Company formation in a Dubai Freezone - Dubai Freezones Guide

Are you planning to start your own business in Dubai? Then a Freezone could be just right for you. Dubai Freezones offer attractive benefits such as tax exemption, 100 % foreign ownership, simplified bureaucracy and specialised infrastructure, making it a magnet for international investors and businesses.

You can start your business quickly and efficiently in these specialised business areas. Whether you have a start-up or an established business, whether you are a freelancer, trader or influencer, the Freezones offer you the perfect environment to grow and prosper. Discover why more and more entrepreneurs are taking advantage of Freezones in Dubai.

The most important facts in a nutshell:

• Many advantages: Free zones in Dubai offer Tax exemptionfull company ownership rights and simplified bureaucracy.
  
• Specialised economic areas: Different Freezoness specialise in different industries, such as Jebel Ali Free Zone (logistics), Dubai Media City (media) and Dubai Silicon Oasis (technology).
  
• Efficient foundation processes: The infrastructure and administrative services in the Freezones enable quick and uncomplicated Setting up a company in the UAE.
  
• Wide range of company licences: Companies can choose between commercial, industrial and service licences to optimally cover their specific business activities.
  
• Note the challenges: Despite the many advantages, there are limitations such as the limited area of activity and various operating costs that must be taken into account when planning.
  

Advantages of a Freezone company in Dubai

A Dubai Freezone offers companies special benefits and incentives. These are designed to attract foreign investment and promote certain sectors of the economy by providing a business-friendly environment with specialised infrastructure and services. 

100 % foreign ownership:

• Companies can be wholly foreign-owned without a local partner, sponsor or shareholder
• Complete freedom to decide on management and profits

Tax advantages:

• 0 % Corporate income tax 
• No personal income tax
• Duty-free import and export of goods

Simplified company formation:

• Fast and uncomplicated registration and licensing processes
• Minimised bureaucratic effort

Financial freedom:

• 100 % Repatriation of capital and profits permitted
• No currency controls

Modern infrastructure:

• High-quality office space and storage facilities
• Industry-specific facilities

Strategic location:

• Good connections to harbours and airports
• Access to regional and international markets

Supporting services:

• Simplified visa procedures for employees
• Support with administrative processes

Industry-specific advantages:

• Freezones specialised in certain sectors (e.g. technology, media, finance)

These advantages make Dubai Freezones particularly attractive for new companies and international investors who want to benefit from a business-friendly environment.

Which Freezones are there in Dubai? 

Dubai is known for its numerous free zones. Here is an overview of the most important ones Freezones in Dubai and their main purpose:

How do I choose the right Freezone?

Choosing the right Freezone in Dubai can be crucial to the success of your business. To make the best decision, several factors should be considered:

1. Business activities

• Permitted activities in the respective Freezone
• Possibility of several activities under one licence

2. Industry specialisation

• Freezones specialised in certain sectors
• Synergies with similar companies

3. Location and infrastructure

• Proximity to ports, airports, business centres
• Available office space, storage facilities, production facilities

4. Costs

• Licence fees and registration costs vary depending on Freezone
• Annual licence renewal fees (approx. €5,000 per year)
• Rental and operating costs

5. Legal framework

• Specific rules and regulations of Freezone
• Flexibility in corporate structures

6. Visa regulations

• Number and type of visas available
• Simplicity of the visa process

7. Supporting services

• Business support services offered
• One-stop shop for administrative matters

8. Growth potential

• Options for expansion within the Freezone
• Flexibility in the event of changes to business activities

9. Reputation and stability

• Reputation and success story of the Freezone
• Financial stability and future prospects

10. Networking opportunities

• Existing business networks and cooperation opportunities
• Events and platforms for networking

By carefully weighing up these factors, you can choose the most suitable Freezone in Dubai for your business.

