Company Formation in UAE Freezone: A Complete, Plain-English Playbook
UAE free zones build a clear path for founders. Each zone offers fast registration with stable rules. A team gains 100% ownership inside these zones. A company enjoys modern space with strong utilities. The region gives access to air and sea routes. The system supports trade with many countries. This guide explains steps, choices, and costs in simple lines. The writing uses subject-verb-object sentences for easy reading.
Freezone basics you should know
A free zone is a special business area in the UAE. A zone authority grants licenses to firms. A company forms with one owner or with many owners. The authority issues an incorporation certificate. The authority links your file to immigration systems. A firm gets visas for investors and staff. A bank opens a corporate account after KYC. You then start trade with clients abroad and in zones.
Core ideas at a glance
- You hold full foreign ownership inside the zone.
- You repatriate capital and profits under banking and tax rules.
- You enjoy simplified customs while goods stay in the zone.
- You file corporate tax, ESR, and UBO when required.
- You choose office types that match visa quotas.
Why founders choose a UAE free zone today
Entrepreneurs want control, speed, and reach. Free zones give these traits in one package.
- Control: You own the entity fully within the zone framework.
- Speed: You receive a license quickly when documents match rules.
- Reach: You sit near airports and seaports for global access.
- Costs: You start small and scale space as demand grows.
- Support: You access digital portals for renewals and payments.
- Talent: You sponsor visas for skilled staff under a set quota.
Entity types you can register
You pick an entity that suits ownership and risk.
- FZE (Free Zone Establishment): One shareholder holds equity. The owner enjoys limited liability.
- FZC / FZ-LLC (Free Zone Company): Two to fifty shareholders share equity. The company enjoys limited liability.
- Branch of a Foreign Company: The parent keeps legal identity. The branch operates under parent control.
- Branch of a UAE Company: A local parent expands into a new zone.
- Freelance Permit (in select zones): An individual delivers services under their own name.
License families and what they allow
Your revenue model guides your license selection.
- Commercial / Trading License: You import goods and sell goods. You re-export with customs support.
- General Trading License: You cover a broad goods list under one license, subject to zone rules.
- Service / Professional License: You provide advisory, IT, design, or similar services.
- Industrial / Manufacturing License: You assemble, package, or manufacture with approved facilities.
- E-commerce License: You sell online with digital channels and fulfillment.
- Media / Education / Healthcare Licenses: You operate sector-specific activities with extra approvals when needed.
- Warehouse / Logistics Permissions: You store goods and run distribution hubs.
Facilities: choose space that fits your plan
Your facility drives your visa quota and your cost base.
- Flexi-desk / smart office: You use a shared desk with meeting credits. This plan reduces cost at launch.
- Private office: You lease a lockable unit for daily work and client meetings.
- Co-working studio: You share a creative space with bookable rooms.
- Warehouse / LIU (light industrial unit): You store, pack, or assemble with loading bays.
- Built-to-suit plot: You develop a plant or a regional DC on long-term lease.
Step-by-step: how to set up in a UAE free zone
1) Define your business activity
You write what you sell or make. You map the activity to a zone list. You note any external approvals.
2) Select the entity type
You pick FZE for solo ownership. You pick FZC for partners. You pick a branch when contracts must sit with a parent.
3) Reserve the trade name
You propose names that follow rules. The name includes the legal form tag. The name avoids restricted words.
4) Prepare documents
You collect passports, proof of address, and photos. Corporate owners add a good-standing certificate and a board resolution. You draft a one-page plan with target clients and suppliers.
5) File the application
You submit forms on the portal. You pay initial fees. You receive initial approval if items are complete.
6) Sign the lease
You choose a space that fits visa needs. You sign and upload the lease agreement.
7) Receive license and corporate kit
You receive the license, MoA/AoA, and incorporation certificate. You also obtain an establishment card when the zone issues one.
8) Open a corporate bank account
You give UBO charts, invoices, and sample contracts. You pass interviews for KYC and AML. The bank enables multi-currency access.
9) Process visas
You apply investor and employee visas. You complete medicals and Emirates ID. The visa gets stamped.
10) Start operations and keep records
You issue invoices and collect payments. You reconcile books each month. You renew on time.
Document checklist to compile early
- Passport copies for shareholders and managers
- Two proofs of address (dated within 90 days)
- Three trade-name options with legal form
- Activity description and a short business plan
- MoA/AoA drafts or board resolution for branches
- Specimen signatures and RIC where required
- Office or warehouse lease agreement
- UBO declaration and ownership chart
- Corporate tax registration details (once in scope)
- VAT assessment and registration (if applicable)
Banking: what good files look like
Banks want clarity and control. A clean file speeds onboarding.
