Starting a Free Zone LLC in Dubai 

Dubai’s Free Zone LLC in Dubai structures draws in international investors. In Dubai, a Free Zone LLC (also known as an FZCO company Dubai or FZ-LLC) offers full repatriation of profits, zero personal income tax, and 100% foreign ownership. In Dubai, a free zone limited liability company UAE can be established in 5–10 days for AED 18,000–35,000. Ideal for consultancy, e-commerce, trading, and IT Business setup in Dubai free zone. 

This 2026 guide covers the finest free zone in Dubai for startups, business setup in the free zone, Dubai free zone company registration, and free zone company formation in Dubai.   

Why Foreign Investors Favour Dubai Free Zone LLC Structures   

Due to the unparalleled benefits, investors choose to establish a Dubai free zone company. 100% foreign ownership Dubai means no local partner needed. Zero personal income tax saves thousands yearly. Dubai Department of Economy and Tourism (DET) guarantees a stable legal framework. World-class banking connects to global markets. The UAE’s D33 Economic Agenda aims to build an AED 32 trillion economy by 2033.  

Economic Role of Free Zones in Dubai’s GDP  

Dubai’s free zones play a massive role in the city’s economy. They drive 40% of Dubai’s non-oil GDP and handle $200 billion+ in annual trade. Jafza alone generated AED 713 billion in non-oil trade in 2024 (15% growth).   

Key Contributions:  

• 36% of Dubai’s GDP from Jafza + Jebel Ali Port combined.  

• DMCC Free Zone: 9.6% GDP contribution, world’s #1 free zone for 3 years running.  

• Free zones support 500,000+ jobs (27% Dubai’s total employment).  

• Over 20 years, more than AED 110 billion in investment was attracted.   

Dubai Economic Agenda D33 (an economy of AED 32 trillion by 2033) is driven by free zones. They promote industrial development, draw foreign direct investment, and build robust trade infrastructure. Through trade and services, Dubai’s more than 30 free zones cluster sectors (commodities in DMCC, technology in DIC), accounting for 58.6% of the emirate’s GDP.   

A Free Zone LLC (FZ-LLC or FZCO): What Is It?  

A Free Zone LLC in Dubai limits the owner’s liability to the share capital. FZCO handles 2-50 shareholders. The FZCO company’s Dubai structure offers flexibility. Unlike FZE (single owner), FZ-LLC scales easily with partners.  

Legal Framework Governing Free Zone LLC Companies  

Each free zone sets rules. Dubai Multi Commodities Centre (DMCC), Jebel Ali Free Zone (JAFZA), and Dubai Airport Free Zone (DAFZA) govern their respective areas. The Memorandum of Association (MOA) and Articles of Association (AOA) define operations. Every year, the Ultimate Beneficial Owner (UBO) must be declared.   

Selecting the Appropriate Free Zone for Your Sector:  

• Commodities & Trading: DMCC, JAFZA   

• Intelligence & Technology: Dubai Internet City (DIC)   

• Dubai Media City for Media & Creative; DAFZA for Logistics & Import-Export   

• Meydan Consulting & Professional Services: Dubai Knowledge Park   

• E-commerce & Dropshipping: IFZA   

For tax benefits, local offices and employees are required under substance rules.   

Choosing an Appropriate Business Activity Code   

Ten to fifteen activities per license are permitted in free zones. Multi-activity packages available. Restricted activities include banking, insurance, and healthcare. High-risk codes trigger extra bank scrutiny. 

Complete Cost of Free Zone LLC in Dubai (2026) 

Cost Item	Budget Range (AED)	Premium Range (AED)	Details
License Fee	9,000 – 12,000	15,000 – 35,000	Main annual fee. Trading licenses higher. Service/e-commerce lower.
Registration & Name	1,000 – 1,500	2,000 – 2,500	One-time company entry + trade name approval.
Establishment Card	800 – 1,200	1,500 – 2,000	MOHRE registration for visas.
Visa Costs (per person)	3,500 – 4,000	4,500 – 5,000	Investor + 1-2 employees. Includes file opening.
Medical Test + Emirates ID	1,200 – 1,500	1,500 – 1,800	Per person residency processing.
Office/Flexi Desk	5,000 – 10,000	15,000 – 35,000+	Flexi desk (budget) vs physical office/warehouse.
Immigration File	1,000 – 1,500	1,500 – 2,000	GDRFA processing fees.
Bank Account Compliance	50,000 deposit	100,000+ deposit	Minimum balance required by banks.
TOTAL FIRST YEAR	18,000 – 25,000	30,000 – 50,000+	1-2 visas + flexi desk included.

