The UAE has become one of the world’s most attractive destinations for business and investment. Its Free Zones offer 100% foreign ownership, tax exemptions, and streamlined business setup processes. As of 2025, there are over 67 Free Zones in the UAE, each catering to industries such as technology, finance, e-commerce, and manufacturing.
Key Benefits of Free Zone Company Setup:
• 100% foreign ownership with no local sponsor required.
• Zero personal income tax and potential corporate tax exemptions.
• Full repatriation of profits and capital.
• No import/export duties within the Free Zone.
• Strategic locations near global trade hubs.
• Fast business registration and licensing process.
In this guide, we’ll explore the top Free Zones, setup process, costs, and common challenges for businesses in 2025.
What is a Free Zone Company?
A Free Zone company is a business entity registered within a designated economic area that operates under special regulations. These companies benefit from tax incentives, ownership flexibility, and easier business regulations.
A Free Zone company differs from Mainland and Offshore companies in several ways:
• Free Zone companies offer 100% foreign ownership, unlike some Mainland companies that require local sponsors.
• They are subject to a 9% corporate tax if annual revenue exceeds AED 375,000, while Offshore companies enjoy a 0% corporate tax rate.
• Free Zone companies can only trade internationally or within the Free Zone, whereas Mainland companies have full market access in the UAE. Offshore companies cannot operate within the UAE at all.
• Free Zone companies require a Flexi-desk or office, whereas Mainland companies need a physical office, and Offshore companies have no such requirement.
Best Free Zones for Business Setup in UAE (2025)
• Ajman Free Zone (AFZ): Ideal for SMEs, e-commerce businesses, and traders. Setup cost ranges from AED 5,000 to AED 15,000.
• Ras Al Khaimah Economic Zone (RAKEZ): Best suited for industrial, manufacturing, and trading businesses. Setup costs range from AED 11,000 to AED 20,000.
• Dubai Multi Commodities Centre (DMCC): A top choice for crypto, finance, and commodities trading. Setup costs range between AED 25,000 and AED 40,000.
• Sharjah Publishing City (SPC): Designed for publishing and content creation businesses. Setup costs start at AED 8,500 to AED 15,000.
• Sharjah Media City (SHAMS): Ideal for media, marketing, and freelancers. Setup costs range between AED 5,750 and AED 12,000.
• RAK Digital Assets Oasis (RAKDAO): Focused on crypto, blockchain, and AI startups. Setup costs range from AED 20,000 to AED 35,000.
Step-by-Step Guide to Setting Up a Free Zone Business
1. Choose the Right Free Zone – Select a Free Zone based on your industry and budget.
2. Select Business Structure – Opt for a Free Zone Establishment (FZE) if you are a single owner or a Free Zone Company (FZCO) if there are multiple shareholders.
3. Register Trade Name & Apply for License – Ensure that your trade name meets UAE regulations and apply for a business license.
4. Choose Office Space – Decide between a Flexi-desk, private office, or warehouse based on business needs.
5. Submit Documents & Pay Fees – Provide the required paperwork, including passport copies and business plans, and pay the necessary fees.
6. Open a Corporate Bank Account – Select a bank that supports Free Zone businesses.
7. Apply for Visas & Work Permits – Obtain residency visas for business owners and employees.
8. Ensure Compliance & Renew Licenses – Stay compliant with UAE business laws and renew your license on time.
Common Challenges & How to Overcome Them
• Trading Restrictions with Mainland UAE: Overcome by obtaining a dual license or partnering with a local distributor.
• Banking Difficulties: Work with Free Zone-friendly banks such as Emirates NBD or ADIB.
• Visa Limitations: Upgrade to a larger office to increase visa quotas.
• Choosing the Right Free Zone: Compare costs, benefits, and industry focus to make an informed decision.
• Regulatory Changes: Stay updated with Free Zone authority announcements to ensure compliance.
Free Zone vs. Mainland: Cost Comparison
• The cost of setting up a Free Zone company ranges from AED 5,000 to AED 25,000 for a business license, while a Mainland company license costs between AED 15,000 and AED 50,000.
• Visa costs per employee in a Free Zone range from AED 3,000 to AED 5,000, whereas Mainland visas cost between AED 5,000 and AED 7,000.
• Free Zone companies benefit from either 0% or 9% corporate tax, depending on revenue, while Mainland companies are subject to a 9% corporate tax.
Final Recommendations & Next Steps
• A Free Zone setup is ideal for startups, small businesses, e-commerce sellers, freelancers, and international traders who want tax benefits and easy business setup.
• Crypto and fintech businesses benefit from Free Zone flexibility, especially in DMCC and RAKDAO.
• A Mainland setup is recommended for companies targeting the UAE local market, businesses requiring government contracts, and those needing unlimited visas.
How to Get Started
• Choose a Free Zone that aligns with your industry.
• Register your company and obtain a license.
• Open a UAE corporate bank account.
• Apply for visas and start operations.
