What is a Dubai free zone company?
A free zone company is a business licensed by one of the UAE’s free zone authorities, not by the mainland DET. You own it 100%, you can trade internationally and with other free zone firms, and the licence comes with UAE residence visas for you and your family.
There are more than 45 free zones in the UAE, over 30 in Dubai alone. Each has its own authority, activity list, visa rules and price. That choice is the main thing this page helps you get right.
The one limit worth knowing early: a free zone company cannot sell physical goods straight into the UAE mainland market. To reach mainland customers you use a local distributor, a mainland branch, or a DET dual-licence permit under Dubai Executive Council Resolution No. 11 of 2025.
Is a Dubai free zone really 0% tax?
Only if you qualify. This is the point most setup pages skip, so read it before you commit. A free zone company sits under UAE corporate tax, and the 0% rate is not automatic.
You get 0% only as a Qualifying Free Zone Person, under Cabinet Decision 100 of 2023. Income that does not qualify is taxed at 9%, the same as anywhere else. To hold the 0% rate you have to meet every condition, all year:
✓ Real substance in the UAE: an actual office, staff and activity, not just a licence.
✓ Qualifying income, mainly from other free zone firms or clients outside the UAE.
✓ The de-minimis test: non-qualifying income stays under the lower of 5% of revenue or AED 5 million.
Break the rules and the cost is heavy. You lose the 0% rate for that year and the next four. Corporate tax registration with the Federal Tax Authority is also mandatory whether you owe tax or not, with a AED 10,000 penalty for registering late.
Done properly, a genuine international business can still run at 0% on its qualifying income. The key word is genuine. We help you structure it so the rate holds up when the FTA looks.
How do you choose the right free zone?
Start with your activity. Your business activity has to be on the zone’s approved list. Some zones are broad, like IFZA and Meydan with over 1,500 activities. Others are narrow, like DIFC, which is finance only.
Then weigh three things: how many visas you need, your budget, and whether you need a real office for QFZP substance. Visa quota is tied to your package, so a bigger team points to a bigger zone.
The table sets out the tiers. When you know yours, open the individual zone page for the full cost and activity list, then talk to us.
Free zone tiers at a glance
Not sure which free zone is right?
Tell us your activity and visa count, and we will shortlist the zones that actually fit.
How much does free zone setup cost?
A free zone setup runs roughly AED 12,500 to AED 35,000 for the first year in a budget or mid-tier zone with one visa. Premium zones like DMCC and DIFC start higher. Renewals from year two are usually cheaper than year one.
What the first-year cost covers
- Trade licence and name reservation with your chosen zone
- Flexi-desk or office, from around AED 5,000 to 12,000 a year
- One investor visa, medical and Emirates ID
- Establishment card, your company immigration file
The costs people forget are the ones after setup: the annual audit if you claim QFZP status, visa renewals every two to three years, and tax filing. We show you the full three-year picture, not just year one. These figures are indicative, so RIZ & MONA Consultancy gives you a personalised quote for your zone, activity and visa count. You can also run your own numbers on our cost calculator.
How do you set up a free zone company from the UK?
Nearly all of it is done remotely, before you travel
The sequence is the part people get wrong. Some tax planning only works before you become a UAE resident, and banking only starts once the company exists. We run the move in this order so nothing blocks the next step.
Step 01 Same day
We confirm your activity and match it to the right zone and licence. This is the decision that shapes cost, visas and your tax position.
Step 02 1 to 2 days
We reserve your trade name and file for initial approval with the zone authority.
Step 03 3 to 7 days
Your trade licence and flexi-desk are issued. Most free zone licences come through inside a week.
Step 04 3 to 5 days
If you are relocating, we arrange your entry permit, medical and Emirates ID. Staying in the UK, we skip this step.
Step 05 2 to 6 weeks
Start to finish, a straightforward free zone setup with a visa and a working account usually takes two to six weeks.
Can a free zone company open a UAE bank account?
Yes. Some zones even have preferred banking partners that speed things up. The account is still earned, though. Banks look hard at substance and at non-resident shareholders, and a weak file gets a quiet no.
How the application works
What free zone mistakes should you avoid?
Most free zone regret comes from a handful of avoidable errors. These are the five we correct for UK clients most often.
Founders assume the licence means tax-free, then an auditor or the FTA shows them the QFZP conditions they never met.
How we handle it: We test your income and substance against the qualifying rules before you set up, so the rate holds.
The lowest package looks smart until the flexi-desk fails the substance test or the activity is not really covered.
How we handle it: We match the zone to your business and your tax position, not to the lowest sticker price.
Each zone approves a set list of activities. Operate outside it and you have a compliance problem and possibly a banking one.
How we handle it: We confirm your activity is approved in the zone before anything is filed.
Some founders plan to sell to UAE customers, then learn a free zone cannot do that directly.
How we handle it: If you need the local market, we tell you upfront and set up the distributor, branch or dual licence you need.
Registration with the FTA is mandatory even at 0%, and late filing carries a fixed penalty.
How we handle it: We register you with the FTA on time and keep your filing on track from day one.
Why choose RIZ & MONA for free zone setup
Since 2009, RIZ & MONA Consultancy has set up more than 10,000 companies for clients from over 50 countries, across every major Dubai free zone. We pick the zone around your business, handle the licence, visas and bank, and tell you the honest answer on tax, including when 0% will not hold.
What UK clients get from us: the right zone first time, a licence issued fast, banking that clears, and QFZP advice that keeps you compliant.
- Every major free zone
- Honest tax advice
- Banking approval
- Post-setup support
Free zone company formation FAQs
The questions UK founders ask us most about free zone setup. Rules change, so treat these as a guide and confirm your own case before you commit.
Is a free zone company automatically tax-free?
No. A free zone company pays 0% only on qualifying income as a Qualifying Free Zone Person, and 9% on the rest. You have to meet the substance and income conditions and keep meeting them. The licence alone does not make you tax-free.
Which is the cheapest Dubai free zone?
Budget zones like Meydan, IFZA and SHAMS start lowest, from roughly AED 12,500 for the year with one visa. The cheapest zone is not always the right one, though. If your activity or visa needs do not fit, a low price costs you more later.
Which free zone should I choose?
Start with your activity, since it must be on the zone’s approved list. Then match the zone to your visa count, budget and whether you need a real office for tax substance. We shortlist the zones that fit and explain the trade-offs.
Can a free zone company sell in the UAE market?
Not directly for physical goods. You reach UAE customers through a local distributor, a mainland branch, or a DET dual-licence permit. If selling into the local market is central to your plan, settle that before you pick a zone.
How many visas can a free zone company get?
It depends on your package. A flexi-desk usually allows one to six visas. Leasing a larger office raises the quota. If you need to sponsor a bigger team, we point you to a zone that scales rather than a fixed small package.
Can I set up a free zone company without visiting Dubai?
Yes. The company, licence and flexi-desk can be arranged remotely from the UK. You only travel if you take a residence visa, for the medical and Emirates ID, usually three to five days. Without a visa, you may not need to go at all.
How long does free zone setup take?
The licence is often issued in three to seven working days. The full setup, including your visa and a working bank account, usually takes two to six weeks. Banking is the slowest step, so we begin it as soon as the licence is ready.
Do I need a physical office for a free zone company?
For the licence, a flexi-desk is usually enough. For the 0% tax rate, you may need real substance, which can mean an actual office and staff. If claiming QFZP status matters to you, we factor the office in from the start.
Start your free zone company today
One call finds your zone, your cost and your next step.