Hidden Costs Most Consultants Don’t Explain  

Renewal increases 10-15% yearly. Qualifying Free Zone Person audits cost AED 8,000-15,000. Corporate tax advisory AED 5,000+. ESR filings AED 3,000. Office upgrades AED 20,000+. Late penalties AED 20,000+.  

Step-by-Step Process of Free Zone LLC Registration   

Step 1: Verify Business Operations   

Choose your primary business (e-commerce, trading, or IT consultancy) and align it with the free zone’s capabilities. Verify the 10–15 sub-activities permitted by each Dubai free zone license. Erroneous decision = denial.   

Step 2: Choose the Free Zone Authority   

Select by industry: DIC (tech), JAFZA (logistics), IFZA (budget startups), and DMCC (commodities). Each has its own visa quotas and expenses.   

Step 3: Approval of Trade Names   

Enter two or three business names online. Don’t use “Royal” or deceptive language and limit your word count to three. Approval (AED 300-500 fee) in 1-2 days.   

Step 4: Uploading the Application for Initial Approval 

• Copies of each shareholder’s passport   

• Evidence of address   

• (Optional in budgetary zones) Business strategy  

• Activity-structure fit is reviewed in the free zone. Processing takes two to three days.   

Step 5: Execute the Lease Agreement Select  

• Flexi desk (1-2 visas, AED 5k-10k/year)   

• Physical office (3-6 visas, AED 15k-35k)   

• Warehouse (AED 25k+, trade only)   

• Sign the tenancy agreement.   

Step 6: Draft and Sign Legal Papers   

Drafts of free zones:   

• Memorandum of Association (MOA): management, ownership, and shares   

• Operations of the Articles of Association (AOA)   

• Declaration of ultimate owners (UBOs)   

• Notarize if necessary. One to two days.   

Step 7: Issue a License and Pay Fees   

Pay for the entire bundle, including the license, registration, and establishment. Get:   

• License to trade   

• Incorporation Certificate   

• Company stamp two days following confirmation of payment.   

Step 8: Obtain an Establishment Card  

Use the Ministry of Human Resources and Emirati Labour (MOHRE) free zone “one-stop shop” to submit an application. required for visas. 800-2,000 AED for one day.   

Step 9: Visa Processing   

Apply for:   

• Investor visa for three years   

• Visas for employees (office-based quota)   

• Family sponsorship  

• 7–14 days via GDRFA, which includes Emirates ID and medical testing.   

Step 10: Create a Business Bank Account   

After the KYC interview, provide your license, MOA, passports, and lease to Emirates NBD/Mashreq. AED 50k–100k is the minimum balance for 7–21 days.   

  

Free Zone LLC’s Corporate Tax, VAT, and Compliance   

Do Businesses in Free Zones Have to Pay Corporate Tax?  

9% corporate tax applies if profits exceed AED 375,000. Qualifying Free Zone Person status gives 0% tax on qualifying income (non-UAE sourced). Mainland income is taxed normally.  

VAT Registration Requirements  

5% VAT is mandatory for turnover above AED 375,000. Quarterly filing. Voluntary registration is available below the threshold.  

Economic Substance & Audit Requirements  

ESR demands a local office, employees, and decision-making in the UAE. Certain free zones require annual audits. 5-year record retention is mandatory.  

Visa & Residency Advantages  

Investor Visa & Employee Visa Process  

Visa quota based on office size (1-6 visas). An investor visa is valid for 3 years.   

GDRFA is used to process employee visas. Spouses and children under 25 are included in family sponsorship.   

Financial and Banking Configuration   

Creating a Free Zone LLC Corporate Bank Account   

License, MOA, passports, leases, and business plans are all necessary. Banks conduct KYC interviews. Balance must be between AED 50,000 and 100,000. 7–21 days for processing.   

The Reasons Behind Bank Application Rejections   

• High-risk commercial endeavors, such as cryptocurrency, forex, general trading, and gambling   

• Outdated or incomplete paperwork, such as a license that has expired, a missing MOA, or an ambiguous UBO   

• Lack of business substance—only flex desks, no staff, no local operations   

• Uncertain funding source: questionable transactions, lack of evidence of capital origin   

• Choosing the wrong free zone: banks view budget zones as higher risk.   

Market Access & Operational Restrictions   

Does the UAE’s mainland allow free zone LLCs to trade?   

Direct sales to the mainland are not allowed. Direct mainland sales prohibited. Use distributors or register a mainland branch. Dual licensing is possible.  

International Trade Benefits of Free Zone Companies  

100% customs duty exemption. Duty-free warehousing. Simplified re-export procedures.  

Upgrades, Renewal, and Business Growth    

30 days before expiration, renew. updated documents and money. 10–15% of the original price.   

Growing Your Free Zone Business   

By amending the MOA, add shareholders. Increase the number of visas by expanding the office. Include activities. More visas are unlocked via office improvements.    

