UAE Free Zone Company Formation

Setting up a free zone company in the UAE has become one of the most strategic and cost-effective ways for foreign investors and entrepreneurs to enter the Middle East market. 

The UAE offers two distinct models for business setup: mainland companies and free zone entities. 

However, the free zones companies offer exceptional benefits such as 100% foreign ownership, 0% corporate tax, and full capital repatriation that are increasingly attracting international businesses in 2025.

There are nearly 50 active free zones across all seven emirates, each tailored to different industries—ranging from fintech, logistics, and media to e-commerce, manufacturing, and consultancy. Each zone operates under its own regulatory framework and licensing authority, offering bespoke incentives and sector-focused infrastructure.

In this guide, we’ll show you how to set up a free zone company in the UAE step-by-step. You’ll learn the benefits of UAE free zones, see a breakdown of top zones by emirate, and compare licences, setup costs, and timelines. 

But navigating the UAE company formation process—especially across dozens of free zones with varied rules, licence types, and fees—can be complex without the right support. That’s where Binderr Marketplace comes in.

Binderr Marketplace is the fastest and most seamless way to set up a free zone company in the UAE. 

Whether you’re an entrepreneur, startup founder, or multinational expanding into the region, Binderr helps you connect with top-tier company formation agents, legal consultants, accounting firms, banks, EMIs, and other corporate service providers—all in one digital platform.

Here’s how Binderr transforms your business setup experience:

• Find and Compare Top Services
• Complete Applications Online
• Track Your Setup Progress in Real-Time
• Get Ongoing Business Support

Whether you’re launching a startup or scaling globally, Binderr makes UAE company formation faster, simpler, and smarter.

What Is a UAE Free Zone Company?

A UAE free zone company is formed within one of the UAE’s many free economic zones, also called free trade zones or simply free zones. These zones are geographically defined areas where businesses benefit from liberal regulatory frameworks, streamlined administration, and commercial incentives not typically available to mainland companies.

Free zone companies are governed by their respective free zone authorities, not the UAE mainland’s Department of Economic Development (DED), and they are usually prohibited from directly trading within the UAE mainland unless they work through a licensed local distributor or open a mainland branch.

Benefits of Setting Up a Free Zone Company in the UAE

UAE free zones were established starting in the 1980s to attract foreign investment. They offer a host of benefits that make them highly attractive for company formation:

• 100% Foreign Ownership: Unlike the traditional requirement (pre-2018) for a local 51% shareholder, free zones allow full foreign company ownership without the need for a UAE national partner or sponsor.
• 0% corporate and personal income tax: Most free zones offer full tax exemptions on corporate and personal income for a set period (often 15–50 years, renewable).
• Repatriation of Capital and Profits: Free zone companies can repatriate 100% of their profits and capital without restrictions, ensuring investors can freely move earnings abroad.
• Fast Company Formation: Registration can be completed within 1–7 working days, depending on the free zone. Many zones have fast-track licensing and visa processing, and minimal bureaucracy. In some zones, licences can be issued in days.
• Visa Sponsorship: Free zone companies can sponsor visas for owners, employees, and family members.
• No Import/Export Duties: Goods imported into free zones are exempt from customs duties (unless they enter the UAE mainland). Free zones are also strategically located near ports or airports, facilitating easy international trade and logistics.
• Modern Infrastructure and Support: Ready-made offices, flexi-desks, warehouses, and tech parks are available. Free zone authorities often assist with visas, banking, networking, and other investor support services.

In summary, UAE free zones offer a highly investor-friendly environment – combining regulatory ease, financial incentives, and world-class facilities – which makes establishing a company in a free zone a confident choice for international entrepreneurs.

How to Set Up a Free Zone Company in UAE: Step-by-Step

Setting up a free zone company in UAE is a straightforward process compared to many other jurisdictions. While each free zone authority may have its own specific procedures, the general steps are very similar and streamlined. 

Here is an overview of the typical steps to establish a company in a UAE free zone:

Step 1: Choose the Right Free Zone and Business Activity

Your first decision when starting the free zone company formation in UAE is selecting the most suitable free zone jurisdiction and confirming that it supports your intended activity. Choosing the correct zone ensures you’re legally aligned and eligible for the correct business licence

• The UAE offers over 40 free zones, each with its own industry focus (full breakdown below). The UAE collectively offers more than 2,000 licensable activities.
• Consider location (proximity to ports or airports), infrastructure (flexi-desks, warehouses, offices), reputation, and sector alignment.

Example: A fintech startup may opt for ADGM in Abu Dhabi, while an e-commerce firm might prefer IFZA in Dubai.

Step 2: Select the Legal Structure and Licence Type

Once your free zone is selected, determine your company's legal form and the appropriate licence type for your operations.

