Free zone

A designated economic area with its own licensing authority, offering 100% foreign ownership, customs suspension on goods that do not enter the domestic market, and in most cases a potential 0% corporate tax position on qualifying income. The trade-off is that a free zone company cannot sell directly into the UAE domestic market.

Where it comes up

Free zones are how most foreign founders enter the UAE. There are more than forty across the seven emirates, each with its own authority, activity list, fee schedule and visa allocation, and they differ far more than the marketing suggests.

What it costs

A licence with one visa commonly falls in the AED 12,500–25,000 range for the first year, with a realistic all-in total of AED 18,000–35,000 once visa, desk and insurance are included.

Who it applies to

Anyone whose customers are outside the UAE. If your customers are inside it, a free zone fences you out of your own market.

How it actually goes

1. Choose the authorityForty of them, and they differ on cost, credibility, activity list and how banks receive them. This decision is harder to reverse than any other in the process.
2. Reserve the nameChecked against the zone's register and the naming rules before anything else moves.
3. Submit the applicationPassports, photographs, proof of address, and for regulated activities a business plan and CVs.
4. Take premisesA flexi-desk in the cheapest packages, a physical office where quota or credibility requires it. The lease drives the visa allocation.
5. Licence, then immigrationThe licence issues, the establishment card follows, quota is assigned, and residence visas can begin.

A free zone licence does not permit trading onshore in the UAE without a mainland distributor, a branch, or a dual-licence arrangement where the zone offers one. Companies discover this after signing their first local customer.

In short

• Licensed by the zone's own authority, not the emirate's economic department
• Over forty of them across the seven emirates
• Cannot sell directly to UAE mainland customers

Where this leads

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