Dubai isn’t just a grand tourist destination. It is an exciting business hub offering abundant opportunities for entrepreneurs. One such feature is the free zones. Depending on the business activity you’ve chosen, setting up a free zone company has multiple advantages. This blog explores the fundamentals of a Dubai free zone license, giving you a comprehensive overview to decide if a free zone company is the right choice for you.

What is a Free Zone in Dubai?

Before learning more about free zone companies, let us start with this basic question. What are free zones anyway? In the UAE, a free zone is a special economic zone established to foster business growth and attract foreign investors. Companies that operate in a free zone in Dubai are subject to different regulations that do not apply outside the zone. There are over 40 free zones in the UAE offering tailored infrastructure for specific industries. 

Benefits of Free Zones in Dubai

  • Tax advantage

A Dubai free zone company enjoys substantial tax benefits in terms of exemptions on corporate income and import/export duties. This lowers the operating costs improving the profit margin.

  • Foreign ownership

If you have a Dubai free zone license, your company can have 100% foreign ownership. This means you don’t need a local investor and can have full control of your activities.

  • Simplified regulations

Free zones don’t have the same regulations for businesses as the mainland. Comparatively, they have more streamlined business setup procedures. This makes it faster and easier to get your company up and running.

  • Industry focus

As mentioned before, many free zones specialise in specific sectors like logistics, media, aviation, finance and more. This offers companies industry-specific support, networking opportunities and specialised infrastructure.

  • Global access

Dubai’s prime location and network of free zones turn it into a global trade powerhouse. Setting up shop in a free zone simplifies connecting and doing business with companies around the world.

Free Zone Company Structures in Dubai

In free zones, you have the flexibility to pick a legal structure that best suits your business goals. This means you can choose a setup that aligns with your ownership preferences and operational requirements. 

  • Free Zone Company (FZC)

A free zone company should have 2 or more shareholders with limited liability. It must operate within the free zone boundary and comply with the rules set by the respective free zone authority. 

  • Free Zone Establishment (FZE)

A Free zone establishment is a limited liability company with only one shareholder. Like FZCs, it is also subject to limitations on local trade compared to the Dubai mainland. The lower setup and maintenance fees of FZEs make them cost-efficient and ideal for solo entrepreneurs.

  • Branch of a Foreign or Local Company

Foreign and local companies can extend their business operations to free zones in Dubai by setting up a branch or a representative office. This branch office is permitted to promote the parent company’s services and trade in its name. 

Key Free Zones in Dubai

  1. Jebel Ali Free Zone (JAFZA)

As Dubai’s flagship free zone, JAFZA is one of the oldest and most popular free zones. Its strategic location near the Jebel Ali Port, the 7th largest container port in the world, makes it perfect for an import/export business. It caters to a wide range of industries in a thriving environment with a supportive ecosystem. In 2023, the businesses registered in JAFZA generated $168 billion in trade value.

  1. Dubai Multi Commodities Centre (DMCC)

As a globally recognized free zone, DMCC is particularly well-suited for trading in commodities like gold, diamonds, and tea. DMCC offers a cost-effective solution by allowing a single license to cover up to six business activities. They also permit dual licensing if your operations require it. It is one of the two free zones that permits crypto commodities trading.

  1. International Free Zone Authority (IFZA)

Established in 2018, IFZA is a relatively new free zone in Dubai but quickly gained popularity due to its focus on being a cost-effective and business-friendly option. It is the cheapest freezone in Dubai and a unique feature of this free zone is that no physical office is required to start a business here. This makes it attractive for online businesses. 

  1. Dubai International Financial Centre (DIFC)

DIFC is a leading financial centre in the region offering specialised infrastructure and regulatory frameworks for the financial sector. This makes it an ideal environment for fintech firms and start-ups luring banks, insurance companies, and investment firms.

  1. Dubai Internet City (DIC)

DIC was established to house companies working on emerging technologies. This innovation and technology hub provides high-speed internet, co-working spaces, and proximity to venture capitalists. Tech startups, established tech companies and research & development centres find DIC ideal for their purposes.

Why Choose Cleritbiz for Free Zone Business Setup

Dubai’s free zones offer significant advantages for entrepreneurs, including tax benefits, simplified regulations, industry-specific support, and global access. The flexibility in choosing a company structure tailored to business goals further enhances the appeal of setting up a free zone company in Dubai. At Cleritbiz, you can set up your free zone business in 7 days. Book a free consultation right away!