Step-by-Step Guide to Starting a Freezone Business in Dubai (2025 Edition)

Dubai continues to attract entrepreneurs, startups, and global businesses with its pro-business environment, strategic location, and tax benefits. Among the most popular options for entrepreneurs is establishing a freezone business setup. Free zones in the UAE offer 100% foreign ownership, tax exemptions, simplified setup processes, and a host of other incentives. In this 2025 edition, we walk you through everything you need to know to start a business setup in UAE free zone—including licensing options like JAFZA, DAFZA, IFZA, and DUQE Dubai.

What is a Freezone Business Setup?

A freezone business setup refers to forming a company in a designated economic zone within the UAE that offers special tax, customs, and ownership advantages. Each free zone is governed by its own regulations and offers licenses based on the nature of the business activity.

Key benefits include:

• 100% foreign ownership (no local sponsor required)

• Full repatriation of profits and capital

• No personal or corporate income taxes

• Easy visa services

• State-of-the-art infrastructure

With over 40 free zones across the UAE—each catering to different industries—entrepreneurs can choose one based on their target market, budget, and business activity.

Step 1: Choose the Right Freezone

Not all free zones are created equal. Each has its focus area, fee structure, and business infrastructure. Here are some top choices for 2025:

1. JAFZA Company Formation (Jebel Ali Free Zone Authority)

JAFZA is one of the oldest and largest free zones in Dubai, ideal for logistics, manufacturing, and international trade. It offers proximity to Jebel Ali Port and Al Maktoum International Airport.

2. DAFZA Company Setup (Dubai Airport Freezone Authority)

DAFZA is best suited for businesses involved in aviation, IT, electronics, and luxury goods. Its location next to Dubai International Airport makes it ideal for import-export businesses.

3. IFZA (International Free Zone Authority)

IFZA license cost is one of the most affordable in the UAE, making it ideal for startups and SMEs. It offers flexible packages and allows for a wide range of activities including consultancy, trading, and media services.

4. DUQE Dubai Freezone

DUQE Dubai is a relatively new yet rapidly growing free zone located in Queen Elizabeth 2, offering modern solutions for creative industries, consultants, and digital businesses.

When selecting a free zone, consider:

• Type of business activity

• Office space requirements

• Budget

• Access to ports/airports

• Residency visa eligibility

Step 2: Determine Business Activity and Legal Structure

Each free zone has a list of permitted business activities. It’s important to match your intended business operations with the activities authorized in the chosen free zone.

Common legal structures:

• Free Zone Company (FZC)

• Free Zone Establishment (FZE)

• Branch of a foreign/local company

Some free zones like IFZA allow multiple activities under one license, while others are more strict. Define your activity type—commercial, consultancy, industrial, or service—accordingly.

Step 3: Choose and Register Your Business Name

Your trade name must follow UAE naming conventions:

• No offensive or religious references

• Must not duplicate an existing name

• For consultancy or professional firms, your name can be used (e.g., Hammad Ansari Consultancy)

Once you’ve selected your name, register it with the respective free zone authority. Most free zones allow you to check the name availability online.

Step 4: Apply for a Business License

After name reservation, the next step is applying for a business license. The type of license depends on the business activity:

• Commercial License – For trading and general trading

• Professional License – For services and consultancies

• Industrial License – For manufacturing or industrial activities

IFZA License Cost (2025)

One of the most affordable free zones, IFZA license cost starts around AED 12,900 for a zero-visa package and goes up with visa allocations and office requirements.

Each free zone has its own pricing model. For example:

• DAFZA license: Higher-end pricing but excellent infrastructure and location

• JAFZA license: Ideal for heavy industries, warehousing, and port access

• DUQE Dubai: Suitable for digital nomads, freelancers, and creatives

Step 5: Select Office Space

Depending on your business needs and visa requirements, you must choose a suitable office type:

• Flexi-desk or Smart Desk – For freelancers and startups

• Private Office – For SMEs and growing teams

• Warehousing or Industrial Units – For manufacturing or storage businesses

Note: Office space often dictates how many employee visas you can apply for.

Step 6: Submit Documents and Obtain Initial Approval

Here are the standard documents you’ll need:

• Passport copies of shareholders and directors

• Proof of address

• Business plan (in some free zones)

• No Objection Certificate (NOC) from sponsor (if UAE resident)

Submit the application form and documentation to the free zone authority. Upon successful review, you’ll receive the initial approval.

Step 7: Pay the Fees and Collect License

Once you have initial approval:

• Pay the license fee, registration fee, and office rental

• Collect your business license

• Sign lease agreements if required

Payment schedules vary—some free zones offer monthly or annual payment plans. Check if your chosen free zone offers any startup incentives or discounts for 2025.

Step 8: Apply for Visas and Bank Account

After obtaining the license, apply for:

• Establishment card (company immigration file)

• Investor visa and employee visas

Free zones typically allow a specific number of visas based on office size. DUQE Dubai and IFZA are flexible with visa allocations for SMEs.

Finally, open a corporate bank account with a UAE bank. You will need:

• Trade license

• Shareholder documents

• Company stamp

• Business plan (some banks)

Bank account approval may take 1–3 weeks depending on the bank.

FAQs

Q1: How much does it cost to start a free zone business in Dubai in 2025?

A: Costs vary by free zone and license type. On average, a basic IFZA license cost starts from AED 12,900 without visas. More premium zones like DAFZA may cost upwards of AED 30,000–AED 50,000, depending on office space and number of visas.

Q2: Which free zone is best for trading business in Dubai?

A: JAFZA is highly recommended for international and large-scale trading businesses due to its strategic location near Jebel Ali Port. For smaller trading activities, IFZA or DUQE Dubai offer flexible and affordable packages.

Q3: Can I operate outside the free zone with a free zone license?

A: No, a free zone business can only operate within its designated free zone or internationally. To trade directly in mainland UAE, you will need to partner with a local distributor or open a mainland branch.

Conclusion

Starting a free zone business setup in Dubai is a streamlined and entrepreneur-friendly process in 2025. With over 40 zones offering varied benefits, businesses can find the perfect match for their goals—whether it’s the affordability of IFZA, the prestige of DAFZA company setup, the infrastructure of JAFZA company formation, or the innovation focus of DUQE Dubai.

By carefully choosing your business activity, location, and license type, and by following this step-by-step guide, you can establish a successful and fully compliant business setup in UAE free zone.

Whether you’re a solopreneur, SME, or global corporation, the UAE free zone ecosystem offers the flexibility, tax benefits, and global connectivity to fuel your growth in 2025 and beyond.