# How to Open a Company in a UAE Free Zone: 2026 Guide The UAE has 45+ free zones across all seven emirates. Choosing the right emirate, free zone, licence, visa route, banking path, and tax registration sequence can be the difference between a smooth 4-week setup and a 4-month delay. If you are still evaluating the right UAE business structure, compare free zone and mainland company formation before selecting a jurisdiction. ## Step 1 — Choose the Emirate | Emirate | Best for | Starting Licence Cost | | --- | --- | --- | | Dubai | Tech, financial services, trading, media, regional HQs | AED 12,500+ | | Sharjah | Cost-conscious SMEs, freelancers, media, light industry | AED 5,750+ | | Ras Al Khaimah | Cost-effective trading and manufacturing | AED 5,750+ | | Abu Dhabi | Finance through ADGM, media through twofour54, industry through KIZAD | AED 20,000+ | | Fujairah | Maritime, oil and gas, cost-conscious service companies | AED 9,000+ | | Ajman | Budget service companies, ecommerce | AED 6,000+ | | Umm Al Quwain | Small-scale trading, warehousing | AED 10,000+ | ## Step 2 — Choose the Free Zone Within the Emirate ### Dubai Common options include DMCC for trading, DIFC for financial services, Dubai Internet City for technology, JAFZA for logistics and designated-zone benefits, IFZA and Meydan for cost-conscious SMEs, and Dubai CommerCity for ecommerce and designated-zone benefits. ### Sharjah Options include Shams for media, IT, and freelance activities; SAIF Zone for aviation and designated-zone benefits; HFZA for industrial and designated-zone activities; and Sharjah Publishing City. ### Ras Al Khaimah RAKEZ is commonly used for operational businesses. RAK ICC is used for offshore holdings and does not provide visa eligibility. ### Abu Dhabi Options include ADGM for finance under English common law, twofour54 for media, and KIZAD for industrial activities and designated-zone benefits. ### Fujairah Options include Fujairah Free Zone Authority for broad government-supported activities and Fujairah Creative City for media and consultancy. ### Ajman Options include Ajman Free Zone, which is a designated zone, and Ajman Media City Free Zone. ### Umm Al Quwain UAQ Free Trade Zone operates across two locations: Ahmed Bin Rashid Port and Sheikh Mohammed Bin Zayed Road. ## Step 3 — Choose the Entity Type and Licence Category Common free zone entity types include: - **FZE** — single shareholder. - **FZCO / FZ-LLC** — two or more shareholders. - **Branch** — extension of an existing company. - **Freelancer or individual professional permit** — for solo professionals. Common licence categories include service, consultancy, commercial, trading, industrial, ecommerce, freelance, holding, and media. Before selecting the activity, map your expected 12-month invoicing plan to the free zone’s activity list. Adding activities later commonly costs AED 1,000–2,500 per activity. Choosing the right UAE free zone depends on your business activity, banking requirements, and long-term expansion strategy. ## Step 4 — Prepare the Standard Document Pack Most free zone applications require: - Passport copy of each shareholder, valid for at least 6 months. - Passport-size photographs. - Brief business plan or activity description. - Proof of address, such as a utility bill or bank statement not older than 3 months. - For corporate shareholders: certificate of incorporation, MOA/AOA, board resolution approving the UAE entity, and certificate of good standing, all duly attested. - If the applicant is on an existing UAE visa: NOC from the current sponsor. ## Step 5 — Submit the Application, Pay Fees, and Receive the Licence Most UAE free zones support remote applications through an online portal. Initial approval typically takes 1–3 business days. The trade licence is usually issued digitally within 24–48 hours after payment. RAKEZ’s Instant Licence option can issue a licence in as little as 1 business day. ## Step 6 — Apply for Establishment Card, Immigration Card, and Visas An establishment card from MOHRE and an immigration card from ICP are prerequisites for visa sponsorship. Each is approximately AED 1,500 per year. The visa process generally follows this sequence: 1. Entry permit. 2. Medical examination. 3. Emirates ID biometrics. 