How to start a business in Dubai free zone

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Dubai, a global business hub and shimmering star in the Middle East, presents numerous opportunities for budding entrepreneurs and established companies alike. If you’re reading this, chances are you’ve got your sights set on this golden emirate. Specifically, you’re looking at the Free Zones. But what exactly are these Free Zones, and why are they causing such a stir in the business world?

Understanding the Dubai Free Zone

What is Dubai Free Zone?

The Dubai Free Zone is not just a single area, but rather a collection of special economic zones where businesses can operate with more freedom than elsewhere in Dubai. The primary allure? Tax benefits. Companies in these zones often benefit from 100% foreign ownership and complete tax exemption for specific periods. This sounds dreamy, right? It’s one of the main reasons why Dubai has become a magnet for international business.

Benefits of the Dubai Free Zone

Starting a business in the Free Zone isn’t just about tax breaks. The perks are numerous:

  1. No Import or Export Duties: Goods can be imported and exported without hefty duties, making trade more profitable.
  2. 100% Repatriation of Capital and Profits: Investors can take back all their profits and capital, ensuring that the fruits of their labor remain with them.
  3. Modern Infrastructure: The zones are well-equipped with state-of-the-art facilities, logistics, and connectivity. This infrastructure support ensures your business runs seamlessly.
  4. Networking Opportunities: With companies from across the globe operating in these zones, it’s a networking goldmine. Connections, collaborations, and contracts – all under one roof.

Steps to Start Your Business

Choosing the Right Free Zone

It’s not just about diving in; it’s about diving in the right spot. Dubai houses multiple Free Zones, each tailored to specific business types. For instance:

  • Dubai Multi Commodities Centre (DMCC): Perfect for those in commodities trading.
  • Jebel Ali Free Zone (JAFZA): Suited for manufacturing businesses.
  • Dubai Internet City (DIC): Tailor-made for IT and tech businesses.
Free Zone Specialization
Dubai Media City (DMC) Media and Advertising
Dubai Healthcare City (DHCC) Healthcare Services and Pharmaceutical
Dubai Design District (DDD) Fashion and Design

When choosing, consider the nature of your business, proximity to suppliers or customers, and the specific perks offered by each zone. It’s a bit like choosing a neighborhood for a new house, but with more at stake!

Legal Formalities and Paperwork

Before you set up shop, there’s paperwork to tackle. But don’t worry! The Free Zones have streamlined processes to make this as painless as possible. Here’s a basic rundown:

  1. Choose a Legal Entity: Will you be a Free Zone Establishment (FZE), a Free Zone Company (FZC), or a branch of an existing business?
  2. Pick a Trade Name: Ensure your business name reflects your business activity and doesn’t clash with existing names.
  3. Apply for a License: Depending on your business, you’ll need a specific license. For example, a trading business requires a trading license.

Types of Business Licenses

Every business has its own flavor, and accordingly, its own license requirement. Let’s break it down:

  • Commercial License: For trading activities.
  • Service License: For service providers or consultants.
  • Industrial License: For manufacturing or industrial activities.

Having the right license isn’t just about legality; it’s about credibility. It ensures potential partners and customers that you’re playing by the rules and mean business.

Setting Up Your Office Space

Space, where you’ll forge deals, brainstorm innovations, and lead your team, needs careful consideration. Dubai Free Zone offers various office solutions tailored to different business needs:

  1. Flexi-desk Offices: Ideal for entrepreneurs who don’t need a permanent space. These shared spaces allow you to use the facilities on an ad-hoc basis.
  2. Serviced Offices: Fully furnished and equipped spaces that you can move into immediately. Perfect for businesses wanting to hit the ground running without the fuss of setup.
  3. Warehouse Space: For businesses dealing with tangible goods, large storage spaces or warehouses are available, ensuring you have room for your inventory.

Your choice should align with your business model and projected growth. Remember, your workspace reflects your business’s ethos, so choose wisely!

Financial Considerations

Initial Investment and Setup Costs

Dubai promises glitter and gold, but setting up here requires a clear financial plan. Initial costs include:

  1. Registration and Licensing: This varies between zones but is an unavoidable cost to get started.
  2. Office Space Rent: Depending on your choice from flexi-desk to a full-fledged office, this can be a significant portion of your initial expenses.
  3. Visa Processing: If you’re bringing in a team from abroad or need a visa for yourself, factor this in.

However, consider these as investments, not just costs. Dubai Free Zone has lucrative returns if navigated well!

Ongoing Operational Costs

Beyond the setup, you have recurring costs:

  • Annual License Renewal: To keep your business running smoothly.
  • Utility Bills: Depending on your office type and size, these can vary.
  • Employee Salaries: Competitive wages are essential to attract top talent.

A comprehensive budget, factoring in both initial and operational costs, will set you up for long-term success.

Navigating Challenges

Cultural Considerations

Dubai is a melting pot of cultures. While it’s progressive, understanding and respecting local customs is pivotal. A simple gesture like scheduling meetings outside of prayer times can go a long way in building strong local relations.

Adhering to Regulations and Laws

Dubai Free Zone is business-friendly, but it’s not a lawless land. Regularly updating yourself with the latest regulations and ensuring compliance will shield you from potential pitfalls.


Starting a business in the Dubai Free Zone can be the golden ticket for many entrepreneurs. With its vast benefits from tax breaks to networking opportunities, it’s a land of promise. But, like any venture, it requires careful planning, financial foresight, and an understanding of the local landscape. Armed with this guide, you’re one step closer to making your Dubai business dream a reality!


1. Are there any ownership restrictions in Dubai Free Zone?
No, one of the primary benefits of the Free Zone is the ability for foreign entrepreneurs to have 100% ownership of their business.

2. Can I transfer or close my business in the Free Zone?
Yes, businesses in the Free Zone have the flexibility to transfer, sell, or close, but specific procedures must be followed.

3. How long does the business setup process take?
Typically, the process can take anywhere from a few days to a few weeks, depending on the specific Free Zone, the type of business, and the required paperwork.

4. Do I need a local partner to start a business in the Free Zone?
No, unlike the mainland where a local partner (or sponsor) is required, in the Free Zone, you can fully own your business without any local partnership.

5. Are there any tax implications for businesses in the Free Zone?
One of the significant benefits is tax exemption. Most Free Zones offer 100% tax exemption for specific periods, making it highly attractive for foreign investment.