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Doing business in Dubai freezone: Everything you need to know

There are several key decisions to make when starting out in Dubai. You’ll need to choose a company name, a suitable location, license type, and the best legal entity for your business.

When it comes to the latter, you’ll face two basic choices – mainland and free zone. While both setup types allow you to trade in the UAE and beyond, they do have some distinct differences.

Mainland companies are registered in any area of the UAE outside its many economic free zones. Mainland companies – also known as onshore companies — are governed by the relevant local authority. In Dubai, this is the Department of Economic Development (DED).

Free zone companies, on the other hand, are incorporated within UAE economic free zones. Free zones – also known as free trade zones – are designated facilities and areas within the UAE that allow for fast, affordable company formation and ease of trading.

In most cases, setting up in a free zone is the easiest and most cost-effective way to start a business in Dubai and the wider UAE. Keep reading to find out why.

Advantages of doing business in a Dubai Free Zone

Free zone companies have many advantages not offered to those in the mainland. These benefits include 100% foreign ownership without additional permissions, 100% customs tax exemption, zero currency restrictions and the freedom to repatriate capital and profits.

As many free zones are tailored to specific industries and professions, free zone companies can also benefit from incredible networking opportunities, as well as mentorship and venture capital possibilities.

Most free zones also offer onsite office and coworking facilities, along with virtual and flexi-desk licensing options.

A standard free zone company can only trade from within its zone. However, they are permitted to trade with the local market via a branch company, distributor or local service agent.

How much does it cost to open a free zone company in Dubai?

Free zone licensing packages in Dubai usually start at around AED 30,000. This is often inclusive of eligibility for one visa as well as use of coworking facilities.

More affordable options can be found outside of Dubai, in emirates such as Sharjah and Fujairah. Licensing packages at Fujairah Creative Zone, for example, start at AED 24,775. This includes the cost of one visa as well as the use of coworking space and business support services.

What are the steps to start a business in a Dubai free zone?

The first step when starting a business in the UAE is to call the expert team at Business Incorporation Zone (BIZ). After a short consultation to understand your requirements, we’ll manage the entire application process on your behalf.

Your dedicated account manager will guide you through the following steps.

1. Business activities

First things first, we’ll help you align your business activity or activities to the approved list published by the DED. There are thousands to choose from.

You are only permitted to carry out the activities listed on your license. However, you can list multiple activities and add more at a later date.

2. Your company name
Choosing a company name is a hugely important step in establishing a UAE business. There are a few things to keep in mind when making this decision. You must abide by a strict, yet easy to follow, set of naming conventions. Once again, a company setup expert can help you with this step.

In short, you should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e. Dave Mann Consulting, rather than D Mann Consulting. You must also check that your chosen name is available to register.

3. License application

Next, we’ll manage your license application, liaising with free zone authorities and other relevant bodies.

Free zone licenses can be granted in a matter of days depending on the nature of your business. We’ll make your application to your chosen free zone. At this stage, you’ll need to submit a few details and some basic documentation, including:

  • Completed application form
  • Passport copy of the proposed owner or owners
  • Two colour passport size photos.

 

4. Making your visa applications
You will also need a residency visa to work in the UAE. The visa application process consists of several steps including biometric scanning, a blood test, medical and a chest x-ray.

As the holder of UAE trade license, you can also sponsor others for their visas too. This could be a spouse, parent or child, or a domestic worker such as a housekeeper.

Why work with BIZ?

Hopefully, this guide has made clear that if you’re armed with the right knowledge, business setup in Dubai doesn’t have to be overly complex.

That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors.

To help you ensure that this is the case, it’s a good idea to work with a company formation specialist such as BIZ when establishing a new company in the UAE.

We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.

As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.

We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visa applications that are required to trade in the UAE.

In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.

Contact us for more information

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