Glossary · Free Zone
What Is Free Zone in the UAE
A free zone is a designated area of the UAE where companies are licensed by the zone's own authority instead of the emirate's DED. Free-zone companies get 100% foreign ownership, custom tax rules and remote incorporation — in exchange, direct trade inside the UAE mainland is restricted.
Why it matters
Why it matters when opening a company
For most international founders a free zone is the fastest and cheapest route to a UAE company: licenses start around AED 5,500 and are issued in days, fully remotely.
Each zone sets its own activity catalog, visa quotas and fees — which is why the same business can cost AED 6,000 in one zone and AED 13,000 in another.
Mini-FAQ
Common questions
Can a free-zone company do business inside the UAE?
It can trade within its zone and internationally. To sell directly in the mainland market it needs a local distributor or a mainland branch.
Do free-zone companies pay taxes?
Yes — 9% corporate tax above AED 375,000 of profit and 5% VAT once registered; qualifying income of qualifying free-zone entities can stay at 0%.