Risks, Errors, and Compliance Difficulties   

• Selecting the incorrect activity code   

A license and bank account are blocked when banking or insurance is chosen without consent. Fix: Use the free zone activity list as a pre-check.  

• Ignoring corporate tax rules  

Assuming 0% tax forever. 9% applies over AED 375k unless Qualifying Free Zone Person (needs substance). Penalty: AED 20k+ audits.  

• Underestimating renewal costs  

 

First year AED 18k jumps 15% yearly (AED 21k+ Year 2). Late renewal = AED 10k daily fines + license suspension.  

 

• Weak shareholder agreements  

No clear MOA/AOA causes partner disputes. Fix: Lawyer review before signing (AED 2k investment).  

• Banking-activity mismatch  

Banks reject crypto/general trading. Solution: Choose DMCC/JAFZA + strong business plan.  

• No Economic Substance (ESR)  

Flexi-desk + no employees fails tax benefits. Needs: local office, UAE staff, board meetings. Fine: AED 25k+.  

• VAT threshold blindness  

AED 375k UAE sales triggers 5% VAT registration. Quarterly filing missed = AED 20k penalty.  

• UBO declaration delays  

The annual Ultimate Beneficial Owner update missed the license renewal. AED 15k fine.  

Comparing Dubai’s Best Free Zone in Dubai for Startups 

Best Premium Free Zones  

DMCC: AED 25k+, 5-7 days, commodities trading. JAFZA: AED 30k+, logistics.  

Best Budget-Friendly Free Zones  

IFZA: AED 18k, 3-5 days. Meydan: AED 20k, events focus.  

Who Should Avoid a Free Zone LLC?  

Mainland retail, restaurants, construction, regulated finance, and businesses needing a UAE-wide physical presence.  

Dubai Free Zone LLC 2026 Updates  

Mainland Access Expanded  

Free Zone LLCs can now get branch licenses or temporary permits (6 months) to trade directly on the mainland UAE. Accounting must be done separately. Regularization is required by March 2026; fines will apply.   

Proof of Operations Is Necessary   

Everything Dubai businesses require:   

• Lease for a physical unit (no virtual offices)   

• A utility bill that demonstrates ongoing activities   

• The minimum bank balance is AED 50,000.   

Clarity of Corporate Taxation   

For amounts over AED 375k, a 9% tax was confirmed. To qualify as a Free Zone Person, you must:  

UAE staff, in addition to the local office   

• Activities that generate core income (CIGA) in a free zone  

• Non-UAE revenue at 55%+   

Enhanced UBO & ESR   

Updates to the Ultimate Beneficial Owner must be made annually and within 15 days of any changes. Annual Economic Substance Reports are due on June 30.   

Updates to the Law on Commercial Companies (Decree-Law 20/2025)   

• Allowable flexible share classes. 

• Transferring jurisdiction across free zones is simpler.   

• Introduction of non-profit FZ-LLC structures. 

For an updated guide, contact the experts of PRO Services in Dubai. They are licensed business setup consultants in Dubai with over 12+ years of experience in providing PRO Services Dubai.  

FAQs  

Q1: Which Free Zone LLC in Dubai is the most affordable?   

The cheapest free zone LLC in Dubai is offered by IFZA, which charges AED 18,000 in total for a basic service/e-commerce license with a flex desk and one or two visas.   

Q2: How long does it take to set up a Free Zone LLC?  

Free zone company setup Dubai takes 5-10 working days. Premium zones like DMCC take 7 days; budget zones like Meydan hit 3-5 days with complete documents.  

Q3: Can I start a Free Zone LLC without visiting the UAE?  

Yes. Remote Dubai free zone company formation is handled via email and a power of attorney. Free zone authorities handle 90% digitally. Visit only for biometrics/visa stamping.  

Q4: Do Free Zone LLC companies pay corporate tax?  

9% corporate tax applies only on profits above AED 375,000. Qualifying Free Zone Person status (local substance) gives 0% tax on qualifying non-UAE income.  

Q5: How many visas can a Free Zone LLC get?  

1-6 visas based on office size. Flexi desk = 1-2 visas. 200 sqm office = 4-6 visas. Investor + employees + family sponsorship included.  

Conclusion – Is a Dubai Free Zone LLC the Right Choice in 2026?  

Free Zone LLC in Dubai offers 100% foreign ownership, tax efficiency, creation in 5–10 days, and a cost of AED 18–35k. Ideal for e-commerce, technology, and international trade. The strategic D33 location guarantees long-term expansion. For your Dubai free zone company registration, get in touch with business establishment in Dubai free zone specialists right now. 

Contact PRO Services in Dubai for top notch UAE PRO Services.