4. Visa stamping. Visa processing usually takes 2–4 weeks per visa. Health insurance must be in place before visa stamping. ## Step 7 — Open a Corporate Bank Account Banks typically require: - Trade licence. - MOA/AOA. - Passport and visa copies of all shareholders. - Proof of business activity, such as sample invoices, contracts, or website. - Proof of address. - Initial deposit. Approval typically takes 2–6 weeks. Tier-1 banks such as Emirates NBD, ADCB, Mashreq, and HSBC generally prefer entities from jurisdictions such as DMCC, DIFC, JAFZA, ADGM, and DAFZA. Lower-cost free zones may often start with digital banks such as Wio or Mashreq Neo. ## Step 8 — Register for VAT and Corporate Tax ### VAT Registration VAT registration is mandatory if taxable supplies exceed AED 375,000. Voluntary registration is available above AED 187,500. Relevant law: Federal Decree-Law No. 8 of 2017. ### Corporate Tax Registration Corporate tax registration on EmaraTax is mandatory for every free zone entity, regardless of revenue. The deadline depends on the trade licence issuance date, under FTA Decision No. 3 of 2024. Late corporate tax registration attracts a flat AED 10,000 penalty. Relevant law: Federal Decree-Law No. 47 of 2022. ### Free Zone Corporate Tax Treatment Free zone entities may qualify for 0% corporate tax on qualifying income under the Qualifying Free Zone Person regime. Relevant decisions include: - Cabinet Decision No. 100 of 2023. - Ministerial Decision No. 265 of 2023. Non-qualifying income is taxed at 9% above AED 375,000. ## Indicative First-Year Cost by Profile | Business Profile | Indicative First-Year Cost | | --- | --- | | Solo consultant, freelancer permit, 1 visa, flexi-desk | AED 18,000–22,000 | | Single-shareholder FZE, service activities, 2 visas | AED 30,000–40,000 | | Multi-shareholder FZCO in DMCC or DIFC, 4 visas, small office | AED 60,000–90,000 | | Trading FZCO with warehouse | AED 70,000–150,000+ | ## What BCL Globiz Sees Most Often Many clients initially select a free zone based mainly on cost, before checking their customer mix. In practice, the key trigger should be where more than 60% of revenue will come from. If most revenue is from overseas customers or other free zone entities, a free zone may be suitable and may provide access to 0% corporate tax on qualifying income. If most revenue is from UAE mainland B2B or B2C customers, especially where input VAT recovery matters, mainland formation may be cheaper overall. Corporate tax registration on EmaraTax is one of the most commonly overlooked steps. The deadline follows the trade licence issuance date, not the incorporation date. The AED 10,000 late registration penalty applies to every entity, regardless of revenue or qualifying status. ## Who Should Not Choose a UAE Free Zone? A UAE free zone may not be the best option for businesses mainly targeting: - UAE mainland customers. - Government contracts. - Retail operations. - Business models requiring strong local banking relationships from the start. Mainland company formation is often more suitable for businesses with heavy UAE local operations, significant VAT recovery requirements, or physical storefronts. Free zones can offer lower setup costs and 100% foreign ownership, but choosing the wrong jurisdiction can create operational and banking challenges later. ## Frequently Asked Questions ### How many free zones are there in the UAE? The UAE has 45+ active free zones across all seven emirates as of 2026. Dubai has the most, with 30+, followed by Sharjah, Abu Dhabi, Ras Al Khaimah, Fujairah, Ajman, and Umm Al Quwain. ### Which is the cheapest UAE free zone? Shams in Sharjah is among the most affordable, with freelancer permits from approximately AED 5,750 per year. Ajman Free Zone, RAKEZ, and Fujairah Creative City also offer competitive starting packages. ### Can a foreigner open a company in a UAE free zone? Yes. UAE free zones allow 100% foreign ownership, with no local sponsor or local partner required. ### Do free zone companies pay UAE corporate tax? Yes. Free zone companies are subject to UAE corporate tax under Federal Decree-Law No. 47 of 2022. They may benefit from a 0% rate on qualifying income if they meet Qualifying Free Zone Person conditions under Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 265 of 2023. Non-qualifying income is taxed at 9% above AED 375,000. ### How long does it take to open a free zone company in the UAE? Licence issuance usually takes 1–5 business days. Visa processing takes 2–4 weeks per visa. Bank account opening typically takes 2–6 weeks. A realistic total timeline is 4–8 weeks.