Dubai Free Zone Company Setup: Benefits, Costs & Top Free Zones 2026
Free zones are the backbone of Dubai's appeal to foreign entrepreneurs. These designated economic areas offer a combination of benefits that no mainland jurisdiction can match: 100% foreign ownership, complete profit repatriation, exemption from import and export duties, and visa sponsorship for business owners and their families. The UAE has over 45 active free zones, with 30+ in Dubai alone, each tailored to specific industries and business models. In 2026, setting up a free zone company is faster and more affordable than ever, with all-inclusive packages starting from AED 5,750. This guide covers what a free zone company is, why you should consider one, how costs compare across the top five zones, and the step-by-step formation process.
Benefits of a Free Zone Company
Free zones were created by the UAE government to attract foreign direct investment. They operate as independent jurisdictions within the country, each governed by its own authority. Here are the core benefits:
- 100% Foreign Ownership — No local sponsor or partner required. You retain complete control of your business.
- 0% Personal Income Tax — The UAE does not levy personal income tax. Corporate tax at 9% applies only to profits above AED 375,000, and qualifying free zone income is exempt.
- Full Profit Repatriation — Transfer 100% of your profits out of the UAE without restriction. No capital controls, no withholding tax.
- Customs Duty Exemption — Goods imported into and exported from free zones are exempt from UAE customs duties (normally 5%).
- Residence Visa Allocation — Every free zone company receives visa allocations (typically 1 to 6 with a flexi-desk, more with office space), allowing you to live and work in the UAE.
- Simplified Compliance — Free zones handle much of the regulatory burden. Annual compliance typically involves only license renewal and an annual audit (for some zones).
Top 5 Free Zones Compared (2026)
| Free Zone | Location | Starting Price | Visa Included | Best For |
|---|---|---|---|---|
| SHAMS | Sharjah | AED 5,750 | Add-on (~AED 3,500) | Freelancers, media, budget startups |
| RAKEZ | Ras Al Khaimah | AED 8,500 | 1 visa included | Trading, industrial, manufacturing |
| IFZA | Dubai | AED 12,000 | 1 visa included | Consulting, services, e-commerce |
| Meydan | Dubai | AED 9,500 | 1 visa included | Startups, tech companies |
| DMCC | Dubai (JLT) | AED 25,000 | 1 visa included | Commodities, crypto, premium brands |
How to Choose the Right Free Zone
With over 30 options in Dubai alone, selecting the right free zone can feel overwhelming. Here are the five factors that matter most:
- Business Activity — Not all zones support all activities. Media businesses gravitate to Dubai Media City or SHAMS. Commodities traders choose DMCC. Tech companies favour Dubai Silicon Oasis or Dubai Internet City. General consulting and services are available in almost every zone.
- Budget — First-year costs vary from AED 5,750 (SHAMS) to AED 50,000+ (DIFC). Factor in renewal costs, which are typically 70-90% of initial fees, since this is a recurring annual expense.
- Visa Needs — If you need multiple visas for staff or partners, ensure your chosen zone and package includes sufficient visa allocation. Some flexi-desk packages include only one visa.
- Banking — Some zones have better banking facilitation than others. DMCC and IFZA have dedicated banking desks that help with account opening. Companies registered in less established zones may face longer processing times.
- Reputation and Prestige — If your clients are enterprise or institutional, a DMCC or DIFC license carries more weight than a SHAMS license. For digital businesses and freelancers, the distinction is less important.
Not sure which zone fits your needs? Maya AI's AI-powered recommendation engine compares 22+ zones across cost, banking, reputation, visa, and timeline dimensions in under two minutes.
Free Zone Company Setup Process
The registration process is consistent across most free zones, with minor variations:
- Select activities and package — Choose your business activities and the package tier that matches your visa and office needs.
- Reserve your company name — Submit your preferred names for approval. Most zones respond within 24 hours.
- Submit documents — Upload passport copies, photos, proof of address, and a business plan through the zone's digital portal.
- Pay and receive your license — Once approved, pay the license fees and receive your trade license, MOA, and establishment card within 2 to 5 days.
- Process your visa — Apply for entry permit, complete medical and biometrics, and receive your residence visa within 2 to 3 weeks.
For a detailed walkthrough of the full business setup journey including the post-license steps, see our complete Dubai business setup guide. For details on legal structures, read our company formation guide. If you are weighing whether a free zone is right for you, our free zone vs mainland comparison breaks down the trade-offs.
Frequently Asked Questions
What is a free zone company in Dubai?
A free zone company is a business entity registered within a designated economic zone in the UAE. Free zones are independent jurisdictions with their own licensing authorities, offering benefits like 100% foreign ownership, full profit repatriation, customs duty exemption, and streamlined visa processing. Dubai alone has over 30 free zones, each specialising in different industries.
Which is the cheapest free zone in Dubai?
For a Dubai-based license, Meydan Free Zone (from AED 9,500) and IFZA (from AED 12,000) offer the most competitive packages. If you include wider UAE options, SHAMS in Sharjah starts from AED 5,750 and Ajman Free Zone from AED 6,500. RAKEZ in Ras Al Khaimah offers packages from AED 8,500.
Can a free zone company trade on the mainland?
Traditionally, free zone companies were restricted from directly selling to mainland UAE consumers. However, rules have relaxed significantly. Free zone companies can now sell to mainland businesses (B2B) without restriction, sell online to UAE consumers via e-commerce, and obtain dual licenses (available at DMCC, DAFZA, and others) that allow both free zone and mainland activity.
How many visas can I get with a free zone company?
Visa allocation depends on the free zone and your office space. Flexi-desk packages typically include 1-3 visa allocations. Dedicated office leases can provide 6-20+ visas depending on the office size (generally 1 visa per 9 sqm of office space). IFZA and DMCC offer scalable visa packages.
Do free zone companies pay tax in the UAE?
Since June 2023, the UAE applies a 9% corporate tax on profits exceeding AED 375,000. However, free zone companies with "qualifying income" (income from transactions with other free zone entities or income from outside the UAE) can maintain a 0% tax rate. Most service-based and international-facing businesses qualify for this exemption.