Cost Breakdown of Starting a Free Zone Business in Dubai
Dubai has established itself as a global business hub, attracting entrepreneurs and investors from across the world. One of the key attractions is the availability of Free Zones—designated economic areas offering business-friendly environments, tax benefits, and streamlined company formation processes. Whether you’re a startup or an established enterprise looking to expand, understanding the cost of setting up a Free Zone business in Dubai is crucial for effective financial planning.
In this comprehensive guide, we’ll explore the cost breakdown, key factors influencing pricing, popular free zones like Meydan Free Zone (MFZ), Duqe Free Zone, IFZA, and more. We’ll also explain the difference between free zone business setup and mainland business setup in Dubai, helping you make an informed decision.
Why Choose a Free Zone in Dubai?
UAE Free Zones are ideal for foreign investors who want 100% ownership, tax exemptions, and simplified procedures. They cater to different industries including trading, media, logistics, IT, and healthcare. Unlike business setup in Dubai mainland, which requires a local sponsor for certain activities, free zone company setup allows full control and easier repatriation of profits.
Here’s what makes freezone business setup in UAE a smart choice:
-
100% foreign ownership
-
No personal or corporate income tax
-
Full repatriation of capital and profits
-
No import/export duties within the zone
-
Streamlined company registration and licensing
Types of Costs in Free Zone Business Setup
Let’s break down the typical costs involved in a company setup in UAE Free Zone:
1. Business License Fee
The cost of the license depends on the type of activity and the chosen free zone. Common license types include:
-
Commercial/Trading License
-
Service License
-
Industrial License
Estimated Cost: AED 10,000 – AED 20,000/year
For instance, the IFZA Business Setup offers one of the most competitive rates, with packages starting as low as AED 11,900.
2. Registration and Incorporation Fees
These are one-time fees paid during the company formation process.
Estimated Cost: AED 3,000 – AED 10,000
Some free zones waive this fee as part of promotional offers, especially in areas like AMCFZ Free Zone or Sharjah Publishing City SPC.
3. Office Space or Flexi Desk
Most free zones require a physical office or at least a Flexi Desk (shared workspace). Options include:
-
Flexi Desk (shared) – AED 4,000 – AED 8,000/year
-
Executive Office – AED 15,000 – AED 30,000/year
Zones like Meydan FZ Dubai and South Freezone Business Setup in Dubai offer affordable and scalable office solutions.
4. Visa Costs
Each business owner and employee must have a visa. Costs include:
-
Establishment Card – AED 1,000 – AED 2,000
-
Investor/Partner Visa – AED 3,500 – AED 5,000
-
Employee Visa – AED 4,000 – AED 7,000
Some zones like Duqe Free Zone offer visa-inclusive packages for added value.
5. Medical and Emirates ID
After the visa is approved, medical fitness tests and Emirates ID issuance are mandatory.
Estimated Cost: AED 1,000 – AED 1,500 per person
6. Additional Services (Optional)
Depending on your needs, you might incur extra costs for:
-
Corporate Bank Account Assistance – AED 1,000 – AED 3,000
-
Document Attestation & Legal Translation – AED 500 – AED 2,000
-
Business Consultancy Services – AED 2,000 – AED 5,000
Sample Cost Breakdown: IFZA Business Setup
Let’s look at a practical example of an IFZA company setup:
| Service | Cost (AED) |
|---|---|
| License Fee (Service License) | 11,900 |
| Registration Fee | 2,000 |
| Flexi Desk | 5,000 |
| Investor Visa (1 Year) | 3,750 |
| Medical & Emirates ID | 1,200 |
| Total | 23,850 |
This is an average estimate; actual prices may vary based on current promotions or business activity type.
Free Zones to Consider in the UAE
There are more than 40 Free Zones in the UAE. Here are some top picks:
1. IFZA (International Free Zone Authority)
Located in Dubai, offering cost-effective solutions and fast processing. Ideal for service-oriented businesses.
2. DMCC Company Setup
One of the most reputable free zones in Dubai, especially for trading and commodities businesses. Offers premium office spaces in JLT.
3. Meydan Free Zone (MFZ)
Located in the heart of Dubai, Meydan FZ offers Flexi Desk options and easy license upgrades.
4. Duqe Free Zone
One of the newest in Dubai, catering to startups with modern co-working spaces and digital services.
5. Sharjah Publishing City (SPC)
A great option for media, publishing, and creative businesses, with a highly supportive infrastructure.
6. Kizad Free Zone
Perfect for industrial, logistics, and warehousing businesses. Offers strategic access to Abu Dhabi ports.
7. AMCFZ Free Zone Company Formation
Focused on media, entertainment, and education, this zone offers excellent niche support.
Mainland Business Setup in Dubai vs Free Zone
| Feature | Mainland | Free Zone |
|---|---|---|
| Foreign Ownership | Up to 100% (depending on sector) | 100% |
| Local Sponsor Requirement | Often required | Not required |
| Office Space | Mandatory physical office | Flexi Desk options available |
| Market Access | Entire UAE & beyond | Limited to free zone & exports |
| Government Tenders | Allowed | Not allowed (generally) |
Mainland business setup in Dubai is ideal for businesses targeting the UAE domestic market, while freezone business setup is perfect for international trading or e-commerce.
FAQs
1. Can I upgrade from a Free Zone to a Mainland license later?
Yes, it's possible to migrate from a free zone business setup to a Dubai mainland business setup, but it involves applying for a new license under the mainland regulations and possibly changing the business structure.
2. How long does it take to set up a company in a UAE Free Zone?
Most free zone company setups can be completed within 5–10 business days, depending on document readiness, business activity, and the specific zone (e.g., Meydan FZ Dubai may be quicker due to digital onboarding).
3. Can I sponsor my family with a Free Zone visa?
Yes. Once you obtain your residency visa through the Free Zone, you can sponsor your spouse, children, and in some cases, parents, as long as you meet the salary and housing requirements.
Conclusion
Starting a free zone business setup in UAE is a strategic move for entrepreneurs seeking cost efficiency, flexibility, and full control of their business. While prices vary by zone, the average investment can range between AED 15,000 to AED 30,000, depending on the scope and services required.
With zones like DMCC, IFZA, Meydan Free Zone, and Sharjah Publishing City SPC, there’s something for every type of business. By understanding the cost breakdown, you can confidently proceed with your free zone company setup, avoid hidden expenses, and plan for future growth.
Whether you’re comparing business setup in Dubai mainland or exploring the vibrant opportunities in the Duqe Free Zone or Kizad, the UAE continues to offer world-class infrastructure and unmatched advantages for global entrepreneurs.
What's Your Reaction?
