A free zone licence quote is rarely the full cost of running a company. The licence fee is the visible line item; the visa, banking, office, compliance and renewal costs usually come later and often catch founders by surprise. This guide lists the costs to budget for before you sign, so you can compare providers on a like-for-like basis.
1. The establishment card
Most free zones issue an establishment card, which is required before visas can be processed. It is usually a separate fee from the licence itself, so check whether it is included in any headline price.
2. Visas, entry permits, medical tests and Emirates ID
A quote that says “visa included” often covers only the visa quota. Processing a residency visa typically adds entry permit, medical test and Emirates ID registration costs. Ask for the all-in total for one residency visa, and multiply it by the number of partners and employees you plan to sponsor.
3. Office space and the lease requirement
A flexi-desk can be a cheaper start, but some banks ask for a physical lease as part of account opening. Moving to a physical office in the middle of the year is an expensive surprise, so model the lease into year one if banking will need it.
4. Business banking and due diligence
Corporate banking is usually the most document-heavy step of setup. Budget for preparing due diligence files and for the time it takes to open the account. Our guide to opening a corporate bank account in the UAE explains the requirements and common rejection reasons.
5. Corporate tax registration and filing
A free zone company can have a 0% corporate tax rate on qualifying income and still must register for corporate tax and file returns. Missing a filing window can trigger significant penalties even when no tax is due. See our UAE corporate tax 2026 deadlines guide for the filing calendar.
6. UBO declarations and compliance
Companies must keep beneficial ownership information up to date and report changes within the required timeframe. Some activities, such as logistics or distribution, can also face economic substance requirements. Confirm whether your activity is in scope before you finalise your structure. Our UBO reporting guide covers the deadlines and penalties.
7. Renewals and a renewal reserve
Licence and visa renewals recur every year. A practical approach is to set aside a renewal reserve from the second year, so renewal costs do not disrupt cash flow or put your licence at risk.
8. Audit and accounting
Plan for accounting and audit costs from the first year, not the first renewal. Corporate tax filings, VAT returns where they apply, and statutory accounts all need preparation.
A simple budget checklist
- Licence fee and any activity or permit approvals
- Establishment card
- Visa packages: entry permits, medical tests and Emirates ID per person
- Office or flexi-desk, including any lease the bank requires
- Banking preparation and account-opening support
- Corporate tax registration and annual filing
- UBO and compliance reporting
- Accounting and audit
- Renewal reserve for year two onwards
How to compare free zone quotes
Ask each provider for a written breakdown that separates government fees, third-party costs and service fees, and states what is included in each visa package. A lower headline price can cost more once the extras are added, so compare the total for year one and the recurring cost for year two.
Frequently asked questions
Is a free zone company cheaper than mainland?
It depends on the activity, the number of visas and whether you need a physical office. Our free zone vs mainland comparison sets out the trade-offs.
Do I pay corporate tax on a free zone licence?
Qualifying income of a qualifying free zone person can be taxed at 0%, but registration and filing obligations still apply, and non-qualifying income can be taxed at the standard rate. Check your position against the conditions.
Get a full cost breakdown before you commit
HM Corporate Services prepares written, itemised cost breakdowns for free zone setup, including visas, banking and compliance. Request your breakdown or explore our company formation services.
This article is general information, not legal, tax or financial advice. Fees and rules change; confirm current figures with the relevant free zone authority and a qualified adviser.
