If you’re an entrepreneur or investor considering launching a company in the United Arab Emirates, setting up in a Free Zone can be an excellent choice. Known for their ease of setup and investor-friendly policies, UAE free zones attract thousands of international businesses every year.
In this article, we’ll explore the key features of free zone companies, how they differ from other setups, and what tax responsibilities you should be aware of — especially if you’re looking for reliable accounting services in Emirates.
🧩 What is a free zone company?
A Free Zone Company (FZC) is a business entity established within a designated economic zone that offers 100% foreign ownership, custom benefits, and simplified administrative procedures.
There are over 45 free zones across the UAE, each tailored to specific industries like tech, logistics, media, and finance. Examples include:
- Dubai Multi Commodities Centre (DMCC)
- Dubai Internet City
- RAKEZ (Ras Al Khaimah Economic Zone)
- Abu Dhabi Global Market (ADGM)
These zones are particularly attractive to foreign investors looking to access global markets from a strategic location with supportive regulation — and expert help from an accounting office in Dubai can make the process even smoother.
💼 Key advantages of Free zones
- 100% Foreign Ownership – No need for a local partner or sponsor.
- Tax Benefits – Many free zones offer long-term tax holidays (0% corporate tax).
- Easy Setup – Company formation can often be completed in a matter of days.
- Visa Eligibility – Get residency visas for you and your employees.
- Modern Infrastructure – Access to office spaces, warehouses, and coworking areas.
💸 Tax overview for Free zone companies
🏛️ Corporate tax
Starting from June 2023, a 9% corporate tax applies in the UAE, but many free zone companies remain exempt — provided they meet specific conditions:
- Must not conduct business with the UAE mainland (or must do so via a distributor).
- Must maintain adequate substance in the free zone (e.g., office, employees).
- Must derive qualifying income as defined by the UAE Ministry of Finance.
Our team at Qualira – a trusted accounting office in Dubai – can help you determine whether your free zone company qualifies for the 0% corporate tax rate.
🧾 VAT (Value-added tax)
Even though many free zone companies benefit from corporate tax exemptions, VAT at 5% still applies in most cases if:
- Your turnover exceeds AED 375,000/year.
- You provide goods or services to the mainland or internationally.
Navigating VAT registration, filing, and compliance can be complex, which is why many businesses rely on professional accounting in Emirates to stay compliant.
🚫 Limitations of Free zones
While free zones offer many benefits, there are some limitations to consider:
- No direct trading with the UAE mainland unless through an authorized distributor or mainland branch.
- Each free zone has its own regulations — choosing the right one matters.
- Visa quotas are limited and tied to the size/type of office space leased.
📊 Final thoughts
Free Zone Companies are a smart choice for international entrepreneurs looking to establish a presence in the UAE with minimal restrictions and maximum benefits. Whether you’re a freelancer, a tech startup, or an established brand, free zones offer scalability, tax efficiency, and strategic positioning.
At Qualira Accounting, we specialize in helping free zone businesses thrive with tailored services in accounting in Emirates, compliance, and tax advisory. Let us handle the numbers while you focus on innovation.
👉 Get in touch today and let’s explore the best free zone option for your business.
Your Team
Qualira Accounting Office in Emirates
info@qualira.ae
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