There are dozens of free zones and they market themselves on price and speed. Neither is a reason to choose one. The zones differ on eight things that matter after incorporation, and a short scoring exercise on those eight is worth more than any brochure. Here is the method we use.
The eight criteria
1. Activity list. Does the zone license your activity under a code that matches your real revenue streams, and does it allow the combination you need — professional and commercial on one entity, for instance? Score zero if the activity is missing; nothing else matters.
2. Visa quota per premises. How many visas does each premises option carry, and what does the next step up cost? Count the people you need in twelve months, not today.
3. Renewal cost. First-year prices are promotional. Ask for the renewal cost on the same specification: licence, premises, visas.
4. Audit requirement. Some zones require audited accounts for licence renewal regardless of turnover. If you will claim Qualifying Free Zone Person status, audited financial statements are mandatory anyway under Ministerial Decision No. 84 of 2025, so the criterion becomes the cost and availability of auditors familiar with the zone.
5. Bank appetite. Banks treat zones differently. Some zones pass onboarding routinely; others attract longer scrutiny and more declines. This is not in any brochure and is established by asking the bank before choosing.
6. Designated zone status. For goods, some zones are designated zones treated as outside the UAE for VAT under conditions. It matters for trading and logistics, not for services, and is checked against the current Cabinet list.
7. Substance feasibility. If you will rely on the free zone 0%, the company must have adequate people, premises and expenditure in the zone. Score how realistic that is for your team in that location, and remember that everything not qualifying is taxed at 9% from the first dirham.
8. Location and logistics. Where the team will actually work, where clients are, and how far the zone is from both.
Scoring it
Rate each criterion for each zone on the shortlist, weight the ones that matter for your model — bank appetite and visa quota for a relocating team, designated zone status for a trader, substance feasibility for a holding claiming 0% — and the answer usually falls out. Where two zones tie, the bank's preference decides.
What zones do not tell you
- That the bank may take months, or decline, for reasons connected to the zone rather than to you
- That the visa quota on the entry package will run out before the first renewal
- That the renewal is priced differently from year one
- That the zone's audit requirement applies even to a dormant company
- That 0% is not the zone's to give; it is a corporate tax status with conditions the company must meet every year
Corporate tax is the same everywhere
The rate does not vary by zone. In every free zone the 0% is available only to a QFZP on qualifying income; non-qualifying income is taxed at 9% from the first dirham; the de minimis cap is the lower of AED 5 million or 5% of revenue; and registration with the FTA is mandatory, with a late-registration penalty of AED 10,000. What varies is how easy and how expensive it is to satisfy substance and audit in that particular zone.
DIFC and ADGM
The two financial centres are a category of their own: common-law systems, own courts and own regulators. Score them only if your structure needs that legal environment — funds, foundations, complex shareholder arrangements, regulated financial services. For operating trade or a consultancy they are an expensive way to get what an ordinary zone provides.
Step by step
- Map real revenue streams and the activity codes they need.
- Eliminate zones that do not license those codes or the combination.
- Count people at twelve months and eliminate zones where the quota needs disproportionate premises.
- Request renewal pricing on identical specifications from the remaining zones.
- Check audit rules and, if QFZP is planned, substance feasibility.
- Run the shortlist past the bank.
- Then pay.
Indicative prices by jurisdiction and a turnkey first-year budget: how much it costs to set up a company in Dubai. The first consultation with LaWEra is free.
Frequently asked questions
Can we move zones later?
It is a re-registration, not a transfer: new licence, new fees, and bank onboarding again. Choosing well once is cheaper.
Is the cheapest zone a bad choice?
Not necessarily. It is a bad choice when the saving on the licence turns into a bank decline and months without an account.
Do we need a presence in the zone to choose it?
Not to choose it. To hold QFZP status and to satisfy the bank, the company's presence in the zone must be real.
This is a general framework, not legal advice. UAE law changes, and procedures differ between emirates and free zones. We review each situation individually.