UAE Free Zone Companies — TFZ
50+ statutory zones,
one legal framework
Guaranteed foreign ownership, and the 0% Qualifying Free Zone regime — explained by TFZ.
Free zone entities enjoy statutory guarantees that made the UAE a global magnet for international business: full foreign ownership, repatriation of capital and profits, customs advantages, and — where strict conditions are met — a 0% corporate tax rate on qualifying income.
Get a statute-referenced recommendation →How Many Free Zones, and Under What Authority?
The UAE hosts more than 50 free zones across the seven emirates, over 25 in Dubai alone. Each is created by legislative instrument and issues its own companies regulations governing incorporation, licensing and governance within its territory.
Approximately 42% of Dubai businesses operate from free zones. Financial free zones — DIFC and ADGM — are constitutionally distinct, with their own civil and commercial laws and courts, and are a separate discussion.
The Statutory Benefits
100% foreign ownership
Guaranteed by each zone's founding legislation; no local shareholding requirement has ever applied in free zones.
0% tax on qualifying income
The QFZP regime, implemented by Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 265 of 2023.
Customs treatment
Goods sit outside the customs territory for duty purposes; certain zones are also VAT Designated Zones.
Repatriation guarantees
No restriction on repatriating capital or profits.
AED 5,000
Licenses from
2–5 days
Typical incorporation time
Remote
Most corporate actions executed remotely
The 0% Rate: What the Law Requires
The QFZP regime is a conditional privilege, not an automatic status. Every condition below must hold.
The cliff-edge rule
Non-qualifying revenue beyond the de minimis threshold disqualifies the entire status — not just the excess. Early structuring is critical.
Maintain adequate substance in the zone
Derive qualifying income
Broadly: transactions with other free zone persons and defined qualifying activities such as manufacturing, fund management, and distribution from designated zones.
Comply with transfer pricing rules
Prepare audited financial statements
Not elect into the standard regime
Register and file with the FTA
Mandatory for every free zone company regardless of the rate it expects to pay.
Industries Where a Free Zone Is the Correct Structure
Businesses whose revenue is foreign-source or business-to-business international.
The mainland-market limitation is legal, not practical: a free zone entity generally may not conduct onshore business except through a licensed distributor, a registered branch, or activity-specific permits.
Banking, Compliance and Visas
Bank account
Routinely opened, but banks apply risk-based due diligence more searchingly to flexi-desk entities. TFZ prepares files to that standard; 2–4 weeks is typical.
Compliance calendar
Corporate tax registration and filing, VAT where applicable, the UBO register, and zone-specific annual audit requirements — administered by the zone authority.
Visas
Sponsored through the zone authority, with allocations tied to the licensed facility — typically 1 to 6 on flexi-desk packages, expandable with larger premises.
How to Decide
Select the zone by legal fit, not headline price: whether your activity appears on the zone's licensed list, its audit and substance requirements against your QFZP intentions, its banking reputation, Designated Zone status if you trade goods, and true multi-year cost including renewals.
TFZ is partnered across 50+ zones.
We provide a written, statute-referenced recommendation without charge.
Everything You Need to Know About Free Zone Companies
From the 0% tax law to selling onshore and audit requirements, here are answers grounded in the current legal position.
This page provides general legal information current at the time of publication, not legal advice for your specific circumstances. Legislation and executive decisions are amended from time to time; TFZ confirms the current position for every client engagement.
Choose your zone on the law, not the brochure
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