1111 office, Al Manara Tower, Business Bay, Dubai, UAE P.O. Box 213944 RU
RU
Home Services Understanding Free Zones: Types, Benefits, and Differences

Free Zone — It's Not Just an Address, It's a System

A Free Zone is a special economic zone with its own regulations, licensing, and services. But most importantly: it is a mediator organization between you and government structures. Through it, you register a company, open an office, obtain visas, and interact with authorities.

Today, there are over 45 free zones in the UAE, each with its own rules, focus, and level of service. It's important not just to register "where it's cheaper," but to choose a zone that fits your business and goals.

Get a Consultation Request a Callback

Designated and Non-Designated: What to Choose?

Free zones are divided into two types:

Designated Zones

They have a fence, their own customs, and separate regulations. Often suitable for manufacturing and trading companies that work with import and export. It's a kind of "business city" within the Emirate — with its own laws.

Non-Designated Zones

Located within the city, they may visually look like a regular office center. They are perfect for:

  1. IT and digital business
  2. consulting
  3. online projects
  4. startups
  5. representative offices

Moreover, many large non-designated free zones offer commercial real estate: retail stores, showrooms, beauty salons, cafes, and restaurants. This is an ideal solution for those who want to create a physical brand presence right in the city.

Want to Choose the Right Free Zone? We're Here.

Leave a request — and we'll start building your business story in the Emirates today.

Submit a Request

Small Zone — Small Ceiling

Compact free zones with minimal packages often attract with their price and ease of registration. But it's important to understand: scaling in them is almost impossible. The visa quota is limited (sometimes only 1–2), you can't expand the office, and you can't transfer the company to another zone.

If your business grows, you will either have to open a branch in another jurisdiction or close the company and register a new one. So think strategically from the start.

Office Rental: No Choice

You cannot rent an office in any place you like. Free zones strictly limit the choice — you must rent an office only from their list of properties and at their rates. Bargaining or looking for alternatives is not allowed.

There are only 2–3 free zones in the country that allow renting in the local city area — and even then, with additional payment and approval. Consider this in advance, especially if a specific area is important for your business.

Visas = Square Meters

As many employees as there are office spaces. According to the Ministry of Labor requirements: at least 9 m² per employee. Want 10 visas? Rent at least 90 m².

Free zones build business on visas. The starter package may include only 1 visa, and everything else requires separate payment, conditions, and approvals. Therefore, a cheap start can become costly in the long run.

Compliance: Fast Isn't Always Good

The registration period in a free zone can vary from 3 days to 6 months. Why? It all depends on the level of compliance checks.

  • There are zones where everything is formal: documents are checked superficially, registration is quick.
  • And there are zones with a strong compliance department, where they check the business model, sources of funds, beneficiaries, and may require a business plan.

If your goal is a long-term, sustainable business with a good banking history, it's better to choose a free zone with serious compliance. It may take a little longer, but you will work with confidence.

What About Taxes?

As of June 1, 2023, the UAE has a corporate tax of 9% for all onshore companies, including free zone companies, if their net profit exceeds 375,000 AED per year (about $100,000).

Important

Contrary to popular myth, free zones are not automatically exempt from taxation.

Free zone companies are required to:

  • register with the tax authority;
  • submit financial statements;
  • file tax returns.

There are limited exceptions, but they require meeting specific conditions (e.g., activities exclusively within the free zone or outside the UAE).

Before and After Registration — Two Realities

Before registration, you will receive maximum attention. Free zone staff are prompt, courteous, and ready to explain everything. But afterward, the process may slow down: license renewal, visa processing, support — all this can take weeks.

It's important to consider this. Some zones spend everything on advertising but save on post-service. And there are others — quiet but with perfect customer service. We will help you choose just such a one.

So, the Right Choice of Free Zone Is:

✅ Future Savings

✅ Ease of Scaling

✅ Confidence in Compliance and Taxes

✅ Transparency of All Conditions

✅ Comfort in Work and Support

Get an analysis of your business tasks and a solution from an expert

Form 2 image

Popular Services

On this page
    Not sure which format is right for you?

    Get a free consultation with a MIRAD expert and choose the optimal strategy for your UAE status

    Get consultation Request a call back

    Related articles