Free Zone Business Formation – Top 15 Frequently Asked Questions (FAQ)


1. What is a free zone company?

Free Zone business setup is the most demanded business setup in UAE mainly due to the 100% ownership for all the expatriates. Free Zone is a geographically defined area where all international businesses are allowed to trade goods and services enjoying the benefits like taxes within the limits. For more details about the free zone,  check out our blog post: Why Choose UAE Free Zones for Your Business? Pros and Cons Explained


2. Can I own 100% ownership of my business in the UAE?

Yes, you can own 100% ownership of your business if you setup your business in a Free Zone.


3. What is the minimum share capital required to form a company in a Free Zone?

Most Free Zones do not require a minimum share capital to start your business.


4. Can I carry out business anywhere with a Free Zone Company?

You are allowed to carry out your business internationally and inside the designated area of the free zone with all the benefits. If you are planning to deal with the mainland of the UAE, you could get the support of a mainland registered company, or else you need to setup a company in the mainland.


5. Should I visit UAE to setup my business in the UAE?

No, generally you can setup your free zone business virtually with the help of a business setup company. But your presence is mandatory for visa application. If all the shareholders of the company don’t hold residence visas you will not be able to open a bank account.


6. Can I get a residence visa after registering my business in the UAE?

Generally, yes. You should apply for visas once you open the company. Most packages provided by business setup companies cover only the business registration. You may get visa quotas, but they will not include the cost of the visas. Visa charges must be paid separately. If you are obtaining a license with a virtual office, make sure you have a visa quota, if you need a residence visa since most virtual office packages start from 0 visa quota.


7. How many visas can I get for the company? Can I get unlimited visas once we open the

No, you cannot buy unlimited visas for your company. The number of visas allocation depends on the size of the facility, or you have to buy the visa allocation separately. These two are the ways of increasing your visa quota.


8. Is it allowed to do international business with a free zone business license?

Yes, you are allowed to do international business.


9. What tax benefits will I get from setting up my business in a Free Zone?

You will be free from income tax, duty tax, corporate tax, and even double taxation if you are trading goods or services inside the free zone or internationally.


10. Should I pay VAT (Value Added Tax) if I setup my business in a free zone?

No, you do not need to pay VAT if you trade goods or services inside the free zone or internationally. If you provide services on the mainland, you must pay 5% VAT. For more details about VAT check our VAT Guide here: Introduction to VAT in UAE


11. Should I pay only once to register my business, or should I renew every year?

Most people think it’s a one-time payment. But in UAE you should renew your business every year. There are options to get the license for 3-10 years straight for the existing price from certain free zones. It’s mandatory to renew the trade license every year.


12. Can I open a bank account for my business with a free zone license and any limitations?

Yes, you can open a bank account for your business with a free zone license, but some nationalities will have certain limitations. Contact us to find more details. Further, all the shareholders of the company should hold a residence visa in the UAE to open a bank account in the UAE.


13. Can I have a USD, EUR, GBP currency account in the UAE?

Yes, you can get your preferred currency account by depositing money in the account.


14. If the commercial license expires, how does that affect the bank accounts?

Once the company trade license expires you may receive a grace period to renew the license. If you do not renew the license during the period, your bank account will be temporarily frozen until you renew the trade license of the company. However, the bank will start sending you reminders before freezing the account.


15. Can I import and export products from a free zone established company?

Yes, generally you can both import and export products by registering your free zone company with the customs. Some free zones offer onsite custom service which will be helpful if you are importing and exporting products. (Sharjah Airport International Free Zone, Jebel Ali Free Zone).

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