How Much Does It Cost to Set Up a Business in a Freezone? | UAE Freezone Guide

Setting up a business in the UAE has long been an attractive option for entrepreneurs worldwide. Among the most popular choices is establishing a Freezone business setup. But one of the first questions every entrepreneur asks is: How much does it cost to set up a business in a freezone?

In this blog, we’ll break down the cost components, highlight different UAE free zones, and provide a detailed overview of what you can expect when planning your business setup in UAE free zone. We’ll also address frequently asked questions and help you understand the best options available in 2025.

---

What is a Freezone Business Setup?

A Freezone business setup refers to registering a company within one of the UAE’s designated free trade zones. These zones offer foreign investors 100% ownership, tax exemptions, simplified customs processes, and minimal paperwork. Each freezone has its unique set of rules, activities, and cost structures.

Popular UAE free zones include:

• JAFZA (Jebel Ali Free Zone)

• DAFZA (Dubai Airport Freezone Authority)

• DUQE Freezone (Dubai’s Innovation Hub)

• IFZA (International Free Zone Authority)

---

Key Factors That Influence Freezone Business Setup Costs

Understanding the cost structure is essential before making an investment. The cost to set up a business in a freezone depends on several variables, including:

1. Type of License

Different business activities require different licenses. The common types include:

• Commercial license

• Industrial license

• Service license

• Consultancy license

For example, the IFZA license cost for a consultancy business starts from AED 12,000 annually, depending on the number of visa allocations and the business activities involved.

2. Number of Visas Required

Freezones allow business owners to apply for a limited number of visas depending on the package and office size. Visa eligibility often impacts the overall setup cost. More visas mean higher costs due to increased office space requirements.

3. Office Space Requirements

Some freezones offer flexible desk options, while others require dedicated physical offices. Here are typical office types:

• Flexi-desk (shared space): AED 10,000–15,000/year

• Dedicated desk: AED 15,000–20,000/year

• Private office: AED 20,000–50,000+/year

DUQE Dubai, a growing innovation zone, provides flexible office options with integrated coworking benefits that appeal to startups and freelancers.

4. Business Activities and Approvals

Some specialized activities such as import/export, manufacturing, or financial services may require external approvals or additional licensing, increasing your setup cost.

5. Freezone Location

Costs vary significantly based on the freezone’s location and prestige. Let’s compare a few:

---

Cost Breakdown: Major UAE Freezones

1. IFZA (International Free Zone Authority)

• IFZA license cost (zero visa): AED 12,900 – AED 14,900

• Shared workspace included

• Visa allocation costs extra (around AED 3,750 per visa)

• Ideal for: Consultants, e-commerce, small businesses

2. DUQE Dubai

• License + Flexi-desk: Starting from AED 15,500

• Visa costs: AED 4,500–AED 7,000 per visa

• Positioned as a startup hub for entrepreneurs and creatives

• Benefits include coworking spaces, startup mentorship, and premium Dubai address

3. DAFZA Company Setup (Dubai Airport Freezone Authority)

• License + Office Space: Starts from AED 35,000

• High-end infrastructure with proximity to Dubai International Airport

• Ideal for logistics, aviation, tech firms, and MNCs

4. JAFZA Company Formation (Jebel Ali Free Zone)

• License fee: Starts from AED 25,000

• Office/warehouse costs: AED 50,000 – AED 150,000+

• Strategic for import-export and manufacturing companies due to port access

• Excellent for heavy industries, logistics, and international trade

---

Hidden or Additional Costs to Consider

Setting up in a freezone isn’t just about the license and office. Several additional expenses may arise:

• Bank account opening: Some banks require minimum balances (AED 25,000–AED 100,000)

• Medical test and Emirates ID: Around AED 1,500 per applicant

• Insurance requirements: Employee medical insurance is mandatory

• Attestation and translation fees: For foreign documents, average AED 500–2,000

• Renewal fees: Most zones charge annual renewal fees similar to the initial setup

---

Why Choose a UAE Freezone for Business Setup?

Here are the main benefits of a business setup in UAE free zone:

• 100% foreign ownership

• Full repatriation of profits

• Tax-free income (0% personal and corporate tax for most businesses)

• Strategic global location for trade

• Streamlined setup process (as quick as 2–5 business days in some zones)

Free zone business setup is especially beneficial for entrepreneurs, startups, and SMEs seeking flexibility, international credibility, and minimal restrictions.

---

FAQs: Business Setup in UAE Free Zones

Q1: Is it cheaper to set up a business in a freezone compared to the mainland?

Answer:
Yes, generally. Freezone business setup is often more cost-effective due to reduced regulatory fees, shared office space options, and fewer local partnership requirements. However, freezone businesses may have trade restrictions within the mainland unless a local distributor is involved.

---

Q2: How long does it take to set up a company in a UAE freezone?

Answer:
Depending on the freezone, setup can be completed within 2 to 10 working days. IFZA and DUQE are known for fast processing times, while larger zones like JAFZA or DAFZA may take longer due to regulatory approvals.

---

Q3: Can I upgrade my freezone package or switch to a different zone later?

Answer:
Yes. Many zones allow package upgrades (e.g., more visas, larger office space) as your business grows. However, migrating from one freezone to another typically requires liquidation of the current company and new registration, which may incur extra costs.

---

Final Thoughts: Budgeting for Your Freezone Business Setup

Understanding how much it costs to set up a business in a freezone requires a holistic view of license fees, visa requirements, office space, and other hidden costs. Whether you’re looking at JAFZA company formation for trade, DAFZA company setup for logistics, or a more cost-effective route like IFZA or DUQE Dubai, there’s a freezone tailored for every business model.

Here’s a quick summary of average starting costs in 2025:

When deciding on your free zone business setup, consider your industry, budget, and future growth plans. Consulting with a local business setup expert can also save you time, ensure compliance, and help you select the right package for your needs.

---

Would you like a custom cost calculator or comparison chart for different freezones? I can create one tailored to your business activities and visa needs.