign clients. To sell regularly to mainland customers, you typically work through a mainland distributor or set up a related mainland entity that can invoice onshore. Customs duty and VAT apply when goods move from the free zone into the mainland.
Do free zone companies still pay corporate tax?
Yes. Free zone companies are within the corporate tax regime. A Free Zone Person that qualifies as a Qualifying Free Zone Person can pay 0% corporate tax on qualifying income and 9% on non-qualifying income. If conditions are not met, the standard 9% rate applies.
Is a free zone company enough if my customers are only outside the UAE?
For many export-focused trading and service businesses, a free zone company is sufficient, especially if your work is done from the UAE but sold abroad. If you later add significant mainland revenue, Instacorp can help you add a mainland branch or related entity.
Do I have to visit the UAE to form a free zone company?
Many free zones allow incorporation to be completed remotely using digital onboarding and electronic signatures. However, banks and immigration authorities still typically require at least one visit for account opening and visa biometrics. Instacorp minimizes the number and length of trips required.
How long does it take to set up a free zone company?
If your structure is straightforward and documentation is in order, free zone company formation can often be completed within a few working days. Bank account opening and visa processing can take longer depending on the bank, sector and immigration workload.
Can I upgrade from a flexi desk to a larger office later?
Yes. Most free zones allow you to upgrade your facility as you grow. When you move to a larger office, your visa quota normally increases as well. Instacorp manages the upgrade process and any changes needed to your immigration records.
What is a Qualifying Free Zone Person (QFZP)?
A QFZP can pay 0% corporate tax on qualifying income and 9% on non-qualifying income. To maintain QFZP status, companies must demonstrate adequate substance in the free zone, including adequate employees, expenditure, assets, and core income-generating activities.
What are Designated Zones for VAT?
Designated Zones are specific free zones or areas that meet conditions under UAE VAT law. In these zones, certain movements of goods can be treated as outside the scope of VAT, subject to strict FTA rules. This is important for high-volume traders using bonded warehouses.
Important: All regulations, fees and requirements mentioned on these pages can change. Always confirm key details on official UAE government portals at the time you set up or update your business.
Ready to Start Your Free Zone Company?
Get complete free zone setup support across 40+ zones. Expert guidance for licensing, tax registration, visas, and banking. Choose the right zone for your business.
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