The UAE has more than forty free zones, each with its own regulator, fee schedule, permitted activities and reputation with banks. Choosing between them on advertised price alone is the most common reason companies end up restructuring within their first two years.
This comparison sets out how the leading zones differ in practice — the activities they suit, the visa quotas they allow, how banks view them, and the real cost of a licence once workspace and visa allocations are included.
How to choose a free zone
Start from four questions: what activity will be licensed, how many residence visas are needed in the next two years, whether physical space or a flexi-desk is required, and which bank you realistically want to open with. Those four answers eliminate most of the list immediately.
Location still matters for anything physical. If you handle cargo, being inside a logistics zone next to a port or airport removes customs friction that no amount of paperwork will fix later.
- Activity match — check the zone's approved activity list before paying anything
- Visa quota — confirm the tier that supports your two-year hiring plan
- Workspace — flexi-desk, shared office or warehouse availability
- Banking reputation — some zones onboard noticeably faster than others
- Renewal cost — year two is what matters, not the promotional first-year price
Leading UAE free zones compared
| Free zone | Best suited to | Indicative licence from (AED) |
|---|---|---|
| DMCC (Dubai) | Commodities, trading, professional services, prestige address | 34,000 |
| IFZA (Dubai) | Cost-efficient consultancy and trading, flexible visa tiers | 12,900 |
| Meydan (Dubai) | E-commerce, consultancy, small trading, central address | 14,000 |
| DAFZA (Dubai) | Aviation, high-value logistics, regional HQs | 35,000 |
| JAFZA (Dubai) | Import/export, warehousing, manufacturing at Jebel Ali port | 30,000 |
| SHAMS (Sharjah) | Media, creative, freelancers and startups | 8,500 |
| RAKEZ (Ras Al Khaimah) | Industrial, manufacturing, budget-sensitive trading | 11,000 |
| ADGM (Abu Dhabi) | Financial services, funds, holding companies under common law | Varies by category |
Understanding the real cost
Promotional prices normally cover a zero-visa licence with a shared desk. Adding visa allocations, an establishment card, medical and Emirates ID processing, and a genuine desk or office typically increases the first-year figure by AED 8,000 to AED 25,000.
Renewal pricing is the number to check before signing. Some zones discount the first year heavily and renew at a materially higher rate; others hold pricing flat, which is preferable for a business planning to stay put.
Free zone choice and banking
Banks maintain internal risk views of jurisdictions. A licence from a well-known, well-regulated zone paired with a clear business model, real workspace and a resident signatory opens accounts faster than an ultra-low-cost licence with no physical presence.
If banking is time-critical — for example because a client contract requires a UAE IBAN within a month — that consideration should outweigh a few thousand dirhams of licence saving.
Free zones and corporate tax
Free zone companies are not automatically exempt from corporate tax. The 0% rate applies to a Qualifying Free Zone Person earning qualifying income and meeting substance and transfer-pricing requirements; income sourced from mainland customers generally falls outside the qualifying categories.
Every free zone entity must still register for corporate tax and file a return, whether or not tax is payable.
Selling to mainland customers from a free zone
A free zone company can invoice mainland customers for many service activities, but physical goods entering the mainland attract customs duty and some regulated services require a mainland presence. Where mainland revenue is expected to dominate, a mainland licence or a dual structure is usually the cleaner answer.
Matching the zone to the business
- Consultancy or agency with overseas clients: IFZA, Meydan or SHAMS
- Commodity trading or a prestige Dubai address: DMCC
- Import, export and warehousing: JAFZA or RAKEZ
- Aviation and time-sensitive logistics: DAFZA
- Regulated financial services or fund structures: ADGM or DIFC
Frequently asked questions
Which free zone is cheapest in the UAE?
SHAMS in Sharjah and RAKEZ in Ras Al Khaimah are typically the lowest-cost options, with licences starting around AED 8,500 to AED 11,000 for a zero-visa package.
Which free zone is best for trading?
DMCC for commodities and general trading with a strong banking profile, JAFZA for port-based import and export, and RAKEZ where cost efficiency matters most.
Can a free zone company trade in mainland UAE?
For many services, yes, by invoicing directly. Physical goods entering the mainland attract customs duty, and some regulated activities require a mainland licence or branch.
Do free zone companies pay corporate tax?
They must register and file. A 0% rate applies only to qualifying income of a Qualifying Free Zone Person that meets substance and transfer-pricing conditions.
How many visas can a free zone company get?
Quota depends on the package tier and workspace, ranging from zero on a basic licence to a dozen or more with a leased office.
Can I change free zones later?
You cannot transfer a licence between zones. The practical route is to incorporate in the new zone and liquidate the old entity properly.
Is a flexi-desk enough to open a bank account?
Sometimes, but banks apply extra scrutiny. A real desk or office, a UAE-resident signatory and documented contracts materially improve approval odds.
Which free zone should a startup choose?
One that matches the activity and visa needs at a renewal price you can sustain. IFZA, Meydan and SHAMS are the most common startup choices.