A step by step guide to set up your company in the free zone

The UAE has long been known for its thriving oil, gas, real estate, and logistics industries. However, over the past two decades, business setup in the UAE free zone has also emerged as a lucrative alternative for global entrepreneurs. Moreover, there are impeccable benefits you may receive when you plan to set up your company in free zones in Dubai or other parts of the UAE. Furthermore, the government is very keen and enthusiastic about providing all necessary facilities to entrepreneurs and startup founders to establish their businesses here. If you want global exposure for your business in a business-friendly environment that fosters growth, free zones in the UAE are the ideal destination to start your business operations. In this blog, we will guide you through how to set up your company in the free zone of the UAE. But before that, let’s understand what a free zone is.

What is a Free Zone in the UAE? 

A free zone is a designated area where businesses get exemption from regulations, taxes, and customs duties. In the UAE, a free zone is established to attract foreign investment and promote trade.

Here are some key features of free zones in the UAE/worldwide:

1. 100% foreign ownership
2. Full profit repatriation, that is, you can send your business’s profits back home
3. Low taxes
4. Minimal paperwork, quick approvals, and supportive authorities

Business Setup in the UAE Free Zone: Step-by-Step Guide  

Here’s a step-by-step guide on business setup in the UAE free zone:

• Step 1: Select Your Business Activity  

  The first step when executing business setup in the UAE free zone is to choose the business activities. There is a wide range of business activities to choose from, including advertising and animation, film and print production, information technology, marketing and communications, branding, import and export, as well as manufacturing and distribution of goods and services. Decide what business activities you want to do here.

• Step 2: Decide on Business Legal Structure
  

  Choosing the type of legal entity or structure for your business is another important step in business setup in the UAE free zone. There are two types of legal entities you can choose from:

  1. Free zone limited liability company (FZ LLC)
  2. Free zone establishment (FZE)

• Step 3: Choosing a trade or business name 

  The next step is to decide on the trade name that you would like the world to remember. You can start by checking with the free zone authorities about the permitted trade names. Additionally, you can check whether the intended trade name has been registered before.

  Here are some things to keep in mind when choosing a trade/business name for your company:

  1. Make sure the business name aligns with your business activity and legal status.
  2. Include a suffix in the business name indicating its legal form. For instance, you can include FZE for a free zone establishment.
  3. Always avoid names of any UAE emirates or governing bodies.
  4. Be respectful of the UAE’s societal norms.

• Step 4: Prepare the Required Documents 

  To set up your company in the free zone, you need these documents: 

  1. Passport copies of shareholders/directors.
  2. Recent photos.
  3. Proof of address (utility bill or tenancy contract).
  4. Entry visa copy or Emirates ID (if applicable).
  5. Business plan (especially for construction and industrial activities).
  6. For corporate shareholders: MOA, AOA, and Certificate of Incorporation.

• Step 5: Company Registration and License Issuance 

  Once your documents are verified, the free zone authority will issue your Certificate of Incorporation and Trade License. You are now legally allowed to operate.

• Step 6: Choose an Office Space
  

  Typically, free zones offer a range of office space options based on your budget, staff size, and business needs. You can choose between:

  1. Virtual Office: A cost-effective option for businesses operating in a free zone. A virtual office provides a business address and administrative support without requiring a physical space. It’s an affordable option for startups or businesses entering the UAE market.
  2. Flexi Desk: For the unversed, a flexi desk is a shared workspace within a co-working area. It’s ideal for entrepreneurs or small teams who don’t require a permanent office. You will have access to basic facilities and, sometimes, shared meeting rooms.
  3. Dedicated Workspace: This setup offers your team their own desk or a small cabin in a shared office. It provides more privacy and consistency than a flexi desk, making it suitable for growing businesses that need a stable work area.

   

• Step 7: Open a Corporate Bank Account
  

  With your company documents in hand, you can open a UAE corporate bank account. Most free zones partner with local and international banks to streamline the process.

• Step 8: Start Business Operations 

  Once your license, bank account, and visas are ready, you are all set to begin trading, contracting, or offering services within the UAE free zone and beyond.

Why Choose a Free Zone Company Setup for Your Business? 

The UAE has more than 40 free zones across Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, and other emirates. Each caters to specific industries, ranging from finance and media to healthcare and construction. For instance, if you are looking to set up a media or entertainment company or other fields in the UAE, choosing Sharjah Media City or Shams Free Zone is the right choice. Shams Free Zone offers rapid and cost-effective company formation, 100% foreign ownership, and enables companies to benefit from tax exemptions and affordable licensing fees, making it particularly attractive for startups and SMEs. 

Here’s why businesses should prefer free zones:

1. You will have 100% control of your business.
2. No restrictions on sending earnings abroad.
3. No customs duties within the zone.
4. Choose from a wide range of licensed activities: trading, services, consultancy, manufacturing, logistics, and more.
5. In many free zones, you can get a license within a few days.

Conclusion 

Business setup in the UAE free zone is one of the fastest and most cost-effective ways to establish your presence in the Middle East. From tax incentives and full foreign ownership to streamlined administration and world-class infrastructure, free zones make it easy for entrepreneurs to start and scale.

If you are considering setting up in the UAE, carefully choose the right free zone based on your industry, budget, and growth plans. Shams Free Zone allows registration for over 120 different business activities, including e-commerce, services, trading, and consultancy, among others. Moreover, ShamsFZ offers a quick and hassle-free registration process.

Call Shams authorities at 800 (Shams) 74267 to learn about the setup process or visit www.shams.ae for more information.

Frequently Asked Questions (FAQs) on Company Set Up in Free Zone The UAE