A free zone is a designated economic area in the UAE that operates under its own regulatory framework. Businesses incorporated here benefit from 100% foreign ownership, zero import/export duties within the zone, simplified company setup, and potential corporate tax incentives under the Qualifying Free Zone Person regime.
There are over 40 UAE free zones, including: DIFC, ADGM, JAFZA, DMCC, Dubai Silicon Oasis, SAIF Zone, and RAKEZ — each serving different industry sectors.
Free zone companies were traditionally restricted from trading directly with UAE mainland customers without a local distributor. The mainland company structure has no such restriction. Read the full comparison: Free Zone vs Mainland — Which Is Right for Your Business?.
A Qualifying Free Zone Person (QFZP) can apply 0% tax to their qualifying income. Income from UAE mainland customers is taxed at 9%. Maintaining QFZP status requires adequate substance, proper accounting, and audited financial statements.
Free zone companies must comply with: annual licence renewal, VAT registration above AED 375,000 turnover, corporate tax registration, economic substance regulations, and annual audited accounts.
Finanshels provides end-to-end accounting, tax, and compliance for UAE free zone companies — from bookkeeping to corporate tax filing and QFZP qualification support.
