5 Tips for Establishing a Business in an International Free Zone

Businesses are going global at a faster pace than ever. Here are some tips for establishing a business in an international free zone.
tips for establishing a business in an international free zone

In the quest to establish a lucrative venture, international free zones present exciting opportunities. With an abundance of benefits, including tax breaks, 100% foreign ownership, cutting-edge infrastructure, and even the prospect of residing in comfortable villas in Dubai, it is a hotspot for savvy entrepreneurs. That being said, it’s vital to comprehend the complex procedures involved in starting a business in such zones. This article will provide you with 5 extraordinary tips for establishing a business in an international free zone, supplemented with a bonus tip on visa management and opening a corporate bank account.

Familiarize Yourself with Different Free Zones

International free zones vary. Benefits, industries, and laws vary. Thus, knowing each is essential to choosing the best for your business.

Governments give advantages to foreign investors in free zones, also known as special economic zones (SEZs). Tax discounts, customs duty advantages, and easier administration are common incentives. Free zones differ by industry, perks, and location. This table lists the most prevalent types:

Type of Free Zone Description
Industry-Specific Free Zones Technology, healthcare, and media businesses use these free zones. They usually have a sector-specific infrastructure.
Multi-Purpose Free Zones These are versatile and not industry-specific. They host numerous enterprises.
Geographic Specific Free Zones These zones are tied to specific locations, usually strategic for certain business types (e.g., ports for import/export businesses).

Study the Rules and Regulations

Before starting a company in a free zone, you must learn the laws and regulations. These rules vary by zone and help govern enterprises. Start here:

  • Identify Permissible Activities: Each free zone allows certain businesses. Your company’s activities must comply with the specified free zone. Medical and healthcare activities are allowed.
  • Understand Legal Structures: Free zones offer various legal structures, such as Free Zone Establishment (FZE), Free Zone Company (FZC), or a branch of a foreign or UAE company.
  • Familiarize with Licensing Procedures: Free zone licensing might vary substantially.
  • Know the Customs Rules: Free zones have their own customs regulations. These regulations are important for import and export businesses.
  • Grasp the Labor Laws: Each free zone has specific labor laws concerning recruitment, compensation, working hours, and end-of-service benefits. A solid understanding of these laws is crucial for managing your workforce effectively.
  • Be Aware of Compliance Requirements: Free zones undergo compliance audits. Your organization must provide financial and operational information to be compliant.

Create an In-Depth Business Plan

Creating a well-rounded business strategy is a fundamental aspect of launching a business in an international free zone. This strategy, manifested as a business plan, serves as a roadmap for your company’s operations, underpinning informed decision-making processes and potentially accelerating applications in free zones that require such a document. The structure of this business plan comprises several key components.

An executive summary gives a succinct outline of your company’s profile and ambitions, followed by a detailed company description. This section covers the nature of your business, the specific demands it caters to, its target demographics, and its unique selling propositions.

Furthermore, a comprehensive market analysis delves into research on market size, trends, customer segmentation, and the competitive landscape. This information is instrumental in shaping strategic decisions. Additionally, a detailed explanation of your company’s structure, management, and staffing plan in the organization and management section can underscore your team’s expertise and, in turn, attest to your business’s capabilities.

Select the Appropriate Free Zone

After developing a solid understanding of various free zones and crafting a comprehensive business plan, the critical next step is to select the most suitable free zone. This choice should be in harmony with your business needs, objectives, target market, and budget. The importance of this decision cannot be overstated, as it can significantly impact your venture’s success.

Consideration factors include the free zone’s location, providing strategic geographical benefits tailored to your business type, and available facilities. It’s essential that the zone’s infrastructure, utilities, and support services align with your specific business needs. Cost is another significant factor, incorporating not just initial licensing and registration fees but ongoing operational expenses.

Lastly, understand the permissible legal structures in the free zone, be they Free Zone Establishment (FZE), Free Zone Corporate (FZC), or branches of foreign or local companies. The chosen structure should align with your business objectives and operational needs. By carefully considering these elements, you can select a free zone that sets the stage for your business’s smooth launch and future success.

Learn to Maneuver the Application Process

While the application process can vary among different free zones, it usually encompasses:

  • Document Submission: You need to submit your application along with necessary documents, such as a business plan and copies of passports.
  • Approval and Fee Payment: Once approved, pay the stipulated fees. These may include registration, license, lease, and visa fees.
  • Legal Agreement Signing: After payment, you may be required to sign legal documents like lease agreements and articles of association.
  • Acquisition of Licenses and Certificates: The final step is the receipt of your business license and incorporation certificate, signifying the official commencement of your business.

Bonus Tip: Processing Visas and Initiating a Corporate Bank Account

Following the setup of your business, two significant tasks remain: procuring visas and opening a corporate bank account.


Securing a Dubai free zone visa begins with registration for E-Channel Services, an online platform for visa applications. Following registration, applicants secure an entry permit or employment visa, then activate this permit via visa stamping. The final step is undergoing a medical examination and applying for an Emirates ID, thereby fulfilling the necessary procedures to legally operate in the free zone.

The visa application process varies across different Dubai free zones. In the Dubai Airport Free Zone (DAFZ), applicants must submit the visa application form along with the necessary documents and pay the required visa fees.

Similarly, Dubai Silicon Oasis (DSO), Jebel Ali Free Zone (JAFZA), and Dubai International Financial Centre (DIFC) all require applicants to submit an online application form, attach the necessary documents, and pay visa fees online. For Dubai Media City (DMC), the process includes visa applications, attaching required documents, and remitting visa fees. Lastly, Dubai Healthcare City (DHCC) applicants submit their visa application online, upload necessary documents, and remit the appropriate visa costs online.

Bank Account

A company bank account is needed to manage funds. Selecting a business-friendly bank is the first step. To guarantee a seamless application, familiarize yourself with the bank’s specific needs. Next, gather your company license, certificate of formation, and shareholder and director passports.

Then, depending on the bank, you apply online or in person. Some banks need an application meeting. After submitting the needed information, you’ll need permission. After approval, activate your account to ease company finance administration.


According to AX Capital, a well-planned strategy and a full grasp of the procedure may help you succeed in starting a company in a free zone. Each step—from choosing a zone to handling visas and bank accounts—requires smart planning. These techniques can help you begin your firm in a free zone and succeed globally. Start your company in a free zone and start your success path!

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