Next-level business setup in Dubai Free Zones

To establish a company set up in a Dubai free zone, you’ll need to follow these steps:

1. Define your firm’s activities and determine the appropriate business license (commercial trade, consultancy services, e-commerce, etc.)
2. Choose your company’s legal structure (Free Zone Company, Free Zone Establishment, Branch of a Local or International Company and more).
3. Register your company’s trade name, which must be unique to your business.
4. Pick a space and location for your company in any of Dubai’s 26 free zones so long as it aligns with your activities.
5. Complete and submit all the required documents to obtain initial approval for your company’s setup.
6. Pay the necessary fees and secure your business’s operating license.

In 2024, the cheapest business formation packages for investors looking to obtain low-cost trade licenses in free zones were offered by:

• International Free Zone Authority (IFZA) – AED 12,900
• Dubai Meydan Free Zone – AED 12,500
• Dubai South Free Zone company setup – AED 12,890 for one visa quota

Yes. One of the best benefits of business setup in a Dubai free zone is that your company will be 100% exempt from corporate and income taxes on your qualifying income. However, according to the Federal Tax Authority (FTA), 9% of corporate tax is applicable on non-qualifying income, meaning that which is:

• Derived from excluded activities.
• Obtained through non-qualifying activities where the other party involved is a non-free zone person.
• Generated from transactions with a free zone person, where that person is not the beneficial recipient of the services or goods.

The main difference between a free zone business and an LLC in Dubai is the ownership structure. A free zone license allows for 100% foreign ownership, while an LLC (entities registered on the mainland of the UAE) requires a local Emirati partner or service agent.

Absolutely. Non-residents can form and own corporations in Dubai and enjoy many of the same rights as UAE nationals. Some of the key advantages include access to:

• 26 free zones located throughout the emirate, offering a tax-free environment, 100% foreign ownership, full repatriation of capital and profits as well as no customs duty for goods or services within the zone.
• 2000+ licensed economic activities like trade, industry, agriculture, services, education and more to choose from.
• Many forms of legal business ownership structures, such as public and private shareholding companies, limited partnerships, limited liability companies, and more, following the enactment of Federal Law No. (26) of 2020 on Commercial Companies.
• Long-term residency visas of up to 10 years for potential investors and their families.

And this is just a peek into the incentives the UAE offers foreign entrepreneurs to invest in its national economy. Enlist the help of excellent mainland and Dubai free zone company setup consultants like Bizvisor today and take the first step towards establishing a successful enterprise in this thriving economic hub.

Yes. In fact, as part of Bizvisor’s support services for business setup in a Dubai free zone, we help you through the process of opening an account with a reputed UAE bank. It usually takes two to four weeks to set up an account, depending on the bank and whether the required documentation is complete. Some banks may also provide expedited services for an extra fee.

A few standard documents you may need to prepare for the bank account opening include:

• Company’s trade license  
• Certificate of incorporation  
• Memorandum and Articles of Association  
• Passport copies of shareholders and directors  
• Summary of the business plan  
• Proof of address for all directors and shareholders

Although business setup in Dubai free zones holds great benefits like tax exemptions on corporate income, 100% foreign ownership, streamlined import/export procedures and no trade barriers within the same jurisdiction, there are also some limitations to consider, including:

• Trade restrictions with companies outside the free zone (although this doesn’t apply to international commerce).
• Limitations on onshore expansion into other UAE markets.
• A minimal choice of office spaces since businesses are confined to the free zone’s jurisdiction, which often leads to higher rental costs.
• Restrictions on the types of activities a free zone company can engage in, based on the specialization of the jurisdiction and its governing authority.

Companies in free zones are governed by the local authorities of each emirate, meaning that each free zone has its own procedures and regulations as to where it can conduct business. Typically, a firm registered in a specific free zone can’t do business outside that zone, like on the mainland. 

However, if a company wants to expand its operations to the mainland, it must first obtain initial approval from the relevant free zone authority. After that, the business will need to consult the local Department of Economic Development in the corresponding emirate to meet the licensing requirements.