Scope note: this guide covers the most affordable free-zone licences relevant for Dubai-based entrepreneurs. That includes both strict Dubai free zones and the nearby Sharjah, Ajman, and RAK zones that many Dubai-based founders pick for cost reasons. Each option is within a 30–75 minute drive of central Dubai.
The cheapest free-zone licence can cost anywhere from under AED 5,750 to over AED 50,000 once you add visas, office, establishment card, and basic compliance. This guide breaks down the indicative 2026 figures and the hidden charges most cost lists miss.
Many founders budget only for the trade licence — then discover the actual first-year setup cost is 2–3x higher after visas, office, banking, and compliance.
Cheapest Starting Licences (2026)
| Zone | Emirate | Starting Licence (AED) | Visa Allocation | Notes |
| Shams Freelancer Permit | Sharjah | ~5,750 | 1 (add-on) | Most affordable in the UAE |
| Ajman Free Zone | Ajman | ~5,500–6,000 | 0–3 (add-on) | Designated zone for VAT |
| Sharjah Publishing City | Sharjah | ~6,500 | 1 (add-on) | Publishing & media focused |
| RAKEZ Freelancer | RAK | ~5,750 | 1 | Plus instant licence option |
| Fujairah Creative City | Fujairah | ~6,500–12,000 | 0–3 | Media & consultancy |
| IFZA (DSO) | Dubai | ~12,900+ | 0–6 | Strictly Dubai free zone |
| Meydan | Dubai | ~12,500+ | 0–3 | Strictly Dubai free zone |
Hidden Cost Components That Inflate the True First-Year Bill
- Establishment card (MOHRE): ~AED 1,500/year. Required for visa sponsorship.
- Immigration card (ICP): ~AED 1,500/year. Also required for visa sponsorship.
- Visa cost per person: ~AED 4,000–5,000 (entry permit + medical + Emirates ID + stamping).
- Basic health insurance: ~AED 1,500/year per person.
- Flexi-desk / virtual office: ~AED 5,000/year. Many “licence-only” headline prices exclude this.
- Activity-add fee: ~AED 1,000–2,500 per activity added after licence issuance.
- Name reservation: typically AED 300–1,000.
- Change of shareholder / amendment fee: AED 2,000–5,000 if you restructure later.
- Late renewal: penalties typically AED 250+/month and can reach AED 10,000+ if a renewal lapses for a year.
True First-Year Cost — Three Worked Scenarios
Scenario A — Solo Consultant on Shams Freelancer Permit
- Freelancer Permit: ~AED 5,750
- Establishment + immigration cards: ~AED 1,500
- Visa (entry permit + medical + Emirates ID + stamping): ~AED 4,500
- Basic health insurance: ~AED 1,500
- Optional: virtual office add-on AED 3,000+
Indicative total: AED 13,250 without office, or AED 16,000–18,000 with a virtual office.
Scenario B — Single-Shareholder Service Company in Meydan
- Licence: ~AED 12,500
- Office package (flexi-desk): ~AED 5,000
- Establishment + immigration cards: ~AED 1,500
- Visa × 1: ~AED 4,500
- Health insurance × 1: ~AED 1,500
Indicative total: ~AED 25,000.
Scenario C — IFZA Service Company with 2 Visas
- Licence: ~AED 12,900
- Flexi-desk: ~AED 5,000
- Establishment + immigration cards: ~AED 1,500
- Visas × 2: ~AED 9,000
- Health insurance × 2: ~AED 3,000
Indicative total: ~AED 31,500.
Cheapest Strictly-Dubai Free Zones
If you specifically want a Dubai-issued licence (not Sharjah / Ajman / RAK), the cheapest options as of 2026 are:
- Meydan Free Zone — from ~AED 12,500.
- IFZA (in Dubai Silicon Oasis) — from ~AED 12,900.
- Dubai South Free Zone — from ~AED 12,000+ for select packages.
All three issue trade licences in 3–5 business days, support fully digital setup, and offer multi-activity packages.
Tax Position
All these free zones are subject to UAE corporate tax under Federal Decree-Law No. 47 of 2022. Entities can qualify for 0% on qualifying income under the QFZP regime (Cabinet Decision No. 100 of 2023; Ministerial Decision No. 265 of 2023). Non-qualifying income is taxed at 9% above AED 375,000. Corporate-tax registration on EmaraTax is mandatory regardless of revenue.
VAT registration is mandatory above AED 375,000 in taxable supplies; voluntary above AED 187,500.
What We See Most Often (BCL Globiz Experience)?
The biggest hidden cost on cheap-licence setups is banking time. Tier-1 UAE banks routinely add 4–8 weeks to onboard a freelancer-permit or budget-zone entity compared to a DMCC or DIFC entity. Cost-conscious founders often start with a digital bank (Wio, Mashreq Neo) as a first account, then migrate to a tier-1 bank after 6 months of operating history.
Activity-add traps: clients regularly choose the cheapest package, then find their activity list is too narrow for their actual invoicing. Adding activities costs AED 1,000–2,500 each, and if the new activity sits in a different group the licence may need full reissuance. Map the 12-month invoicing plan to the activity list before signing.
Who Should Avoid Cheap Free Zones?
Low-cost UAE free zones are not ideal for every business. Businesses requiring strong banking credibility, enterprise clients, government contracts, or immediate UAE mainland expansion may face operational and banking challenges with budget free zones.
In such cases, premium jurisdictions like DMCC, DIFC, or mainland company formation may offer better long-term commercial value despite higher setup costs.
Before choosing between a low-cost free zone or mainland structure, compare the operational and tax differences in our detailed Free Zone vs Mainland UAE guide.
Frequently Asked Questions
What is the cheapest free-zone licence accessible from Dubai?
The cheapest licences accessible to Dubai-based entrepreneurs are Shams Freelancer Permit (Sharjah, ~AED 5,750), Ajman Free Zone (~AED 5,500–6,000), and RAKEZ Freelancer (~AED 5,750). For strictly-Dubai zones, Meydan (~AED 12,500) and IFZA (~AED 12,900) are the most affordable.
Does the cheapest licence include a visa?
No, typically not. Most starting packages exclude visas. Each visa costs approximately AED 4,000–5,000 and requires the establishment card (~AED 1,500) and immigration card (~AED 1,500) to be in place.
Is the cheapest free zone always the best choice?
No. The cheapest zone often has weaker banking acceptance and adds 4–8 weeks to account opening with tier-1 banks. Factor banking timeline and credibility into the total cost, not just the licence headline.
Can I avoid the flexi-desk fee?
Some freelancer permits do not require a flexi-desk. Most company licences (FZE, FZ-LLC) require at least a virtual office or flexi-desk for visa sponsorship. Confirm before signing.
Do cheap free-zone companies pay UAE corporate tax?
Yes. All UAE free-zone companies — regardless of price — are subject to UAE corporate tax under Federal Decree-Law No. 47 of 2022. They can qualify for 0% on qualifying income under the QFZP regime; non-qualifying income is taxed at 9% above AED 375,000.
Reach out to our experts at info@bcl.ae.
