Dubai Free Zones: 10 Reasons To Start A Business

Jenny Hunt
Jun 15, 2020
6 min read

Updated: Sep 23, 2023

15th June 2020, Updated 17th September 2023

Companies the world over are re-evaluating their strategies to survive and beat Covid-19. Expanding into a new market might not initially seem an obvious option, particularly as companies are scouring overheads to identify areas for cost-cutting. However, now more than ever, businesses need to mind-feed and consider all options, even it they might appear audacious or unachieveable at the outsight. If your business continues to do what it has always done, it will continue to get what its always gotten - if its lucky. The business world is changing, so if your organisation is financially able to expand into a new market, then Dubai should definitely be on your radar.

Free zone benefits in Dubai

Cost effective incorporation - over recent months the different free zones have been slashing their rates and promoting special offers to attract foreign investment. Now is the cheapest time to be setting up a business in a Dubai free zone
Fast incorporation - whilst the time to incorporate varies between the different free zones, your business can be set up within a matter of days
100% foreign ownership - you can fully own your business without the need for a local sponsor, which is a requirement for mainland companies)
Choice of structures: either a Limited Liability Company (LLC) or a foreign branch
No corporation tax - this is always extremely attractive to foreign investors
No income tax - who wouldn't want to keep all of the money they earn!
Independent regulations - each free zone is independently regulated, although you might find some regulations very similar to Dubai mainland
No customs duty - great for importers/exporters. However, do note that duty is payable at 5% if goods are moved from the free zone onto the Dubai mainland
Repatriation of profits and capital is allowed
No physical office requirements - depending upon your organisations requirements and specific license and number of visas required
Paid up share capital is not required - this does vary from free zone to free zone, but not all free zone require for the share capital amount to be deposited
Huge selection of business activities including commercial, industrial, healthcare, media, and professional etc...
Ability to incorporate holding companies
No requirement to be in-country for the company registration - this does vary from free zone to free zone
Ability to apply for UAE visas - enabling you to have employees on the ground to develop your business or even move to Dubai yourself and manage the operation!

Are Dubai free zones successful?

Trade volume of the UAE free zones grew by 2.1% in 2019 to AED621.3 billion and represented 53.3% of the UAE's non-oil trade in 2019. This is huge! Whilst the UAE is known for having huge hydrocarbon reserves, it has heavily invested in diversifying its economy away from this, particularly Dubai, which is well known for tourism and hospitality amongst other sectors. Dubai has numerous free zones, some of which are sector specific, such as Dubai Healthcare City, Dubai Media City and Dubai Design District; whilst others are generic and welcome businesses all sorts of sectors.

(Updated 17th September 2023)

Dubai Integrated Economic Zones Authority (DIEZ), which includes the Dubai Airport Free Zone, Dubai Silicon Oasis free zone and Dubai CommerCity free zone, has more than 22,000 companies operating within its free zones with a combined workforce of 41,000 employees, contributed 5% to Dubai's GDP and 11% to Dubai's non-oil foreign trade in 2022, and reported a 29% increase in revenues. Strategic partnerships with government and private entities in 2022 also increased the flow of investments.

Jebel Ali Free Zone Authority (Jafza) reported a 30% growth in 2022, increasing the number of companies operating in the free zone to over 9,500 - the highest number of customer registrations in a decade.

International Free Zone Authority (IFZA) reported a 177% increase in the number of company registrations during 2022.

10 reasons to start a business in Dubai free zone

Discover 10 reasons why Dubai is a great destination to start a business in one of the numerous free zones right now, as the world goes through dramatic changes:

Leading international business centre and regional hub
Dubai is resilient with the UAE being ranked 3rd most resilient economy globally, post Covid-19 (Euromonitor International's Macroeconomic Resilience Score (2020)*)
Tax free business opportunities
World class infrastructure - well maintained roads, excellent public transport, modern buildings for commercial use, state of the art venues for meetings & events, hotels for all budgets
Dubai is a visionary city - its economic progress over the last 20 years and more proves this
Knowledge & innovation hub - Dubai has positioned itself as a forward thinking destination with the intention of constantly changing and innovating to stay ahead of the game with strategic plans in place
Dubai responded quickly to COVID-19 both in terms of providing economic stimulae to keep its economy alive and to containing the virus via lockdowns to be able to get businesses opening up again, safely, as quickly as possible.
Dubai is prepared for change as the UAE is ranked 5th most prepared globally and most prepared in the MENA region (KPMG Change Readiness Index 2019).
16th globally and top regionally for the ease of doing business (Ease of Doing Business Report 2020)
Easy to attract and retain top talent.

*Euromonitor International's Macroeconomic Score (2020) can be found on slide 13/26 of the Euromonitor IPO Market Resilience Index.

(Updated 17 September 2023)

Check out our Youtube video: Why Start Business In Dubai.

(Updated 17 September 2023)

At the start of 2023, Dubai announced a 10-year economic strategy called the Dubai Economic Agenda (D33), which aims to double it's economy to AED32 trillion, through 100 transformational projects, to ultimately position it in the top three cities in the world. The main objectives of D33 are:

Increase Dubai's foreign trade to AED25.6 trillion by adding 400 cities to Dubai's foreign trade map.
Increase FDI to approximately AED60 billion annually, to reach a total of AED650 billion by 2033.
Increase Dubai Government's expenditure to AED700 billion.
Increase private sector investments to AED1 trillion.
Increase the value of domestic demand for goods and services from to AED3 trillion.
Generate an annual contribution of AED100 billion from digital transformation projects to Dubai's economy.

This is an opportunity to be part of a growing economy, in which development projects have been identified and are being put in place, including launching a green and sustainable manufacturing strategy and launching economic corridors with Africa, Latin America, South East Asia.

(Updated 16 September 2023)

Dubai Global Rankings 2023

In the world competitiveness rankings 2023, Dubai bagged the following top spots:

1st for Access to Electricity,
1st for Satisfaction with the Roads and Highways System,
1st for Energy Infrastructure,
1st for City Management,
1st for Access to Clean Fuels and Technologies for Cooking
3rd for Total Local Energy Production and Wastewater Treatment Efficiency
6th for Water Production

Institute for Management Development (IMD) World Competitiveness Yearbook 2023.

Additional, notable, rankings include:

Dubai is the 3rd most prominent city in the world, The Economist, June 2023
Dubai is the most livable city in the MENA in 2023, for the fifth year in a row, Economist Intelligence Unit, June 2023
Dubai is named the best destination for long-term remote workers, Savill's Executive Nomad Index September 2023
Dubai has the fastest mobile download speeds in the world, Ookla's Median City Speeds August 2023

(Updated 17 September 2023)

How to start a business in Dubai free zone

So now you are ready to start your business, but where do you start? Can you save money by doing it yourself - a DIY company setup in Dubai free zone? Or will you save time, money and hassle by using a trustworthy business setup consultant? Check out our Youtube video: Is It Cheaper To Go Directly To A Free Zone?

How Gateway Group can help with your Dubai free zone company setup

Getting the right business license, in the right jurisdiction with the correct business activities is key to doing business in Dubai. At Gateway Group, we'll understand your planned activities and goals for doing business in Dubai so that we can suggest the best business license for your company's specific circumstances. Once your free zone business license is issued we can then organize visas and Emirates ID cards for your employees.

✅ Helping you to choose the right free zone, based upon your specific requirements.

✅ Complete company formation services, so you get your trade license issued hassle-free, enabling you to focus on growing your business.

✅ Ancillary support services, including residence visas, accounting, payroll etc.