Dubai Freezone

Benefits of free trade zones in the UAE

A freezone is a defined and isolated land or setting, with a special tax, customs, and imports regime, that is different from a mainland area. The main advantage of owning a freezone company is that as an expatriate, you can own the business 100% without having to give out any of its shares.

In a recent decision, Executive Council Resolution No. (11) of 2025 permits free zone authorities to operate outside their designated free zones and within Dubai, provided they obtain the necessary licenses or permits from the Dubai Department of Economy and Tourism (DET).

There are many advantages to establishing a company in a Free Zone, including:

1. 100% foreign ownership
2. 100% repatriation of capital and profits
3. 100% corporate and personal income tax exemptions
4. Exemption from all import and export duties (but you cannot import into mainland UAE)

There are also some additional benefits of trading within a Free Zone. Many Free Zones arrange regular training and networking events which are usually free to attend. Most have meeting rooms available to hire privately for a fee, and many will encourage members to share business opportunities within that Free Zone.

1. Overview of Business

a) A freezone company can only conduct business inside is specific freezone or outside of the UAE. It cannot provide its services or sell its products in any UAE mainland UAE jurisdiction.

b) The restriction of local business through a distributor is mainly to differentiate the business in the local market by mainland companies and freezone entities used for import/export. A distributor that has a Mainland license can act as your local agent and charge a certain fee which is lower than the 5% duty applicable on freezone invoices, if they trade directly into the local market. In case the company chooses to use a distributor, the goods should be shipped in through the distributor itself, if not, a 5% duty fee is applicable for any goods exiting the freezone.

C) Marketing a freezone company can also be restricted as you are legally only allowed to market your company inside the freezone, may that be face-to-face or even handing someone a business card.

2. Ownership Structure

Compared to the Mainland, a freezone license is 100% owned by the expatriate. There is no need for UAE National partner/service agent. Note that mainland laws have changed recently to allow 100% ownership with a wide variety of activities.

3. Office Space

Unlike the mainland, a freezone license can be incorporated with or without a physical office. Freezone Authorities allows the license holders to use a smart/flexi office usage but this restricts you on visa allocation usage.

4. Visas Eligibility

Freezone companies are limited to a certain number of visas and this normally varies from 1-6 visa packages. If you require more than the allotted allocation, then you may be asked to rent physical space inside that freezone, this can be costly due to the limited supply but high demand of commercial space.

5. Governing body approvals

The main purpose of having a freezone establishment is for importing and exporting goods and freezone authorities usually do not need approvals from external authorities. However, any external approvals from governing bodies outside of your freezone, will not be entertained.

How can we help?

Sovereign PPG is a full-service business consultancy in Dubai dedicated to helping entrepreneurs, venture capitalists, and companies establish themselves in the UAE market, particularly within free zones. With a team of formation specialists, the firm manages the entire setup process—from strategic business planning, structuring, and licence acquisition to visa processing, banking support, and government liaison, ensuring a smooth, fast, and compliant experience. By taking on the administrative burden, Sovereign PPG enables clients to focus on strategy and growth while benefiting from ongoing PRO services, including investor, staff, and family visas, licence updates, and company secretarial support.