Dubai Free Zones: Benefits, Setup Process, Costs, and Guide for Expats

Dubai’s Free Zones have become one of the biggest attractions for entrepreneurs and investors, offering a simple and tax-efficient way for expatriates to establish businesses with 100% foreign ownership. With the introduction of the Dedicated Free Zone Passport, companies can now operate across multiple Free Zones using a single permit, adding more flexibility for startups and SMEs. This guide explains what Free Zones are, how to choose the right one, the setup process, costs, timelines, and everything expats need to know before starting a business in Dubai.

What Are Dubai Free Zones?
A Free Zone is a designated economic area where foreign investors can fully own and manage their businesses without requiring a local UAE partner. Each Free Zone is managed by its own authority and has specific rules regarding licensing, permitted activities, office space, and visa allocation.

Some of the major Free Zones in Dubai include:
• Dubai Multi Commodities Centre (DMCC)
• Dubai Internet City (DIC)
• Dubai Media City (DMC)
• Dubai Silicon Oasis (DSO)
• Dubai International Financial Centre (DIFC)
• Dubai South

Why Free Zones Are Popular
• Complete foreign ownership
• Zero personal income tax and 0% corporate tax (9% corporate tax applies only on profits above AED 375,000)
• Full repatriation of capital and profits
• No customs duties within the Free Zone
• Fast and fully online company setup
• Access to modern infrastructure including coworking spaces, offices, and warehouses

Free Zones are especially suitable for freelancers, startups, e-commerce companies, consulting firms, and international businesses that do not require mainland trading.

Choosing the Right Free Zone
Selecting the right Free Zone depends on your industry, budget, and visa needs. Examples include:
• DMCC for commodities, gold trade, crypto, and fintech
• DIC for IT, app development, and technology services
• DMC for media, advertising, and content creation
• Dubai South for logistics, aviation, and cargo operations

Types of licences available:
• Commercial licence for trading and import/export
• Professional or service licence for consulting and service-based activities
• Industrial licence for manufacturing and production
• E-commerce licence for online business
• Educational licence for training institutes and academies

Some zones also allow dual licences that combine trading and service activities.

Legal Structures Available
• Free Zone Establishment (FZE) – One shareholder
• Free Zone Company (FZC/FZ-LLC) – Two or more shareholders
• Branch office – Extension of an existing foreign or UAE-based company

Trade names must follow specific naming guidelines enforced by each Free Zone authority.

Dedicated Free Zone Passport
Dubai now offers a Dedicated Free Zone Passport for greater operational flexibility.
Key features include:
• One permit valid for multiple Free Zones
• Faster approval processes
• Ideal for startups expanding operations
• Available to companies already registered in a Free Zone

Step-by-Step Business Setup Process

1. Identify the business activity – Choose from the approved activity list.
2. Select the Free Zone and legal structure – Based on industry and visa requirements.
3. Reserve the trade name – Submit the preferred name for approval.
4. Apply for initial approval – Obtain the first-level clearance.
5. Submit documents – Including passport copies, photos, business plan, proof of address, NOC (if applicable), and corporate documents for multi-shareholders.
6. Choose office space – Flexi-desk, serviced office, or warehouse options.
7. Pay fees – Varies based on licence type and visa quota.
8. Receive licence and incorporation documents – Trade licence, MoA, incorporation certificate, lease agreement, and establishment card.
9. Apply for visas – Medical test, Emirates ID process, and visa stamping for shareholders and employees.

The setup typically takes between two to four weeks, depending on document readiness.

Costs and Timelines
Business setup prices in 2025 vary by Free Zone and package:
• Zero-visa packages: AED 12,000 to AED 25,000
• Single-visa packages: AED 20,000 to AED 35,000
• Multi-visa or office-based packages: Starting from AED 40,000

Some zones also offer limited-time discounts or lifetime visa promotions. Annual renewals are required.

After Company Setup
• Open a corporate bank account
• Apply for residence visas
• Register for VAT if turnover exceeds AED 375,000
• Renew licences and maintain annual compliance