Free Zone Business Setup FAQs
1. What is a Free Zone in the UAE?
A Free Zone is a designated area offering 100% foreign ownership, tax exemptions, and simplified company formation processes.
2. How many Free Zones are in the UAE?
There are over 45 Free Zones across all seven emirates, each catering to specific industries.
3. Which is the cheapest Free Zone in the UAE?
Ajman, Sharjah Publishing City (SPC), and RAKEZ are known for their affordable startup packages.
4. Can I own 100% of my business in a Free Zone?
Yes, Free Zones allow 100% foreign ownership with no need for a local sponsor.
5. Can I trade directly in the UAE mainland?
No, Free Zone companies must appoint a mainland distributor or partner to sell within UAE local markets.
6. Can I get a UAE residence visa through a Free Zone company?
Yes, company owners and employees are eligible for residence visas based on office size and license type.
7. What are the main benefits of a Free Zone license?
Tax exemptions, full profit repatriation, simple setup process, and no import/export duties.
8. Do Free Zone companies pay corporate tax?
Most Free Zones offer 0% corporate tax if the business meets qualifying conditions.
9. What types of licenses can I get?
Trading, Service, Industrial, Consultancy, and E-commerce licenses are available.
10. Can I add multiple business activities under one license?
Yes, some Free Zones allow combining up to 10 related activities under one license.
11. Is there a minimum capital requirement?
Many Free Zones have no paid-up capital; others may require AED 10,000–50,000.
12. Do I need an office in the Free Zone?
You can choose a Flexi-desk, shared space, or private office depending on your visa needs.
13. Can I open a UAE bank account?
Yes, after license and establishment card issuance, corporate bank accounts can be opened.
14. How long is a Free Zone license valid?
Licenses are valid for one year and can be renewed annually.
15. Can I hire employees?
Yes, each license includes a visa quota which can be increased with office expansion.
16. Can I move my company to another Free Zone?
Yes, company migration is possible with authority approvals and closure of the previous license.
17. Do I need annual financial audits?
Some Free Zones like DMCC and RAKEZ require annual audits, others don’t.
18. Can I sponsor dependents under my Free Zone visa?
Yes, if you meet the income and accommodation requirements.
19. Can I convert a Free Zone company to Mainland?
Yes, with an NOC from the Free Zone and approval from the DED.
20. Can I register a company remotely?
Yes, most Free Zones support online registration and digital document submission.
21. Is VAT registration mandatory?
Yes, if your company exceeds AED 375,000 annual turnover.
22. Are import duties applicable?
No, Free Zone companies are exempt from import/export duties.
23. Can I get an e-commerce license?
Yes, Free Zones like SPC and IFZA specialize in e-commerce setups.
24. How much does a Free Zone license cost?
It starts from AED 5,500 and can vary up to AED 25,000 depending on business type.
25. Can I apply for Golden Visa with a Free Zone company?
Yes, if you meet the investment and financial requirements.
26. Can I own property through my Free Zone company?
Some emirates allow Free Zone entities to own commercial property in specific zones.
27. Can I open multiple corporate bank accounts?
Yes, you can open accounts with multiple banks after company registration.
28. Can Free Zone companies trade with each other?
Yes, inter-Free Zone trade is allowed without customs duties.
29. What is the difference between FZE and FZCO?
FZE is a single-owner entity, while FZCO (or FZ-LLC) has two or more shareholders.
30. Can I operate globally?
Yes, Free Zone companies are perfect for international trade and online business.
31. Can I change my business activities later?
Yes, you can modify your activities by applying for an amendment approval.
32. Can I sponsor employees of different nationalities?
Yes, there are no restrictions on nationality for Free Zone employees.
33. Is an NOC required to open a bank account?
Usually not; your license and establishment card are sufficient.
34. Do Free Zone companies need advertising approval?
Yes, marketing materials must comply with UAE media regulations.
35. Can Free Zone companies participate in tenders?
Not directly; you need a mainland partner to bid for government tenders.
36. Can I hire freelancers?
Yes, if they have a valid UAE freelance permit.
37. Are Free Zone companies suitable for consultants?
Yes, consultancy licenses are ideal for professionals and advisors.
38. Can I open without visiting UAE?
Yes, many Free Zones allow full remote setup via digital signature and Power of Attorney.
39. Can I change shareholders?
Yes, shareholder changes are permitted through proper documentation.
40. Do Free Zone companies need renewal every year?
Yes, all licenses and visas must be renewed annually.
41. Can Free Zone companies own other companies?
Yes, many Free Zones allow holding company structures.
42. Can I register multiple branches?
Yes, you can establish multiple branches within the same or different Free Zones.
43. What documents are needed for registration?
Passport copies, business plan, and proof of address are the basic requirements.
44. Can I use a Free Zone address for import/export?
Yes, you can import/export goods through your Free Zone office address.
45. Are there Free Zones for tech startups?
Yes, Dubai Internet City and Sharjah Research Park cater to tech businesses.
46. Can I transfer shares?
Yes, share transfers are allowed with Free Zone authority approval.
47. Can I get office space upgrade later?
Yes, you can upgrade or relocate within the Free Zone anytime.
48. Can Free Zone companies issue invoices in AED?
Yes, invoicing in AED or foreign currency is allowed.
49. Can I keep profits in my home country?
Yes, 100% profit repatriation is permitted from Free Zones.
50. Can I operate my Free Zone company from abroad?
Yes, remote operation is fully allowed using digital management tools.