Thinking of setting up a business in Dubai? A Free Zone License is one of the best options for many entrepreneurs. Free zones offer many advantages, but they also have costs and rules. This guide will help you understand what a free zone license is, what you get, how much it costs, and how to make a smart choice.
What is a Free Zone License?
A free zone license is a license issued by one of Dubai’s many free zones, allowing a company to operate under that free zone’s authority. Businesses with a free zone license enjoy special benefits like:
- 100% foreign ownership
- Specific tax advantages
- Faster setup and simplified operations
- Strategic infrastructure and location (ports, airports, etc.)
But note: free zone companies often face restrictions on whether they can directly trade or deliver services to the mainland without a local partner, depending on the free zone. Bizinvestfirm+2companyformationindubai.com+2
Benefits of Having a Free Zone License in Dubai
Here are the main benefits:
- Full Ownership & Capital Repatriation
As an investor, you can own 100% of the business. Profits and capital can be moved or repatriated freely. dubaifreezonebusiness.com+1 - Tax Incentives
Many free zones offer 0% corporate tax and no personal tax under conditions (especially for companies doing business only within free zones/internationally, and if you meet certain criteria). dubaifreezonebusiness.com+2Felix Happich+2 - Ease of Setup & Speed
The licensing, registration, visa processes, and approvals are streamlined. Many free zones issue business licenses in a few days. dubaifreezonebusiness.com+2Bizinvestfirm+2 - Flexible Office Options
Options like virtual offices, flexi-desks, shared offices reduce the cost of having a full physical office, especially at the beginning. Persian Horizon+2Bizinvestfirm+2 - Strategic Infrastructure & Global Connectivity
Free zones are often located near ports, airports, or specialized industry clusters. This helps for logistics, trade, and business exposure. Infibiz+2Bizinvestfirm+2 - Visa Eligibility
Free zone licenses typically allow you to sponsor visas for yourself, employees, and sometimes family, depending on the package you select. SPC+2Bizinvestfirm+2
Types of Free Zone Licenses
The cost and requirements of the license depend heavily on the license type. Some common types:
| License Type | Typical Use Cases |
|---|---|
| Commercial / Trading License | Import/export, general trade, buying/selling goods. companyformationindubai.com+1 |
| Professional / Services License | Consultants, IT services, digital businesses, freelancers. Felix Happich+1 |
| Industrial / Manufacturing License | Factories, production, storage, industrial operations. Felix Happich+1 |
| E-Commerce License | Online stores, digital platforms, services delivered online. SPC+1 |
| Tourism / Creative / Specialized | Travel agencies, media, agriculture/food processing in specialized free zones. Felix Happich |
How Much Does a Free Zone License Cost?
Costs vary a lot depending on which free zone you choose, your business activity, visa requirements, office space needed, etc. Here are typical cost ranges and what impacts them.
Cost Ranges
| License Type / Package | Approximate Cost (AED) |
|---|---|
| Basic / service / small-scale professional license | AED ~ 7,000 – 15,000 companyformationindubai.com+2SPC+2 |
| E-commerce / trading license | AED ~ 10,000 – 25,000 companyformationindubai.com+2SPC+2 |
| Industrial / manufacturing license | AED ~ 20,000 – 50,000+ Felix Happich+1 |
| Premium free zones / high visa packages / large office space | Can go higher depending on zone, size, activity. Infibiz+1 |
Other Costs to Include
- Trade name reservation fees. Felix Happich
- Registration or establishment card fees. Dubai Start Business+1
- Office space cost (virtual office, flexi desk, private office). Felix Happich+1
- Visa cost for owners/employees. companyformationindubai.com+1
- Renewal fees (annual). dubaifreezonebusiness.com+2companyformationindubai.com+2
- Miscellaneous – audits, bank account fees, compliance. dubaifreezonelicense.com+1
Example Free Zone License Costs
- IFZA Dubai: Licenses with different visa quotas: zero-visa, 1-visa, 2-visa etc. Prices start from around AED 12,900 for a zero-visa license in some packages. Dubai Start Business+1
- SPC Free Zone: Some of the lowest cost flexi/virtual office packages begin at ~ AED 5,750. Bizinvestfirm+1
- JAFZA license costs for commercial / trading are up around AED 15,000-25,000+ for 1-visa licences etc. Persian Horizon+1
Process: How to Get a Free Zone License
Here are general steps you’ll follow:
- Decide on Free Zone
Pick the free zone based on your business activity, cost, visa requirement, office requirement. - Select License Type / Activities
Choose what activities your business will do, because license fees depend on that. - Company Name Reservation
Reserve your trade name under the free zone’s rules. - Prepare & Submit Documents
Common documents include passport copies, business plan, proof of address, application forms, sometimes background checks. - Choose Office Space
Decide if you need virtual office / flexi desk / full private office, etc. - Get Approvals & Pay Fees
Submit fees (license, registration, visa if applicable) once your documents are approved. - Visa Applications (if needed)
Apply for visas for yourself / employees as per the visa quota in your package. - Renew Annually
License, visas, office lease etc need to be renewed each year.
Things to Consider & “Watch Outs”
- Renewal Costs can sometimes be higher than the first year. Be sure to check what renewal fees are. dubaifreezonelicense.com+1
- Visa restrictions: Some free zones include few or no visas; adding visas adds cost.
- Trading to Mainland: Free zone companies often cannot sell directly to mainland UAE unless through special arrangements, distributor, or dual license.
- Hidden Fees: Bank account opening, audit, establishment cards, utility deposits etc.
- Corporate Tax Law Changes: With UAE’s introduction of corporate tax, free zone companies must check if they qualify for “Qualifying Free Zone Person” status to retain 0% tax on certain incomes. dubaifreezonebusiness.com+1
Final Thoughts
A Dubai Free Zone License is an excellent option for many businesses, especially those focused on international trade, services, tech, e-commerce, or wanting full ownership. The benefits are strong: transparency, tax advantages, visa options, flexibility. But costs, hidden fees, renewal terms, and business activity rules can differ a lot by free zone.
If you like, I can compare 3-4 of the best free zones in Dubai for your specific business type (e.g. e-commerce, consultancy) so you can see side by side what will cost you and what