- A simple 12-month cash-flow with assumptions
- Three sample contracts and two supplier quotes
- Proof of source of funds for initial capital
- Identification for all UBOs above the threshold
- Clear addresses that match across every form
- A sanctions and PEP check process for counterparties
Tips: Keep documents consistent. Explain any group links. Use dual authorization for online payments. Reconcile the ledger monthly.
Taxes, ESR, UBO, and VAT: your compliance pillars
Corporate Tax (QFZP concept):
A free-zone entity may access a 0% rate on qualifying income if it meets the Qualifying Free Zone Person conditions and substance. Non-qualifying income can be taxed at the standard rate. You should segment revenue lines and document the basis.
Economic Substance Regulations (ESR):
If you conduct a relevant activity, you file a notification and, when in scope, a report. Holding entities often file a light report. Distribution and service centers may need enhanced details.
Ultimate Beneficial Owner (UBO):
You file UBO details after incorporation and update on changes. Keep IDs and addresses current.
VAT:
You register when you cross thresholds or when imports or supplies trigger liability. Some zone flows can be zero-rated or out of scope based on facts. Keep shipping proofs and export evidence on file.
Books and audits:
Maintain books in accepted formats. Store invoices, bank statements, and leases. Some zones or banks ask for audited accounts. Plan the audit cycle early.
Costs and timelines: realistic, not rosy
- Trade-name and initial approval: 1–3 working days
- License issuance after filing: ~3–7 working days (activity dependent)
- Bank onboarding: ~1–4 weeks based on KYC depth
- Visa processing: ~5–10 working days per file after medicals
Typical cost heads
- License and registration fees
- Lease and utility deposits
- Immigration card and visa fees
- Attestation and translation charges
- Bank account setup and minimum balance
- Compliance costs (tax, ESR, UBO, VAT)
Mainland vs. free zone: a simple comparison
- Ownership: Free zone allows full foreign ownership; mainland now also allows it for most sectors, but approvals differ.
- Market access: Free zone focuses on export and B2B; mainland sells directly to the UAE market.
- Compliance: Both follow corporate tax, ESR, UBO, and VAT rules where applicable.
- Facilities: Free zones bundle space and services; mainland offers wider geographic choices.
Choosing the right free zone for your sector
Each zone targets clusters. Pick the one that fits your model and customer path.
- Trade and logistics: Jebel Ali–linked zones and northern emirate hubs
- Technology and startups: Digital-friendly zones with co-working and accelerators
- Manufacturing and assembly: Zones with LIUs and access to ports
- Media and content: Zones with studios and post-production facilities
- Education and healthcare: Zones that coordinate sector approvals
Common mistakes and how to avoid them
- Selling to mainland without structure: Use a distributor or create a mainland entity.
- Under-scoped activity list: Add the right codes at the start to avoid rework.
- Weak banking pack: Include proof of funds and real contracts.
- Missed deadlines: Calendar your tax, ESR, UBO, VAT, and renewal dates.
- Space-quota mismatch: Ensure your lease supports your visa plan.
Operating rhythm after go-live
- Issue quotes and POs with serial control.
- Match invoices to delivery proofs and export docs.
- Reconcile bank and ledger monthly.
- Approve related-party deals in board minutes.
- Refresh KYC on key suppliers and clients yearly.
- Renew license and visas 30 days before expiry.
- Back up records in two secure locations.
Sample paths for different founders
Trading startup
You begin with a general trading license. You lease a flexi-desk. You partner with a 3PL for storage. You re-export to GCC clients. You open a multi-currency account.
Service firm
You pick a service license. You lease a small office for meetings. You hire two consultants on visas. You invoice abroad and keep time sheets.
Light manufacturing
You rent an LIU with loading bays. You import parts and assemble products. You certify quality and ship regionally.
E-commerce brand
You choose an e-commerce license. You integrate gateways and couriers. You set a returns hub in the zone.
What Can Help — Mubarak Al Ketbi (MAK) Auditing
Mubarak Al Ketbi (MAK) Auditing guides your UAE free zone setup from first scoping to first invoice. Our team maps your activity to the correct license. Our consultants prepare names, MoA/AoA, and board papers. Our tax desk handles corporate tax registration, QFZP reviews, ESR notifications, UBO filings, and VAT assessments. Our banking desk builds a strong KYC pack and coordinates onboarding. Our PRO unit manages investor and staff visas. We set a compliance calendar and monitor renewals. We align your controls with audit-ready files—because when you plan early, you avoid pain later; after all, a stitch in time saves nine.
For more information
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Contact/WhatsApp: +971 50 276 2132
