How to set up a business in the UAE free zone? 

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Are you thinking of starting your new business setup in UAE? UAE free zone is the best choice.  

UAE is the best place to start any type of business when compared to other countries. It is because of the economic stability with favorable tax conditions. In UAE there are more than 40+ free zones and 25+ free zones are in Dubai. Dubai has the most numbers of free zones in the UAE.   

Most entrepreneurs choose Dubai-free zones for their business setup in UAE. The perks of having a business setup in Dubai-free zones or any UAE-free zones include low corporate tax, world-class infrastructure, strategic location, and a stable economy. You can enjoy 100% foreign ownership!  

In this guide, you will get all the answers you are looking for in detail. Learn what a free zone is, the steps to set up a business in UAE free zones, the best free zones in the UAE for startups, costs related to free zone company formation, and the benefits. 

Let’s get started! 

What is a free zone in UAE? 

Free zones are also known as Free Trade Zone. A free zone is a special designated economic zone where individuals and companies are allowed to operate business setups in the UAE. The free zones in UAE are regulated by their own designated and relevant free zone authorities. In simple words, free zones are governed by their authorities and are not engaged with Ministry of Economy

Steps to set up a free zone company in UAE 

Without getting into more details, let’s get into the steps that are required to start a business in a UAE-free zone: 

1. Choose your business activity! 

The 1st step is to decide the business activities you will conduct.  

There are two types of licenses such as free zone company license or freelance permit. Mostly, Dubai free zones don’t allow all business activities and freelance permits. Free zone permits are only issued by a few. On the other hand, if you choose to set up a free zone company, it offers more flexibility. You can operate a business with 100% full ownership and employ others.  

The chosen business activities will decide the license category. It can be a professional, commercial, or general trading license. 

2. Choose a free zone 

After choosing your business activities, it is the right time to choose a free zone. A free zone must be selected based on your business needs. The several factors that need to be considered are:  

  • It must align with the sector of your business. For example, DSP (Dubai Science Park) caters to research or life sciences.  
  • Make sure to keep in check the required amenities and facilities to run your business. The facilities include office space, warehouses, required equipment, and others.  
  • If you are into trading, choose the best free zone in terms of location. For example, it must be near to the Airports, or seaports. It is then easier for logistic purposes.   

If you are new to Dubai and still are figuring out how to run your business here, read our article on How to Setup a Business in Dubai?

 3. Choose a unique name and register 

Now that we have chosen our desired free zone, it is now time to brainstorm. In Dubai, you need to register a unique trade name for your business setup. For that, you must comply rules and regulations set by the government of UAE.  

The two main things to consider while choosing a trade name include:  

  • The name must be unique, available, and without any sensitive language.  
  • If using a personal name, then it must be used with a full name. 

4. Gather your required documents 

Before applying for a business license in the UAE, you are required to gather these documents: 

  • Application form 
  • Visa copies of individual or all shareholders, if any. 
  • Emirates ID, if a UAE resident 
  • Business Plan 
  • Passport copies of all shareholders 
  • Other documents as per the requirements of specific free zones.  

5. Apply for your free zone business license  

You need to submit all the above-mentioned documents to the relevant free zone authority. After paying the dues and fees, you will receive your free zone business license. 

6. Obtain a residency visa 

After getting your business license, you can obtain a residency visa. It is usually valid for 2 years. The process is straightforward. Obtain an entry permit, clear a medical test set by the government of UAE, undergo biometrics for registration of EID (Emirates ID), and get visa stamping. 

7. Open a corporate bank account 

We know it is challenging to open your corporate bank account in Dubai. With our consultants, you can easily get it done. We will handle all the paperwork and help you choose the best bank in the UAE.  

After these 7 steps, you are all set to start your business journey in UAE! 

Best UAE free zones for startups 

Starting a business in Dubai’s free zones is a popular choice for startups in the UAE. There are many low-cost free zones for startups. Each free zone has its benefits. It depends on the nature of your business and the type of business activity you wish to conduct.

Here’s the list of the 10 best UAE free zones for foreign entrepreneurs. 

  1. MEYDAN Freezone 
  2. IFZA Freezone 
  3. JAFZA Freezone 
  4. DWTC Freezone 
  5. DMCC Freezone 
  6. SRTIP Freezone 
  7. SHAMS Freezone 
  8. SPC Freezone 
  9. SAIF Zone 
  10. Ajman Freezone 
  11. Ras Al Khaimah (RAK) Freezone 

Logos of best UAE free zones

Costs of UAE free zone company formation 

Costs related to free zone company formation include license fees, establishment card fees, and residency visas of owners or employees.

  • For a trade license, you can expect a price starting from AED 14,000 to obtain a trade license in Dubai Free Zones. The prices are subject to change according to the chosen free zone.   
  • For establishment cards in Dubai Free Zones, costs start from AED 2000. The fees can vary.  
  • For an investor residency visa, the cost of an entry permit and residency visa starts from AED 4750. In this fee, the EID and medical test are not included.   
  • For an employee visa, the cost of an entry permit and residency visa starts from AED 3750. In this fee, the EID and medical test are not included.