Dubai Free Zones (2025): What They Are, Costs, and How to Choose the Right One

Dubai Free Zone is a special economic area in Dubai that offers business licenses, 100% foreign ownership, customs benefits, and streamlined visas, usually focused on a specific industry such as trade, finance, tech, or logistics. If you’re asking if Dubai has a free zone-the short answer is yes, dozens. And not just one-size-fits-all. Each zone targets a different type of business, with different fees, visa quotas, and rules. This guide shows you how they work, which one fits your plan, and what it costs in 2025.

• TL;DR

• Dubai has 20+ active free zones; pick by activity, budget, and visa needs.
• Expect first-year setup from AED 12,000-40,000 for most non-regulated zones; DIFC is higher.
• Free zones allow 100% foreign ownership and easier visas; trading to mainland needs a distributor or customs clearance.
• Corporate tax: 0% on qualifying free‑zone income if you meet conditions; 9% otherwise (UAE corporate tax since 2023).
• Process: choose activity → name reservation → initial approval → lease/flexi-desk → license → visas → bank/VAT/tax registrations.

What free zones are and how they differ from mainland

Free zones in Dubai sit inside the UAE but are treated differently for company licensing and customs. You can own 100% of the company, sponsor staff, and import goods into the zone without duties until they enter the UAE mainland. Services are generally fine across borders, but selling to mainland customers may need a local distributor, a branch, or paying customs and VAT on goods.

Since 2021, many mainland activities also allow 100% foreign ownership. So why still pick a free zone? Sector clusters, simple setup, and customs/logistics perks. If your buyers are outside the UAE, or you’re in a niche sector (finance, commodities, media, logistics), a free zone can be a clean fit.

Tax context in 2025: the UAE corporate tax is 9% for most profits. Free zone entities can get 0% on “qualifying income” if they meet substance rules, keep audited accounts, and stick to qualifying activities and free zone-to-free zone dealings. Fall outside that, and the 9% rate applies. For rules, check the UAE Ministry of Finance and the Federal Tax Authority.

Meet the major Dubai free zones

Different zones, different strengths. Here are the big names and what they’re known for:

DMCC (Dubai Multi Commodities Centre) - a commodities and trade-focused free zone launched in 2002, now one of the largest in the UAE by number of companies, popular for trading, crypto/proprietary tech activities, and general services. Known for strong compliance, broad activity list, and JLT office towers.

JAFZA (Jebel Ali Free Zone) - an industrial and logistics heavyweight founded in 1985 next to Jebel Ali Port. Best for import/export, warehousing, and manufacturing. Offers large plots and easy port connectivity.

DIFC (Dubai International Financial Centre) - Dubai’s financial free zone with an independent common-law court system, strong on banking, asset management, fintech, and professional services. Financial services are regulated by the DFSA. Office space and fees are higher but prestige and ecosystem are strong.

DAFZ (Dubai Airport Freezone) - a zone adjacent to Dubai International Airport (DXB) aimed at high-value, fast-moving goods, electronics, and light industrial. Great for air cargo and re-exports.

DSO (Dubai Silicon Oasis) - a tech-centric free zone and integrated community. Good for software, hardware, R&D, and startups that want affordable offices and labs.

IFZA (International Free Zone Authority) - a free zone known for flexible, cost-effective packages (often via agents) and a broad list of activities. Attractive to small consultancies and online businesses.

Dubai South (formerly DWC) - a logistics-focused zone around Al Maktoum International Airport, home to Dubai Logistics District and close to Jebel Ali. Designed for air-sea multimodal trade.

How to choose the right zone (decision steps)

Work through these steps and you’ll narrow to one or two realistic options.

1. Define your activity precisely. Is it software development, proprietary trading, e-commerce, import/export, asset management, healthcare, media, or manufacturing? Your license must match your actual work. Zones vary in how they name activities.
2. Where are your customers? Mostly outside the UAE? A free zone is easy. Mostly in the UAE mainland? You can still use a free zone but plan for a mainland distributor, a branch, or a different structure.
3. How many visas? Flexi-desk packages might sponsor 1-3 visas; larger offices can sponsor more. List how many you’ll need in the first 12 months.
4. What’s your logistics footprint? If you need warehousing or frequent customs clearance, JAFZA, Dubai South, and DAFZ are purpose-built for that.
5. Budget bands. Under AED 20k first year? Look at IFZA or select DSO packages. AED 25k-40k? DMCC, DAFZ, DSO mid-range. Premium and regulated? DIFC (costs can be multiples higher).
6. Regulation tolerance. Finance or payments? DIFC with DFSA oversight may be a must. Healthcare? Consider specialized zones like Dubai Healthcare City (outside our primary list here but worth noting).

