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Procedures For Free Zone Company Formation In Dubai


Procedures for free zone company formation in Dubai

Dubai is the global hub for trade investments today. The liberal laws and the nation’s open-mindedness to business ventures attract foreign investors.

But, before you proceed with company formation in Dubai there are a few things you need to consider. The procedures for company formation in the Free Zone differs from that in the Mainland.

The companies inside the free zone vary in the nature of their operation. Some are individual subsidiaries while there are those multi-national giant heads also operating in here.

Also Read: Free Zone Company Formation and Labor Laws in Dubai

These days most of the expats choose free zones for company formation in Dubai. This is mainly because it provides 100% ownership of their property as per the Free Zone policies. These vary from the Mainland rules, where the expats can exercise at the most 50% of the total ownership.

Here, we will discuss in detail about the company formation procedures in the free zones:

Choose the License type

Choose the License type

To kickstart your company formation, get a valid license approved by the related authorities. This license is the key to proceeding with any of your business activities. Listed below are the various types of licenses:

1. Industrial License

This kind of license is required if your related activities involve:

  • Packaging
  • Assembling
  • Processing and
  • Manufacturing

Industrial License

2. Commercial License

This license applies to activities that involve repairs and workshops.

Commercial License

3. General Trading License

As the name suggests, it allows you to indulge in the following:

  • Buy
  • Sell
  • Import & export a variety of goods and products.

 General Trading License

But you do not have the provision to trade banned goods and products. Although, you can trade these if you have special permission.

4. Trading License

It provides you with the license to buy, sell, import and export goods. It is a lot cheaper when compared to the costs for a general trading license.

This license applies to 3 different types of items that you wish to trade.

5. Service License

This license applies to services companies. These includes consultancy, accountancy, and legal firms.

  • Submit the completed application forms and related documents to the concerned Free Zone authorities:

Before heading off to get your license approved here is something that you need to get done first. The rules and policies vary in each free zones. You need to submit certain applications and related documents for verification.

Service License

There is a particular time limit before which you need to submit these forms and get them verified. You cannot apply for a license unless these are verified by the concerned authorities.

Some of the common documents as specified by all the Free Zones includes

  • Passport Copy
  • Business Plan
  • UAE Entry stamp
  • Bank statement

For more details, on the kind of application forms and documents to be processed, consult a legal firm.

Seek assistance from an experienced legal/ law firms. Choose the ones that can provide you with assistance for company formation in the Free Zones.

What are your major activities?

Free Zones supports all kinds of activities. But, there are those exceptional ones that permit only restricted activities.

This means that you need to confirm whether your Free Zone allows the activity you are planning.

Also, if you have plans for more than one activity, this needs to be consulted. Some of the free zones have restrictions on the number of activities permitted.

Company’s legal structure

This is one of the most important aspects of company formation in the Free Zone. The legal structure depends on the number and nature of partners involved. For instance, the documents to be processed for an individual business subsidiary differs from that of a corporate.

Company's legal structure

What are the fees and other charges?

This is another most important aspect of company formation in the Free Zones. It is found that many of the trade investors prefer cheapest of the free zones. But, they are actually ignorant of the hidden charges and other extra costs for company setup.

Once you decide to form the company in a free zone you cannot refrain yourself from paying these charges. These might be very much essential for your company’s survival.

What are the fees and other charges

The total cost for company formation in Dubai depends on the following factors

  1. Company formation costs for a year
  2. Renewal costs at the end of every year

In some of the free zones, the company formation costs are cheaper when compared to the others. Often people misinterpret that these packages are applicable just once and relax. But, actually, you need to pay for these every year.

The renewal charges are cheaper when compared to the initial pricing. Most of the times it might include just the cost of the business license. You need to pay separately for your office space.

Your business cannot function unless you have an office space. You might need to hire employees or office staff and you need to have an office space to seat them.

It is mandatory to have an office space if you are hiring a group of 3 or more people in your office.

The size of your office space will determine the number of visas that can be applied for.

Don’t waste your time, money and effort researching on the hidden costs and charges. Seek legal advice from professional consultants experienced in dealing with free zone company formation.

Also, they can provide you with the necessary assistance for visa application and other related details,

What are the business facilities that you need?

Most of the Free Zones offer basic amenities such as warehouse and office space. But, there are other facilities that your company needs. Not all free zones will provide you with these.

Take a note of the available facilities before you choose a particular Free Zone for your company. Some of the free zones operate across specific industry domains.

What are the business facilities that you need

So, you need to make a strong consideration before choosing one. It might be helpful to keep you connected with your related consumers and stakeholders.

Bank Account

You can easily open a corporate bank account once you register your company. The common documents that are required for opening a bank account are listed below though it might differ from one bank to another:

  • Past bank statements
  • Signatory’s passport
  • Bank reference letters
  • Company formation documents

Bank Account


These are the most important procedures that is involved in a company formation process in the Free Zone.

It is recommended that you seek expert advice to help you with these procedures.