Business Setup · Dubai, UAE
A Free-Zone Setup Quote That Includes the Tax Work
Last reviewed by the Exiloz tax team against the UAE legislation in force on that date. Tax law moves — confirm any figure against tax.gov.ae before you act on it.
The first quote decides more than the licence
A free-zone licence is easy to price badly, because the first quote often shows only the authority fee and a desk. The work that makes the company usable, such as tax registration, bookkeeping and a VAT review, then arrives as later invoices. A sound free-zone company formation quote prices the whole first year. This guide shows what that quote should contain.
Two packages with the same headline price can produce very different first-year costs in Dubai. The UAE government portal says setup runs through the sector, free zone, legal entity, trade name and business licence. None of those steps settles the company's tax position. That position depends on Federal Decree-Law No. 47 of 2022 and the records the company keeps.
What should a Dubai free-zone formation quote include?
A usable quote separates one-time setup, annual renewal and monthly work, and names who owns each handoff. It states the legal form, licensed activity, workspace, immigration items, Corporate Tax registration, VAT review and bookkeeping. If any line is missing, the quote is unfinished, not cheap.
Choose the activity from the work you will invoice, not from a price list. Write down the service, customer location and place of work, then check the free zone's activity list. There is no single UAE-wide price, because each free-zone authority sets its own fees.
Quick Answer
A Dubai free-zone formation quote should price the licence, workspace, tax registrations and accounting separately, with renewals shown. Choose the activity from the work you will invoice before comparing totals.
Does a free-zone licence give 0% Corporate Tax?
No. Federal Decree-Law No. 47 of 2022 brings free-zone companies within UAE Corporate Tax, and the licence does not switch on the 0% rate. Only a Qualifying Free Zone Person pays 0% on Qualifying Income, while its other taxable income is taxed at 9%.
Take a consultancy with AED 600,000 of taxable income, as an illustration. If all of it is Qualifying Income and every condition is met, tax is AED 0. If none qualifies, it fails the de minimis test, loses the status and pays standard rates: AED 20,250.
Quick Answer
A UAE free-zone licence does not guarantee 0% Corporate Tax. The 0% rate applies only to Qualifying Income earned by a Qualifying Free Zone Person that meets every legal condition.
When must a new free-zone company register for Corporate Tax?
Within 3 months of incorporation, for a UAE juridical person formed on or after 1 March 2024. FTA Decision No. 3 of 2024 sets that window, whether or not the company expects 0% tax. The UAE Federal Tax Authority charges AED 10,000 for late registration.
The EmaraTax application asks for the incorporation document, trade licence, owners' identity documents and proof of authority for the signatory. Registration is free, but one missing document can push it past the deadline. Our Corporate Tax filing guide for EmaraTax covers the return that follows.
Quick Answer
A new UAE free-zone company must apply for Corporate Tax registration within 3 months of incorporation under FTA Decision No. 3 of 2024. Late registration carries an AED 10,000 penalty.
When does a free-zone company need VAT registration?
Free-zone status does not remove VAT. A UAE-resident business must register once taxable supplies and imports pass AED 375,000 over the previous 12 months, or will within 30 days. It then has 30 days to apply to the UAE Federal Tax Authority.
Voluntary registration opens above AED 187,500 of taxable supplies, imports or taxable expenses. One large contract can push a small company over the mandatory line within weeks. A company trading goods from a designated zone needs a separate review, because different VAT rules can apply to those goods.
Quick Answer
A Dubai free-zone company must register for VAT when taxable supplies and imports pass AED 375,000 over 12 months. Voluntary registration is possible above AED 187,500, including on taxable expenses.
What accounting records must a free-zone company keep?
Enough to support every figure in its Corporate Tax return, kept for 7 years after each tax period ends. A Qualifying Free Zone Person also needs audited financial statements, whatever its revenue. Those records defend a 0% claim, as our guide to Qualifying Income explains.
Open the chart of accounts when shareholder funding lands, not when the first return falls due. Keep owner funds apart from sales and file contracts with the invoices they support. Exiloz prepares schedules and supports the audit, but it does not issue statutory audit opinions.
Quick Answer
A UAE free-zone company must keep Corporate Tax records for 7 years after each tax period ends. A Qualifying Free Zone Person must have audited financial statements regardless of revenue.
