Every year, tens of thousands of entrepreneurs set up companies in UAE free zones. In 2025 alone, the Ministry of Economy recorded over 68,000 new commercial licenses issued across free zones - a 14% jump from the year before (Ministry of Economy, 2025). The appeal is clear: 100% foreign ownership, profit repatriation, and the possibility of 0% corporate tax for qualifying businesses. But the actual cost of getting set up catches people off guard.
TL;DR: A UAE free zone company costs AED 12,000 to AED 25,000 in year one, covering your trade license, registration, a basic office, and one visa. The process takes one to three weeks from application to license. The biggest variables are which free zone you pick, how many visas you need, and whether you want a physical office or a flexi-desk.
How Much Does a Free Zone License Actually Cost?
It depends on the free zone. Each authority sets its own pricing, and the spread is wide. Here is what three of the most popular zones charge for a standard commercial license in 2026:
DMCC (Dubai Multi Commodities Centre) charges AED 18,500 to AED 50,000 for a standard FZ-LLC setup, with annual renewal from AED 18,500 (DMCC, 2026). DMCC is the largest free zone in the UAE with over 24,000 registered companies (DMCC, 2025).
JAFZA (Jebel Ali Free Zone) starts from around AED 15,000 to AED 40,000 for setup, making it a strong option for logistics and industrial businesses (JAFZA, 2026).
IFZA (International Free Zone Authority) offers packages from AED 10,000 to AED 30,000 depending on the license type and services included (IFZA, 2026). IFZA has become popular with service-based businesses and solo founders looking for a lower entry point.
In our experience, the license fee itself is rarely the full picture. Registration charges, establishment card fees, and authority admin costs can add AED 3,000 to AED 8,000 on top of the headline number.
What Other Costs Should You Budget For?
Beyond the license, three costs catch most founders by surprise: office space, visas, and the corporate bank account.
Office space is mandatory in most free zones - you cannot get a license without a registered address. A flexi-desk or smart office runs AED 8,000 to AED 14,000 per year and is the most common choice for startups and service businesses. A dedicated private office starts from AED 25,000 and goes up depending on square footage and location.
Visa costs add up quickly if you are sponsoring staff. This is also where having the right accountant for your UAE business pays off - they can map out the full year-one spend before you commit. A single residence visa - including entry permit, medical examination (AED 500 to AED 800), Emirates ID (AED 370 to AED 570), and visa stamping - typically costs AED 3,750 to AED 5,000 all-in (u.ae, 2026). What we see most often is founders underestimating this line item when they plan to bring on two or three team members in the first year.
Bank account opening itself is free at most banks, but the minimum balance requirements and documentation demands add friction. Expect the process to take two to four weeks, and bring six months of personal bank statements, a source-of-funds declaration, and your full company documentation (UAE Government, 2026).
Which Free Zone Should You Choose?
The right free zone depends on three things: your business activity, your budget, and whether you need a physical presence.
DMCC suits trading, commodities, and companies that want the credibility of the UAE's largest free zone. It sits in JLT and has a well-developed ecosystem of service providers. JAFZA is the go-to for import-export, logistics, and industrial operations - it borders Jebel Ali Port, one of the busiest container ports in the world. IFZA works well for consultancies, tech startups, and holding companies that want a lean setup without paying for infrastructure they will not use.
The UAE has over 45 operational free zones across all seven emirates (u.ae, 2026). Some are industry-specific - DIFC and ADGM for financial services, Dubai Internet City for tech, Dubai Healthcare City for medical businesses. Others are generalist zones that accept most commercial activities.
One question clients always ask is whether they can operate outside their free zone. The answer changed in 2025: free zone companies can now sell directly to UAE mainland customers without needing a separate mainland license, provided they follow the updated dual-licensing rules (Ministry of Economy, 2025). Before 2025, free zone companies needed a mainland distributor or a separate DED license to sell to mainland customers - that requirement is now gone for most activities.
What Is the Step-by-Step Process?
The setup process is largely digital and faster than most people expect. Here is the typical sequence:
- Pick your free zone and confirm your business activity is permitted under that authority's schedule.
- Reserve your trade name. Most free zones approve names within 24 hours. The name must not duplicate an existing registration and cannot contain restricted terms (u.ae, 2026).
- Submit your application with passport copies of all shareholders, a brief business plan (some zones require this, others do not), and proof of address.
- Pay registration and license fees.
- Receive your trade license. Some zones - including Meydan and IFZA - issue licenses within 24 to 48 hours. Others take up to two weeks.
- Apply for visas if you need UAE residency. This step involves medical screening, Emirates ID registration, and visa stamping. Allow two to six weeks for processing.
- Open your corporate bank account. Book an in-person appointment - most UAE banks still require the signatory to attend physically.
The entire process from application to operating license can take as little as one week in a fast zone or up to three weeks in zones with more involved approval steps.
Corporate Tax and Free Zone Companies
This is where it gets tricky, and where the wrong advice costs real money. Since June 2023, all UAE businesses - including free zone entities - fall under the federal corporate tax regime at 9% on taxable income above AED 375,000 (FTA, 2025).
Free zone companies can still pay 0% on qualifying income if they meet the Qualifying Free Zone Person (QFZP) conditions. That means maintaining adequate substance in the zone, keeping audited financials, and ensuring non-qualifying revenue stays below 5% of total revenue or AED 5 million - whichever is lower. We covered the full QFZP requirements in our guide to free zone corporate tax. You will also need to understand your VAT obligations - corporate tax and VAT are separate regimes with separate registration requirements.
In our experience, the tax conversation should happen before you pick your free zone - not after. Your business structure, revenue sources, and mainland activity all affect whether you will actually qualify for the 0% rate.
FAQ
How long does it take to set up a free zone company in the UAE?
Most free zone companies receive their trade license within one to three weeks. Fast-track zones like IFZA and Meydan can issue licenses in 24 to 48 hours. Visa processing adds another two to six weeks if you need UAE residency.
Can I set up a free zone company without visiting the UAE?
Some free zones allow remote incorporation where you submit documents online and complete the process without travelling. However, opening a corporate bank account almost always requires a physical visit - most UAE banks need the signatory to attend in person.
What is the cheapest free zone to set up in?
IFZA and Ajman Free Zone are among the lowest-cost options, with packages starting from AED 10,000 to AED 12,000 for a basic license. Keep in mind that the cheapest license is not always the best value - consider visa allocations, office options, and the zone's reputation with banks.
Do I need an office to get a free zone license?
Yes. Every free zone requires a registered business address tied to your license. The most affordable option is a flexi-desk or smart office, which gives you a legal address and meeting room access without a dedicated physical space.
Can a free zone company hire employees?
Yes. Free zone companies can sponsor employee residence visas. Each license comes with a visa allocation - typically two to six visas for a basic package, with the option to purchase additional visa slots depending on your office space.
Not sure which free zone fits your business - or what the real year-one cost looks like for your situation? Get in touch and we will walk you through the options, from license selection to your first corporate tax registration. Our advisory team works with free zone businesses across the UAE every week.