Free Zone Company Formation

The UAE free zones are designated areas where full ownership of companies by foreigners is allowed. Moreover, it is not required to have a UAE national partner or to appoint a local service agent for setting up a company in free zones.

Furthermore, in the UAE free zones bureaucratic requirements are minimized in order to create more pleasant business environment.


There are over thirty free zones in UAE, of which over twenty free zones are based in Dubai. Each free zone offers business licenses and facilities tailored to different sectors of business. Therefore, for setting up a free zone company in UAE, it is highly advisable to consult with a free zone company formation specialist to help you select the right free zone and business license based on your business goals.


Some of the most popular free zones in UAE are Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), Dubai International Financial Center (DIFC), Dubai Multi Commodities Center (DMCC/JLT), Dubai South (also known as Dubai World Central (DWC)), Dubai Silicon Oasis (DSO), Dubai Internet City (DIC), Abu Dhabi Global Market (ADGM), Ras Al Khaimah Economic Zone (RAKEZ), Umm Al Quwain Free Trade Zone (UAQ FTZ), International Free Zone (IFZA) and others.


Free Zone Company Types:

Here are the general company structures in free zones:

    • Free Zone Establishment (FZE): companies with one shareholder can be registered as an FZE.
    • Free Zone Company (FZC or FZ-LLC): when there are more than one shareholder, this is called FZC or FZ-LLC.
    • Branch: both local and foreign companies in the UAE can register their branches in UAE free zones.


Nevertheless, company legal forms may be called differently in some free zones. Moreover, certain Free Zones such as Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM) have regulations that allow other types of legal entities to setup in these free zones.


The free zones allow the investors to either register a new company in the form of a Free Zone Establishment (FZE) or Free Zone Limited Liability Company (FZ-LLC) or establish a branch or representative office of an existing company based within the UAE or abroad. The FZE stands for an entity that is owned by one individual. Liability of an FZE is limited. The FZ-LLC can be formed by minimum two (2) and maximum five (5) shareholders who can be either individuals or corporate bodies. Although, some Free Zones allow to setup an FZ-LLC with one shareholder.


Freelance licenses are also issued in certain free zones such as Dubai Media City. Freelance permit is a cost-effective solution for individuals who can do business in Dubai as a freelancer under his/her personal name.


Free Zone License Types:

While each free zone has its own classification of licences, the majority of free zones have the following business license categories:

    • Trading license: This allows trading, import, export and re-export of specific products.
    • E-commerce license: This allows companies to do business through online platforms.
    • Service license: This allows companies to provide specific services or consultancies within the free zone.
    • Industrial license: This is issued for manufacturing activities.
    • General trading license: This allows trading, import, export and re-export of almost all types of products, with the exception of a few product types.


Key Benefits of Free Zone Company Formation:

Followings are the major benefits and incentives that the free zones in UAE offer:

    • 100 per cent foreign ownership
    • No customs duty for import and export
    • No personal income taxes
    • No corporate taxes
    • Some free zones are categorised as Designated Zones under the UAE VAT laws, where businesses enjoy certain VAT exemptions
    • Cost-effective business set-up
    • No requirement to have a local partner or agent
    • Ready office, warehouses and manufacturing facilities
    • Shareholders, directors and employees can get UAE residency


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