Comparison of popular Dubai free zones in 2025

Costs, taxes, and visas: what to expect in 2025

Budget is more than a headline license fee. Totals vary by zone and setup choices:

• License and registration: commonly AED 8,000-20,000 for non-regulated activities; DIFC and regulated finance are higher.
• Name reservation, initial approval: a few hundred dirhams.
• Office or flexi-desk: from AED 5,000-20,000 depending on zone and visa allocation; real offices cost more but lift visa quotas.
• Establishment card, immigration: often AED 1,000-2,500.
• Residency visas: roughly AED 3,500-5,500 per person (medical, Emirates ID, stamping), plus deposits where applicable.
• Bank account: no fee to the government, but banks may require minimum balances (commonly AED 25,000-100,000) and detailed KYC.
• Annual renewals: similar to year-one, though one-off registration fees drop out; build AED 12,000-30,000 into your yearly budget for most non-regulated zones.

Taxes: UAE corporate tax at 9% applies from 2023. Free zone companies can get 0% on qualifying income, but you must meet substance, maintain audited financials, and keep to qualifying activities and transactions as set by the Ministry of Finance. Distributions and most personal income remain untaxed; VAT at 5% applies to taxable supplies. Some free zones (or parts) are designated zones for VAT, which affects how goods are taxed while inside the zone.

Visas: The number of visas ties to your leased space (flexi desk, office square meters, or warehouse). Zones differ: one flexi desk might allow 1-3 visas; a small office might allow 4-6; larger spaces scale up. If you plan to hire fast, factor this in early.

Step-by-step: setting up a free zone company

1. Choose your activity and free zone. Cross-check the exact activity name in the zone’s list (e.g., “Commercial Brokerage,” “Software Development,” “General Trading”).
2. Pick a legal form. Most choose an FZ-LLC (single or multiple shareholders). Branches are available if you have an existing company abroad.
3. Name reservation and initial approval. Submit passports, a business plan (for some zones), and any reference letters if requested.
4. Lease space. Flexi-desk or office. The lease often gates your visa quota.
5. Pay fees and receive the license. You’ll also get formation documents (e.g., Articles, Share Certificates).
6. Immigration setup. Establishment card and e-channel access (if required by the zone).
7. Open a bank account. Prepare a clear source-of-funds story, customer list, supplier list, contracts, and website. Banks in the UAE are strict on KYC.
8. Register for VAT if you hit the AED 375,000 threshold (or voluntarily at AED 187,500). Assess corporate tax status and whether you qualify for the free zone 0% regime.
9. Comply with ESR (Economic Substance Regulations) if you carry out relevant activities, and with AML/CFT if you’re a DNFBP (e.g., real estate brokers, corporate service providers, dealers in precious metals).
10. Issue visas. Entry permit, medicals, biometrics for Emirates ID, and residence stamping.

Real-world scenarios (which zone fits?)

• Solo consultant (marketing or software): IFZA or DSO for lower fees and simple licensing; 1-2 visas via a flexi-desk if you need residency.
• E-commerce store shipping outside the UAE: DMCC for credibility and banking or IFZA for budget. If you hold stock, JAFZA or Dubai South for warehousing and customs flow.
• Fintech or asset management: DIFC for the ecosystem, DFSA regulation, and investor confidence. Expect higher cost and longer approvals.
• Electronics re-exports: DAFZ for proximity to DXB and quick air cargo. JAFZA if your volume leans to sea freight.
• R&D hardware lab: DSO for labs, supplier access, and reasonable office rates.

Free zone vs mainland: quick decision rules

• Pick a free zone if your customers are international, you need warehousing near ports/airports, or you want a sector hub (finance, tech, media).
• Pick mainland if you need retail premises, tenders with government, or wide onshore service delivery without extra steps.
• Hybrid works too: a free zone parent with a mainland branch or distributor for local sales.

Compliance and ongoing obligations

One reason people trip up is confusing “easy setup” with “no obligations.” Here’s what continues after you get the license:

• Annual renewal: license, office lease, establishment card, and visas.
• Accounting and audit: most zones now require annual audited financial statements; DIFC requires IFRS-standard reporting; DMCC and others demand timely submissions.
• Corporate tax: file returns. If you claim free zone 0% on qualifying income, maintain substance and documentation.
• VAT: file returns (usually quarterly). Track whether your zone location is a designated zone for VAT on goods.
• Economic Substance Regulations: file notifications and reports if relevant activities apply.
• AML/CFT: if you’re a DNFBP, register with the goAML portal and keep risk assessments, KYC, and STR/SAR processes.

Useful authorities to name-check for rules and updates: Dubai Free Zones Council, Dubai Customs, Federal Tax Authority (FTA), UAE Ministry of Finance, and for finance in DIFC, the DFSA.

