What a UAE free zone company is
A UAE free zone company is a business licensed by a free zone authority instead of an emirate’s economic department. It operates under that zone’s rules for activities, premises, visas and fees, with up to 100% foreign ownership available in most zones.
| Feature | Typical position |
|---|---|
| Licensed by | A free zone authority (e.g., DMCC, IFZA, RAKEZ, ADGM) |
| Ownership | Up to 100% foreign in most zones; some regulated activities have conditions |
| Where it trades | Within its zone and internationally; direct onshore trading is limited |
| Premises | Desk or office in the zone, or industrial units, depending on licence |
| Tax | Within the UAE corporate-tax regime — see below |
Free zone vs mainland vs offshore
| Route | Best for | Trade in UAE mainland | Notes |
|---|---|---|---|
| Free zone | Zone-specific; international and online work | Limited without extra licence | Often lower cost, desk options |
| Mainland | UAE-wide including government | Yes | Office lease normally required |
| Offshore | Holding or international trading | No | Low cost; cannot operate onshore |
Legal structures
Common forms are a free zone establishment (FZE) for one shareholder, a free zone company (FZ-LLC) for two or more, and a branch of an existing company. Finance centres such as DIFC and ADGM use common-law structures (e.g., private companies limited by shares). Terminology differs by zone.
Benefits and limits
Benefits
- Up to 100% foreign ownership in most zones
- Repatriation of profits and capital
- Digital, fast incorporation in many zones
- Package pricing and flexi-desk options
- Sector ecosystems (media, finance, logistics, tech)
Limits
- Limited direct trading with the UAE mainland
- Activity list set by the zone
- Visa quota tied to package or premises
- Banks assess each company case by case
- Corporate tax still applies
Tax for a free zone company
Free zone companies are within the UAE corporate-tax regime: 0% on taxable income up to AED 375,000 and 9% above it. A Qualifying Free Zone Person can access 0% on qualifying income if strict conditions are met. Registration with the Federal Tax Authority is required for free zone entities. See the corporate tax guide.
What it costs
Published government entry costs range from about AED 5,565 (Ajman Free Zone) to about AED 104,079 (DIFC), reviewed July 2026. Visas, premises, professional fees and renewals are extra. Estimate yours or see the cheapest free zone comparison.
How to set one up
- Pick the zone and activityUse the free zones list and industry pages.
- Reserve the name and submit documentsPassports, photos, proof of address; attested documents for corporate shareholders.
- Pay fees and receive the licenceTiming depends on the zone.
- Establishment card and visasMedical, biometrics and Emirates ID in the UAE. See visa guide.
- Bank account and tax registrationSubject to bank approval. See banking guide.
Who it suits
Consultants, online sellers, holding companies, technology and media businesses, traders and logistics operators that serve international clients or operate within a zone. If most customers are in the UAE, compare the mainland route.
Sources and verification
Reviewed September 2026. Tax points follow Federal Tax Authority guidance (tax.gov.ae). Confirm zone-specific rules with the authority.
UAE free zone company: FAQs
What is a UAE free zone company?
A company licensed by a free zone authority, operating under that zone’s rules, typically with up to 100% foreign ownership and limited direct onshore trading.
Can a free zone company operate in Dubai mainland?
Not freely. A distributor, dual licence where offered, or a mainland licence is usually needed. See free zone vs mainland.
Do free zone companies pay tax?
Yes — within the corporate-tax regime; Qualifying Free Zone Persons can access 0% on qualifying income if conditions are met.
How much does a free zone company cost?
Published entry costs run from about AED 5,565 to about AED 104,079 depending on the zone; extras apply. See the cost guide.
Can I get a residence visa?
Usually yes, subject to quota and eligibility; it is a separate step and never guaranteed. See the visa guide.
Is a free zone company the same as an offshore company?
No. An onshore-capable free zone company can hold a licence, premises and visas; an offshore company (e.g., RAK ICC) is for holding or international trading and cannot operate onshore.
Get a written quote
Tell us your activity and how many visas you need. We reply on WhatsApp or email with government fees shown separately from any service fee.
- Free, no obligation
- Honest advice — including when a different zone or mainland fits better
- No guarantee of visa or bank-account approval; both are subject to the relevant authority or bank
Information on this page is general and was compiled from public sources; fees and rules are set by the relevant authorities and change. Figures were last reviewed in July 2026 and exclude professional-service fees, office rent beyond any bundled desk, external approvals and bank requirements. This is not legal, tax or immigration advice. Always confirm the current position with the relevant authority before paying. See our Disclaimer.