Choosing the right business licence

A licence in a Dubai Freezone is essential for the following reasons:

• Legal basis for business activities
• Access to benefits such as 100 % foreign ownership and tax exemptions
• Definition of authorised business activities
• Enables Visa application and Opening a bank account
• Prerequisite for the conclusion of legally valid contracts
• Lends credibility to the company

The licence is therefore essential in order to work legally and advantageously in a Dubai Freezone. But which licence is the right one for my Freezone company in Dubai?

Trade licences

These licences allow companies to import, export and trade goods and services within the Freezones. Many Freezoness, such as the Jebel Ali Free Zone (JAFZA) and the Dubai Airport Free Zone (DAFZA), offer trading licences. With a trading licence, companies can sell products such as electronics, food and clothing.

Industrial licences

These licences are aimed at companies that are active in the production and manufacture of goods. For example, JAFZA offers industrial licences for companies in the petrochemical, engineering and other industrial sectors. With an industrial licence, companies can operate manufacturing units and produce products such as machinery, chemicals and automotive parts.

Service licences

These licences are intended for companies that offer services such as consulting, IT services or medical services. Dubai Silicon Oasis, International Free Zone Authority (IFZA) and Dubai Media City offer service licences. With a service licence, companies can offer consulting services, software development and medical consultations.

Choosing the right licence ensures that the company can legally carry out its planned activities and has access to the corresponding benefits and opportunities in the respective Freezone.

Steps to setting up your business in a Freezone

Setting up a company in a Freezone in Dubai involves several specific steps. The following list shows you which steps are required to Company formation must be undertaken:

Select business activity:

• Determine company type and activity from over 2,100 options

Submit documents:

• Copies of identity documents, proof of residence, business plan, passport photos
• Ensure completeness and correctness

Apply for a business licence and visa:

• Main licence types: Commercial, industrial, service licence
• Visas possible for you and employees

Open a bank account:

• After receiving the business licence
• Documents required: copy of licence, company statutes, proof of identity and residence

These steps form the core of the incorporation process in a Dubai Freezone. Careful preparation and correct documentation are crucial for a smooth process.

Restrictions and challenges

The Freezones in Dubai offer many advantages, but there are also limitations and challenges that you should be aware of.

Limited field of activity

Companies in the Freezones of Dubai are not allowed to trade directly with the local market in the UAE outside the Freezone. Selling products or services to the local market requires co-operation with a local distributor. This regulation may limit market accessibility and create additional costs or complexity in doing business.

Operating and renewal costs

Although the Freezones offer tax advantages, there are several costly aspects to consider.

• Licence feesAnnual licensing by the authorities is subject to a fee.
  
• Operating costsCosts such as rent for offices and storage space can represent additional financial burdens.
  

These costs can have an impact on net income, as they are incurred regularly and need to be well calculated to ensure the profitability of your company.

Conclusion

The Freezones in Dubai offer foreign investors a unique opportunity to set up companies with 100 % of foreign ownership and benefit from significant tax advantages. With modern infrastructure and efficient administrative services, they support the rapid growth of businesses. Choosing the right Freezone is critical to the success of your business. Consider industry specialisation, location and regulatory requirements. Despite some restrictions, Dubai's Freezones offer an attractive environment for international business and investment. Take advantage of these opportunities to establish your company in one of the world's most dynamic economic zones.

Are you interested in the topic and would like personalised advice? The best way to discuss this with us is in a free expert discussion.

Frequently asked questions:

How much does a Freezone cost in Dubai?

The cost of a Freezone company in Dubai varies depending on the requirements of the setup, the Freezone and how many visas should be included. 

Can I set up a company in Dubai as a German?

Yes, Germans can set up a company in Dubai. In Freezones 100 % foreign ownership is possible.

How does a free zone work?

Freezones are special economic zones that offer companies tax benefits, 100 % foreign ownership and simplified incorporation processes.

Where are free trade zones located?

There are over 45 free zones in the UAE, spread across the seven emirates such as Dubai, Abu Dhabi, Sharjah, Fujairah, Ajman, Ras al Khaimah and Umm al Quwain.

How to get a stay in Dubai?

You can obtain residency in Dubai by working, studying, investing, buying property or starting a business. A residence visa and an Emirates ID are required.