Related concepts worth knowing

• Mainland LLC: licensed by the Dubai Department of Economy and Tourism; allows direct onshore trade.
• Designated Zones (VAT): specific fenced free zone areas treated specially for VAT on goods.
• Corporate tax Qualifying Free Zone Person: status that allows 0% on qualifying income if you meet conditions.
• Economic Substance Regulations: tests whether core income-generating activity is in the UAE with adequate people, premises, and expenditure.
• Ultimate Beneficial Owner (UBO) filing: disclose real owners to the free zone and relevant registries.
• Customs codes (Importer/Exporter): needed when you move goods through ports/airports.
• Bank KYC: expect source-of-funds checks, contracts, and real activity proof for onboarding.

Proof you actually can trade with the mainland (with caveats)

This trips up a lot of founders. A free zone company can sell to mainland customers, but there are routes:

• Goods: appoint a mainland distributor/importer of record or clear customs yourself. Expect 5% customs duty on CIF and 5% VAT on import, unless exempt.
• Services: contract directly in many cases, but some regulated activities require a mainland license or a branch. Always match license scope with actual work.
• Presence: if you need onshore staff, tenders, or retail, a mainland entity or branch is simpler.

Quick picks cheat sheet

• “I just want a low-cost consultancy with 1 visa.” → IFZA or DSO.
• “I need warehouse next to sea port.” → JAFZA.
• “I need fast air cargo.” → DAFZ.
• “I want credibility for global trading and banking.” → DMCC.
• “I’m launching a regulated fund or fintech.” → DIFC.
• “I’m scaling a logistics hub near the future mega-airport.” → Dubai South.

Yes-there are many Dubai free zones to choose from. If you’re unsure, shortlist 2-3 zones, ask each for their exact activity wording and visa allocation, and compare total year-one cost, not just the license sticker price.

Frequently Asked Questions

How many free zones are in Dubai?

Dubai has over 20 operational free zones, each focused on specific sectors like finance (DIFC), trade (DMCC), logistics (JAFZA, Dubai South), technology (DSO), and air freight (DAFZ). The exact count shifts as new projects launch or merge, but the major ones listed here cover the vast majority of setups.

Can a free zone company sell in the UAE mainland?

Yes, but with structure. For goods, you either appoint a mainland importer/distributor or you clear customs yourself, paying applicable duty and VAT. For services, you can contract with mainland clients, but some regulated services need a mainland license or a branch. If most revenue is mainland, consider a mainland entity or a hybrid setup.

What’s the cheapest free zone in Dubai?

“Cheap” depends on what’s included. IFZA and some DSO packages often show the lowest entry-level license fees for service activities. But compare total year-one: license + registration + flexi-desk + immigration + visas. A slightly higher license in a zone with better banking acceptance or visa quotas can be better value.

Do free zone companies pay corporate tax in the UAE?

Corporate tax at 9% is in force across the UAE. Free zone companies may qualify for 0% on qualifying income if they meet the criteria (substance, audited accounts, qualifying activities and transactions, and not electing into the mainland regime). Income that does not qualify is generally taxed at 9%. Always verify current rules with the UAE Ministry of Finance and the Federal Tax Authority.

How many visas can I get with a free zone company?

It depends on your leased space and the free zone’s policy. Flexi-desk packages often allow 1-3 visas. A small private office might allow 4-6. Warehouses and larger offices scale much higher. If you need many visas, plan for a proper office or warehouse rather than a flexi-desk.

Which free zone is best for trading precious metals or commodities?

DMCC is the usual choice for commodities thanks to its ecosystem, compliance frameworks, and reputation. For heavy logistics, JAFZA also works when you need warehousing and port proximity. Your decision often hinges on whether the value is in structured trade finance and relationships (DMCC) or in physical logistics (JAFZA).

Is DIFC only for banks and funds?

No. DIFC is a full business district with law firms, consulting firms, tech companies, and regional HQs. That said, if you plan regulated financial services, expect DFSA authorization, higher costs, and longer timelines. Many choose DIFC for its common-law courts and credibility with investors and global banks.

Do I need an audited financial statement in a free zone?

Increasingly yes. Most major Dubai free zones now ask for annual audited financials for license renewal. DIFC requires audits under IFRS. DMCC and others also require timely submissions. Budget for audit from year one so you’re not scrambling later.

How long does it take to set up a free zone company?

Simple service companies in zones like IFZA or DSO can be licensed in 1-3 weeks if documents are clean. DMCC is usually 2-4 weeks. DAFZ/JAFZA with warehouse leases can take longer due to facilities and inspections. DIFC (especially regulated entities) can take months, given approvals and fit-outs.

Last check before you decide: confirm your exact activity wording with the zone, ask for the visa count tied to your chosen space, price the full first year, and make sure your banking story is watertight. When these four line up, setup in Dubai is a lot smoother.