A guide to set up a business in the UAE free zones

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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.   
  • For office space, we at Emirates Business Setup usually offer business packages including flexi-desk options.   

5 benefits of business set up in Dubai free zone  

  1. In a Dubai Free Zone, foreign investors are allowed to own 100% ownership of their company, without the need for a local sponsor.  
  1. Dubai free zones offer attractive tax incentives, including lower corporate tax, 0% personal income tax, and 100% tax exemption on capital gains.  
  1. Setting up a business in a Dubai-free zone is a straightforward process. With less paperwork, many free zones allow the quick establishment of a company.  
  1. Dubai Free Zone offers a strategic location. Including proximity near to airports, or seaports making it easier for logistic and international trading.  
  1. Freezones offers modern world-class amenities. The amenities include storage spaces, high-speed internet, flexi-desk offices, and other options. 

How much time is required for free zone business setup? 

Business setup in a free zone in Dubai can vary from one free zone to another. The time required to start a business can range from one week to four weeks. It depends on different factors. The factors such as the chosen free zone, time of the year, company registration, and company name approval process can impact the setup process. 

Start a business in the free zone with Emirates Business Setup! 

Emirates Business Setup offers business setup services in the UAE. We assist entrepreneurs in setting up their businesses in UAE-free zones. Our team guides you through the entire process, from company registration to obtaining residency visas and business trade licenses. We can assist you in selecting the right free zone and handle all the paperwork!  

Furthermore, we assist with bank account opening, leasing office space, and employment visas. By choosing Emirates Business Setup, you can trust that your business will be set up cost-effectively. Our goal is to let you focus on growing your company while we take care of the rest.   

Frequently Asked Questions 

1. How to register a new business setup in UAE? 

If you are a foreigner and want to start your new business setup in UAE, you must register your business. Meanwhile, there are few steps you need to follow to register your business such as: 

  • Choose your business activity! 
  • Choose a unique trade name. 
  • Register your trade name. 
  • Gather all the required documents.
  • Apply for a business license. 
  • Pay the license fees. 
  • Obtain the license in 7-14 working days. 
  • Obtain a residency visa. 
  • Apply for a corporate bank account. 

2. How to choose a trade name for your free zone company setup?  

When choosing a trade name for your free zone company setup, there are several factors to consider: 

  • Choose a name that is relevant to your business or industry. 
  • Make sure the name you choose is unique and not already in use by another company. 
  • Ensure that the trade name complies with the regulations and guidelines set by the free zone authorities. Avoid using offensive or misleading names. 

3. What are the cheapest free zone company setup options in the UAE?

The cost of setting up a free zone company in the UAE can vary. However, most affordable options for setting up a free zone company include: 

  • Sharjah Publishing City Free Zone (SPC FZ) 
  • Ras Al Khaimah Economic Zones (RAKEZ) 

4. Can I open a corporate bank account with a free zone company in Dubai? 

Yes, you can open a corporate bank account with a free zone company in Dubai. 

5. How much does it cost to obtain a free zone license in UAE? 

The cost to obtain a free zone license in UAE starts from AED 14,000. However, the cost may vary depending on the specific free zone and type of business activity.  

6. What are the steps to set up your company in a free zone?  

Setting up a company in a free zone typically involves the following steps: 

  • Choose a free zone. 
  • Determine business activity. 
  • Prepare required documents.
  • Obtain necessary permits. 
  • Apply for a business license. 
  • Open a bank account. 

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