What is a free zone company?
A free zone company is established under a specific free zone authority. Free zones generally allow full foreign ownership, but their permitted activities, legal forms, facilities, capital requirements, and visa arrangements differ. A free zone establishment, free zone company or LLC, and branch are common naming categories; the chosen authority defines the actual structure.
Which authority should you compare?
Dubai options include DMCC, JAFZA, Dubai Airport Freezone, Dubai South, and sector-focused communities. DIFC is a distinct financial free zone with its own legal and regulatory framework; it is not interchangeable with a general business free zone. Elsewhere in the UAE, authorities such as RAKEZ, Ajman Free Zone, and Sharjah-based zones may suit a different budget or location requirement. A company formed outside Dubai should not be described as Dubai-registered.
A practical package checklist
- Exact licence activities and any regulated activity approvals.
- Accepted workspace: flexi-desk, dedicated office, warehouse, or other premises.
- Visa allocation versus the cost of each actual visa.
- Establishment card, immigration, medical and Emirates ID charges.
- First-year total, renewal total, cancellation fees, and amendments.
- Bookkeeping, audit, tax registration, and filing obligations.
Can you trade on the mainland?
Do not assume a free zone licence permits unrestricted mainland operations. The appropriate licence, branch, permit, distribution arrangement, and sector approvals depend on the activity. Dubai’s Free Zone Mainland Operating Permit framework provides a route for eligible companies; confirm current eligibility with DET and your zone.
DET: Free Zone Mainland Operating Permit ↗
Is a free zone company tax-free?
No automatic exemption applies. The 0% corporate tax treatment for a Qualifying Free Zone Person is conditional and applies to qualifying income. Other income and failure to meet conditions can change the tax result. Corporate tax registration and returns remain relevant, and VAT is a separate assessment. Review the FTA’s current qualifying-income and compliance guidance before choosing a structure for tax reasons.
FTA: Qualifying Free Zone Person guidance ↗
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