Common free zone legal structures include:

• Free Zone Establishment (FZE) – For a single shareholder.
• Free Zone Company (FZC/FZ-LLC) – For multiple shareholders.
• Branch Office – Of an existing UAE or foreign company.

Licence types vary by zone but typically include:

• Commercial or Trading Licence – For import/export, general trade.
• Service/Consultancy Licence – For professionals (e.g., legal, marketing, finance).
• Industrial Licence – For manufacturing or assembly.
• Media Licence – For media, publishing, and content creation.
• E-commerce Licence – For online retail businesses.
• Freelance Licence – For solo entrepreneurs and digital workers.
• Educational Licence – For training institutes or academic services.

Choosing the right licence ensures your business operates legally under UAE free zone laws.

Step 3: Reserve and Register Your Company Name

The next step in your UAE free zone company setup is selecting and securing a compliant trade name. Many free zones offer online name availability checks. The name should ideally reflect your business activity or brand identity.

Your proposed name must follow UAE naming rules:

• No religious or offensive language.
• No references to political organisations.
• No duplicates or conflicting names.

Once approved, your trade name will be reserved, and you’ll receive a name reservation certificate.

Step 4: Prepare and Submit Incorporation Documents

The next stage in free zone company formation in UAE is completing your application and preparing all supporting documents. This usually includes:

• Application form provided by the free zone authority
• Passport copies of all shareholders and directors
• A recent passport-sized photograph of each shareholder
• A brief business plan or overview of your proposed activities (if requested)

If any shareholder is a corporate entity, you’ll also need:

• The company’s Certificate of Incorporation
• Memorandum and Articles of Association
• Board Resolution authorising the new entity

Many UAE free zones accept digital submissions, allowing you to upload all paperwork online and avoid physical visits.

Note: If your business activity falls under a regulated category—such as education, healthcare, or financial services—you may also need NOCs or clearance from relevant UAE ministries. For most general trading or consultancy activities, approval from the free zone authority alone is sufficient.

Step 5: Obtain Initial Approval from the Free Zone Authority

Once your documents have been submitted, the free zone authority will review your application and issue an initial approval. This stage confirms that your business activity, structure, and documentation meet the requirements for company setup.

Some authorities may also provide a formal approval letter, which is useful for opening a UAE corporate bank account and depositing any required share capital.

Key points to keep in mind:

• Most free zones do not mandate paid-up capital. In Ajman or Umm Al Quwain, for instance, share capital can be as low as AED 1 and may not need to be deposited.
• Some zones, like DMCC, require capital to be deposited. DMCC mandates a minimum of AED 50,000 for an FZ-LLC, and proof of this must be provided.

This step is critical for moving forward with leasing premises and receiving your final trade licence.

Step 6: Sign Legal Documents and Secure a Business Premises

After obtaining initial approval, you’ll need to complete two final administrative steps:

Sign Incorporation Documents: You’ll formally sign your company’s Memorandum and Articles of Association, shareholder agreements, and other incorporation paperwork, either at the free zone’s office or via secure digital platforms.

Lease an Office or Workspace within the Free Zone: UAE free zones require companies to have a physical address within their jurisdiction. Depending on your business type and visa requirements, you may choose from:

• Flexi-desks (shared workspaces)
• Private offices
• Warehouses or industrial units
• Land plots for development

Once you’ve selected your space, you’ll sign a lease agreement and pay the rental fee—completing this step in your UAE company formation process.

Note: Many free zones allow for virtual or minimal office setups, especially for service, consultancy, and digital businesses—keeping costs low while maintaining legal compliance.

Step 7: Make Payment and Finalise Registration

Once your legal documents and lease agreement are in place, the next step is to complete the financial formalities. You’ll need to pay all applicable fees to the free zone authority to proceed with registration. These typically include:

• The business licence fee
• Company registration charges
• Office or Flexi-desk rental fee for the first year
• Visa quota fees, if applicable
• Any additional service or administrative charges

If your selected free zone requires proof of paid-up share capital, such as DMCC, you must submit evidence of the bank deposit at this stage. Once all payments are confirmed, the authority will process your application and move to issue your company’s legal documents.

Step 8: Receive Licence and Company Documents

Following payment and internal verification, the free zone authority will issue the official company documents, confirming your UAE company formation is complete. These typically include:

• Business licence
• Certificate of Incorporation
• Share certificates
• Memorandum and Articles of Association
• Establishment card (also known as the company immigration card)

The establishment card is particularly important—it enables your company to sponsor residence visas for shareholders, employees, and dependents.

From this point forward, your free zone company in UAE is legally registered and authorised to begin operations within its permitted scope.

