Comparing UAE Free Zones: Which Free Zone Is Right for Your Business? 

Free Zones in the UAE offer an attractive entry point for international companies, foreign SMEs, and startups seeking a cost-efficient and tax-beneficial structure. With over 40 Free Zones across the Emirates, each designed around key sectors such as logistics, media, finance, healthcare, and technology, the choice of jurisdiction requires understanding sector alignment, legal frameworks, licensing models, and the current regulatory updates. 

This article outlines key factors to evaluate when selecting a UAE Free Zone, supporting informed decisions that align with long-term commercial objectives. 

Understanding UAE Free Zones 

Free zones are designated areas that encourage foreign investment by offering full foreign ownership, exemptions from customs duties, and 0% corporate tax on qualifying income and subject to Substance. They also provide VAT exemptions on transactions for goods within the Designated Free Zones, sector-specific infrastructure, and simplified company formation processes. Each free zone is managed by its authority and can specialise in specific industries such as finance, logistics, healthcare, media, or technology. 

Understanding the unique advantages and focus areas of each free zone helps businesses align their operations with the right environment for growth. 

Major UAE Free Zones by Industry 

Key Considerations When Choosing a Free Zone 

Free zones in the UAE differ in licensing frameworks, permitted sectors, visa quotas, and regulatory obligations. Selecting the appropriate jurisdiction depends on a company’s business model, compliance requirements, and market strategy. The following considerations help international businesses assess which free zone best supports their long-term operations. 

1. Industry Activity and License Scope 

Each free zone permits specific business activities. For instance: 

• • DMCC supports a broad spectrum from commodities to crypto trading. 

• • DIFC is ideal for regulated financial services due to its English-law framework. 

• • DHCC licenses healthcare operations including hospitals and research labs. 

2. License Type, Office Options, and Visa Quotas 

Licensing varies by free zone, from flexi-desk packages for freelancers to full physical offices. Visa entitlements range from 1–2 visas per desk to unlimited in zones with larger office commitments. 

Approximate setup costs: 

• • AED 10,000–20,000 (entry-level) 

• • AED 30,000–50,000+ (for office-intensive or regulated sectors) 

3. Location and Connectivity 

Logistics firms benefit from proximity to transport hubs: 

• • JAFZA: Next to Jebel Ali Port (sea freight) 

• • DAFZA: Adjacent to Dubai International Airport (air cargo) 

• • Meydan Free Zone: Offers a central location for retail and consulting businesses 

4. Legal and Regulatory Framework 

Some free zones, such as DIFC and ADGM, operate under English common law, preferred by international investors. Others follow UAE civil law, requiring compliance with AML, and UBO regulations. 

5. Access to the UAE Mainland 

The recent Dubai Resolution No. 11 of 2025 allows eligible free zone companies to operate onshore through Dubai Economic Department (DET) licenses under one of three models: 

• • Branch with office in mainland Dubai 

• • Branch without office, retaining operations in the free zone 

• • Temporary DET license (valid for 6 months) for project-based activity 

This development significantly broadens the commercial scope of free zone companies without necessitating full migration to the mainland. 

6. Corporate Taxation and Compliance 

Under the UAE Corporate Tax Law, free zone companies that qualify as Qualified Free Zone Persons can benefit from 0% tax on qualifying income. Non-qualifying income is taxed at the standard 9% rate. 

Companies must demonstrate: 

• • Adequate economic substance 

• • Revenue from qualifying activities (e.g., manufacturing, logistics, fund management) 

• • Separate accounting for qualifying and non-qualifying income 

7. Business Support and Infrastructure 

Free zones often provide sector-specific support such as startup incubators, advisory services, and funding access. DIC, for example, supports over 1,200+ tech firms, while Shams is positioned as a creative hub for content producers. 

 UAE Free Zones at a Glance  

The following table compares licensing scope, tax treatment, visa capacity, and sector strengths across major UAE free zones. It is designed to help companies assess which jurisdiction best aligns with their business model and compliance requirements. 

How to Set Up in a UAE Free Zone 

Once a suitable free zone is selected based on commercial and regulatory alignment, the setup process involves the following key steps: 

1. 1. Select Free Zone – Align the jurisdiction with sector focus, ownership needs, and long-term priorities. 

2. 2. Choose Legal Entity – Register as a Free Zone Establishment (FZE), Free Zone Company (FZC), or branch, depending on ownership structure and expansion plans. 

3. 3. Reserve Trade Name – Submit preferred business names in line with UAE naming conventions and free zone guidelines. 

4. 4. Apply for Business License – Select the appropriate license category based on the approved activity and operational requirements. 

5. 5. Secure Office or Workspace – Choose from flexi-desks, shared workspaces, or full office units based on visa needs and regulatory conditions. 

6. 6. Fulfil Compliance Requirements – Prepare for ESR, UBO, AML filings, and obtain any sector-specific or third-party approvals. 

7. 7. Obtain License and Begin Operations – Once approvals are completed, receive the license and commence business activities. 

Typical Setup Timeline: 

Setup duration ranges from 7 to 30 working days, subject to the free zone authority, license type, and completeness of documentation. 

Conclusion 

UAE free zones remain a strategic choice for international businesses, offering full foreign ownership, simplified setup, and access to regional and global markets. Recent regulations like the Corporate Tax Law and Dubai Resolution No. 11 enable free zone companies to expand onshore activities through approved licenses.  

Selecting the right free zone depends on matching a company’s operational needs with licensing options, legal frameworks, infrastructure, and costs. From DMCC’s trading hub to DIFC’s financial district and Shams’ creative focus, the UAE provides tailored solutions for diverse business models. 

About SimplySolved 

SimplySolved is an ISO 9001, 27001, and 42001 certified Corporate Services Provider supporting local or foreign SMEs, startups, and subsidiaries entering the UAE market. From free zone selection and company formation to visa processing, DET licensing, and compliance, our advisory team ensures complete alignment with UAE commercial laws, governance frameworks, and tax regulations. We operate across multiple lines of business including Company Formation, Finance & Tax (FTA Tax Agents) and HR & Payroll to offer our clients full support from planning to operational support.  

Partner with SimplySolved to build a compliant and reliable foundation for your UAE business and support to manage key Account, Tax and HR/Payroll operations.  

While this guide provides high-level guidance, it is not a substitute for tax or legal advice, and we encourage you to seek advice regarding the specific matters that concern you. If you wish to speak to us, you may contact us directly.