What is the difference between a free zone and mainland company in the UAE?

Mainland companies can trade freely throughout the UAE and take government contracts but require a physical office and pay 9% corporate tax. Free zone companies are limited to trading within their free zone and outside the UAE, but enjoy 100% ownership guarantees, potential 0% corporate tax on qualifying income, and lower setup costs.

Which UAE free zone is best for a consulting business?

IFZA (International Free Zone Authority) offers the lowest cost at around AED 12,900. DMCC provides prestige and Dubai Marina location. ADGM offers common-law jurisdiction and is preferred for fintech and asset management. We match the free zone to your activity, budget, and visa needs.

Can my UAE free zone company qualify for 0% corporate tax?

Yes if you meet Qualifying Free Zone Person (QFZP) criteria: derive Qualifying Income (from other free zone entities, non-UAE parties, or specific qualifying activities), maintain adequate substance in the free zone, and comply with transfer pricing rules. Non-qualifying income is taxed at 9%.

United Arab Emirates · Updated 2026

How to Form a UAE Free Zone Company (FZC / FZE) (2026 Guide)

Everything non-residents need to register a Free Zone Company with Free Zone Authority (varies: IFZA, DMCC, JAFZA, RAKEZ, ADGM, DIFC, etc.): fees, timeline, ownership rules, taxes, and the full formation process. 100% remote.

Quick Answer

To form a UAE Free Zone Company (FZC / FZE), register with Free Zone Authority (varies: IFZA, DMCC, JAFZA, RAKEZ, ADGM, DIFC, etc.) (fee: AED 12,900 (IFZA) up to AED 50,000+ (DMCC / DIFC)) with a compliant registered office, minimum Varies by free zone: AED 1,000 (RAKEZ) to AED 300,000 (DIFC) capital, and formation documents. 100% foreign ownership guaranteed. No UAE national partner required. Processing takes 3 to 7 business days.

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Government fee

AED 12,900 (IFZA) up to AED 50,000+ (DMCC / DIFC)

Processing

3 to 7 business days

Annual obligation

AED 12,000 to AED 30,000 licence renewal

Foreign ownership

100% foreign ownership guaranteed

Corporate Tax

0% on Qualifying Income for Qualifying Free Zone Persons. 9% on non-qualifying income. VAT at 5% applies unless supplied outside the UAE.

VAT / GST

VAT at 5%. Free zones do not exempt VAT, but exports of goods and international services are typically zero-rated.

Why form a Free Zone Company

100% foreign ownership with no local partner
0% corporate tax on Qualifying Income for Qualifying Free Zone Persons
Flexi-desk options avoid full office lease requirements
Streamlined visa quotas and administration

Watch outs

Cannot directly trade in the UAE mainland without a mainland distributor or dual licence
Qualifying Free Zone Person status requires substantive economic activity and adequate substance in the free zone

Best for

International trading and re-export

Consulting and professional services

E-commerce

Crypto and Web3 (ADGM, DMCC)

Financial services (DIFC, ADGM)

Frequently Asked Questions

Other United Arab Emirates entity options

UAE Mainland LLC

AED 15,000 to AED 25,000 (varies by emirate and activity) · 5 to 10 business days

Abu Dhabi Global Market (ADGM) Company

USD $8,000 to $12,000 (setup) plus annual licence · 5 to 10 business days

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Start online in minutes. Our team handles the Free Zone Authority (varies: IFZA, DMCC, JAFZA, RAKEZ, ADGM, DIFC, etc.) filing, registered office, and post-formation compliance.

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