Step 9: Apply for Residence Visas

With your business licence and establishment card issued, you can proceed to apply for UAE residence visas for the company’s stakeholders and staff. Visa allocation is based on your selected free zone package and the size/type of your leased premises:

• A Flexi-desk may allow 1–6 visas
• Larger offices or warehouses can support more employees

The visa application process includes:

• Entry permit issuance
• In-country status change (if the applicant is already in the UAE)
• Medical fitness test
• Emirates ID registration
• Residence visa stamping in the passport

Open a UAE Business Bank Account

Once visas are underway or finalised, your next step is to open a corporate bank account in the UAE. Free zone companies are generally well-accepted by both local and international banks, though each institution will conduct its own due diligence (KYC) process. Documents usually required include:

• Business licence and incorporation documents
• Shareholder and director identification
• Proof of office lease
• Company structure chart and activity details

Once your account is active, your free zone company is fully equipped to transact internationally and scale confidently within the UAE and beyond.

Read More: How to Open a Business Bank Account in the UAE

Comparison of Key UAE Free Zones (By Emirate)

Note: The above costs are approximate starting setup fees for a basic free zone company package (often including a flexi-desk office and a few visas). 

Actual costs vary depending on business activity, number of visas required, and chosen facilities. For instance, SHAMS packages start around AED 5,750, IFZA (Dubai) from about AED 12,900, and high-end zones like DMCC around AED 30,000 for a simple setup. 

Large industrial setups or special licenses (e.g. logistics parks, large warehouses) in zones like JAFZA can be AED 50,000 or more in initial fees. Always check with the specific free zone for the most current pricing, as promotional packages are common.

UAE Free Zone Company Setup Costs

One of the biggest advantages of free zone company formation in UAE is cost flexibility. Depending on the zone and package selected, setup costs can range from as low as AED 5,000 to AED 50,000+.

The most affordable zones, such as Sharjah Publishing City (SPC), offer entry-level packages starting from around AED 5,750 (~USD 1,570), which usually include the first-year licence fee, registration, and a Flexi-desk lease.

At the higher end, zones like JAFZA or ADGM may require tens of thousands of dirhams upfront—especially for general trading or financial licences, or if larger office spaces or warehouses are involved.

Key cost drivers include:

• Licence type: General trading and specialised licences cost more than basic service or consultancy licences.
• Visa allocation: More visas mean larger office space and higher fees.
• Facility upgrades: Choosing private offices, warehouses, or industrial units adds to the base package cost.

Despite the range, free zone company setup is still considered cost-effective compared to many global jurisdictions—especially given the 0% corporate tax, 100% profit repatriation, and streamlined setup.

Timelines for UAE Free Zone Company Formation

Free zone business setup in the UAE is remarkably fast. Many authorities have digitised their workflows, allowing entrepreneurs to get licensed within days—particularly in straightforward cases.

• Fastest zones: Ajman and Sharjah free zones have issued company licences in as little as 1–3 working days.
• Standard timelines: Most free zones average 1 to 3 weeks from application to licence issuance, including visa processing.
• Extended cases: Activities requiring regulatory oversight (e.g. finance or crypto) may extend timelines to 3–4 weeks or more, especially in zones like ADGM or DMCC Crypto Centre.

Overall, the UAE’s free zone ecosystem offers faster incorporation timelines than most international jurisdictions, allowing businesses to become operational in under two weeks in many cases.

UAE Corporate Tax Considerations for Free Zone Companies

A major regulatory shift occurred in 2023 with the introduction of a 9% federal corporate tax on UAE business profits. However, free zone companies remain tax-exempt on qualifying income—making them highly attractive for international operations.

To qualify for the 0% tax status, free zone businesses must:

• Earn revenue only within the free zone network or from international markets.
• Avoid direct trade with the UAE mainland, unless properly structured under the FTA’s corporate tax rules.

If a free zone company does engage with the UAE mainland, profits from those activities may be taxed at 9%, while income from free zone or foreign clients remains tax-free. The key to compliance is understanding what qualifies as tax-exempt income under the new law.

Bottom Line

In conclusion, UAE free zone company formation in 2025 remains one of the most efficient and strategic routes for foreign investors and entrepreneurs. With 100% foreign ownership, zero corporate tax on qualifying income, and access to world-class infrastructure, the UAE offers an unmatched environment for launching and scaling international businesses.

But navigating over 40 free zones, varying regulations, and banking requirements can be time-consuming without the right support.

That’s where Binderr Marketplace comes in.

Binderr simplifies the entire process, from selecting the right free zone to preparing legal documents, leasing office space, securing licences, and opening UAE bank accounts.

With Binderr, you can compare vetted service providers, submit your application online, and track progress in real time - all from a single platform.

Start smarter. Scale faster. Set up your UAE free zone company with Binderr.