Price The Full Setup
Exiloz compares the licence, workspace and tax handoff before you commit, then sets out the accounting deliverables. See our company formation service for the next step.
Frequently Asked Questions
How much does free-zone company formation cost in Dubai?
There is no single UAE-wide price, because each free-zone authority sets its own licence and workspace fees. Compare quotes line by line, including renewals, tax registrations and monthly accounting fees.
Can a free-zone company trade with mainland customers?
It depends on the free zone, the licensed activity and how the goods or services are delivered. Check the authority's rules, and any mainland permit needed, before choosing the licence.
Is a flexi desk enough for a free-zone company?
A flexi desk may satisfy the licence for some activities, but the FTA judges Corporate Tax substance separately. The FTA guide ties substance to core activities, staff, assets and costs.
Do I need a VAT number to open a free-zone company?
No, company formation and VAT registration are separate steps with separate applications. VAT registration becomes mandatory once its taxable supplies and imports pass AED 375,000 over the previous 12 months.
What happens if a free-zone company registers late for Corporate Tax?
The UAE Federal Tax Authority charges an administrative penalty of AED 10,000 for late Corporate Tax registration. The company must still register and file every return that later falls due.
Does every free-zone company need audited accounts?
A Qualifying Free Zone Person must prepare audited financial statements regardless of revenue. Other free-zone companies should check their authority's rules, since some free-zone authorities require audited accounts at renewal.
What documents does Corporate Tax registration need?
The FTA registration service lists the incorporation document, trade licence, owners' identity documents and proof of authority for the applicant. Applying through the FTA's EmaraTax portal is free of charge.
Is a free-zone company ever taxed at 9%?
Yes, if the company fails the Qualifying Free Zone Person conditions. It then pays the standard rates of 0% up to AED 375,000 of taxable income and 9% above that.
Should accounting start before the first sale?
Yes, record shareholder funding, setup costs and the first bank entries from day one. Rebuilding them months later is slower, and it weakens the evidence behind the first tax return.
Who should handle tax registrations after formation?
Whoever handles them should be named in the formation quote, with a clear deadline beside each task. Exiloz can take over Corporate Tax registration, the VAT review and monthly bookkeeping.
Main Takeaways
A Dubai free-zone licence does not decide the company's Corporate Tax or VAT position. Corporate Tax registration is due within 3 months of incorporation, with an AED 10,000 late penalty. VAT registration becomes mandatory above AED 375,000 of taxable supplies and imports over 12 months. The 0% rate needs Qualifying Income, adequate substance, audited accounts and 7 years of records.
Before You Pay for the Licence
Free-zone formation in Dubai is an operating decision, not only a licence purchase. The licence, workspace and activity decide what the company can legally do. The Corporate Tax and VAT rules decide what it must file and by which date. A quote that stops at the licence leaves the riskiest work, and most of the deadlines, to the founder.
Write the activity brief, expected customers and tax assumptions down before asking for final prices. Then compare quotes that show one-time, annual and monthly costs side by side. Keep the money in your own account until every deadline has a named owner. Exiloz can price the whole handoff, from licence to first tax return, in one written quote you can compare.
Sources & References
Free-Zone Setup
Each page below goes deeper on one part of this topic.
Step 01 · CostThe Full Setup CostSeparate the licence from the real operating cost.Explore →Step 02 · DocumentsThe Formation DocumentsBuild the activity, ownership and tax file before applying.Explore →Step 03 · Non-ResidentThe Overseas OwnerSeparate ownership abroad from the company’s UAE footprint.Explore →Step 04 · ConsultantWho Owns the HandoffSee what a formation consultant should deliver after setup.Explore →
Accounting, Tax & Compliance Services
Accounting & Bookkeeping
Daily bookkeeping, ledger cleanup and UAE-ready financial records.
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Corporate Tax Services
Registration, return preparation and filing support for taxable persons.
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Audit Preparation Support
The schedules, reconciliations and files your auditor actually asks for.
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Payroll & WPS Support
Salary processing, WPS coordination, leave records and reporting.
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CFO & Compliance Advisory
Finance oversight and compliance planning as the business grows.
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Business Setup & Incorporation
Mainland and free zone licensing, from structure choice to trade licence.
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PRO & Document Clearing
Visas, Emirates ID, licence renewals and attestation, handled for you.
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