Dubai Airport Free Zone Company Regulations in 2025

The Dubai Airport Free Zone (DAFZ) stands as one of the world’s most prestigious and advanced free zones. Renowned for its clear and business-friendly Dubai Airport Free Zone Company Regulations, DAFZ offers investors a transparent legal framework to operate confidently. Strategically located next to Dubai International Airport, it provides unmatched logistical advantages and global connectivity.

This prime positioning makes it a top choice for international companies in sectors like aviation, logistics, pharmaceuticals, and luxury goods. For anyone considering company formation in the UAE, DAFZ presents a premium and highly regulated environment.

The purpose of this blog is to provide a clear and consolidated overview of the legal, regulatory, and compliance aspects of operating a business in DAFZ. It is designed for investors, entrepreneurs, legal advisors, and consultants who need a simple yet comprehensive understanding of the Dubai Airport Free Zone Regulations. This blog breaks down the complex rules into easy-to-understand sections, ensuring a clear path to compliance and success.

A robust legal framework governs the operations of all companies within DAFZ. This framework establishes the zone’s autonomy and outlines the rights and responsibilities of registered businesses.

• Founding Law: Law No. (25) of 2009

The foundation of DAFZ’s legal structure is Dubai’s Law No. (25) of 2009. This law officially established the Dubai Airport Free Zone Authority as the governing body. It grants DAFZ regulatory autonomy, allowing it to create its own rules for licensing and company operations. 

Key provisions of this law guarantee major financial incentives, including exemptions from taxes and the right to full capital and profit repatriation.

• DAFZ Implementing Regulations 2021

In 2021, DAFZ introduced a new set of Implementing Regulations. These modern rules replaced the previous ones and brought the free zone’s legal framework in line with international best practices. The 2021 regulations introduced greater flexibility and enhanced corporate governance standards. 

They also modernized the procedures for Dubai Free Zone Company Registration, making the zone even more attractive to global businesses.  

• Interaction with UAE Federal Laws

While DAFZ has its own regulations, companies operating within it are still subject to UAE federal laws. This is a crucial aspect of the Dubai Airport Free Zone Regulations. For example:

• Federal laws on Anti-Money Laundering (AML), Intellectual Property (IP), and securities apply to all DAFZ companies.
• The UAE’s federal corporate tax law is applicable, although DAFZ companies can benefit from a 0% tax rate if they meet specific conditions.
• DAFZ has its own employment regulations, but they are based on the principles of the UAE Labor Law.

In addition, companies must ensure they comply with both DAFZ regulations and relevant federal laws to maintain smooth operations.

• Key Innovations in the 2021 Regulations

The 2021 regulations introduced several modern features that significantly enhance the flexibility and governance of DAFZ companies.

• Flexible Share Structuring: The new rules allow companies to issue different classes of shares. This is like having different types of tickets to an event; some shares might come with voting rights (VIP tickets), while others might only have rights to profits (general admission). This allows for more complex and tailored investment structures.
• Virtual or Electronic General Assemblies: The regulations officially authorize companies to hold their general assembly meetings electronically, using platforms like Zoom or Microsoft Teams. This makes it easier for international shareholders to participate in important company decisions.
• Stricter Beneficial Owner Disclosure: The rules introduced a stricter regime for disclosing the Ultimate Beneficial Owner (UBO), the real person who ultimately owns or controls the company. Companies must maintain an updated register of their beneficial owners and report any changes within 14 days, promoting transparency.
• Migration and Conversion Flexibility: The regulations provide a clearer framework for companies to migrate into DAFZ from other jurisdictions or to convert from one entity type to another (e.g., from an FZCO to a PLC), offering greater corporate flexibility.

DAFZ offers several legal structures to suit different business needs. The Dubai Free Zone Company requirements vary for each entity type.

• Free Zone Company (FZCO / FZ LLC)

This is the most common legal entity for a Dubai Free Zone company formation.

• Shareholders: It can be formed by one or more shareholders, up to a maximum of 50. Shareholders can be individuals or corporate entities.
• Capital Requirements: There is no longer a specific minimum share capital requirement mandated by law. However, the proposed capital must be sufficient for the company’s activities.
• Governance: The FZCO structure benefits from the new flexibility in share classes, allowing for customized governance and profit distribution arrangements.

• Public Limited Company (PLC)

This structure is designed for larger enterprises that may wish to raise capital from the public.

• Capital and Shareholders: A PLC requires a higher minimum share capital and a greater number of shareholders compared to an FZCO.
• IPO Eligibility: A key feature of a PLC is its ability to offer shares to the public through an Initial Public Offering (IPO). It can also be listed on a stock exchange, subject to approval by the relevant UAE regulatory authorities.

• Branch of a Foreign or UAE Company

An existing company can establish a presence in DAFZ by opening a branch.

• Capital Requirement: A branch has no separate share capital, as it is legally an extension of its parent company.
• Naming and Activity Scope: The branch must operate under the same name as its parent company and is generally restricted to conducting the same business activities. The parent company is fully liable for the branch’s operations.

Entity Migration and Conversion

As mentioned, the 2021 regulations provide clear rules for companies to change their legal status within DAFZ. For example, a successful FZCO could convert into a PLC to prepare for an IPO.

This flexibility allows a business to adapt its legal structure as it grows and its strategic needs evolve.

Obtaining the correct license is the cornerstone of any Dubai Free Zone Company Setup. DAFZ offers a wide range of license categories to cover various business sectors.

• License Categories:
  • Trading License: For companies involved in the import, export, and distribution of goods.
  • Industrial License: For businesses engaged in manufacturing, processing, and assembly, an industrial trade license is required. 
  • Service License: For consultancies, IT firms, and other professional service providers.
  • E-commerce License: E-commerce trade licenses are specialized for businesses that sell goods and services online. 
  • General Trading License: A broader trading license that allows a company to trade a wider variety of products.
• Dual Licensing: DAFZ offers a dual licensing option in partnership with the Dubai Department of Economy and Tourism (DET). This allows a DAFZ-based company to also obtain a mainland license to operate directly in the local UAE market without needing a separate mainland office.
• Application Process: The process involves submitting an application form, passport copies, a business plan, and other required documents. Once approved, the license is issued upon payment of the fees. The Dubai Free Zone company setup cost will depend on the type of business license and other specific requirements.

The Dubai Airport Free Zone Regulations place a strong emphasis on good corporate governance and transparency. All registered companies must adhere to a set of ongoing compliance obligations.

• Mandatory Registers: Companies must maintain several official registers at their registered office, including:
  • A register of shareholders.
  • A register of directors.
  • A register of beneficial owners.
• Beneficial Ownership Disclosures: As per the new regulations, companies must identify their Ultimate Beneficial Owners and submit this information to the DAFZ authority. This information must be kept up-to-date.
• Virtual General Meetings: Companies can now hold their Annual General Meetings (AGMs) virtually, which must be conducted according to the procedures outlined in the regulations.
• Financial Reporting and Audit: All DAFZ companies are required to maintain proper accounting records and have their financial statements audited by a DAFZ-approved auditor each year. The audited report must be submitted to the authority upon license renewal.
• Other Corporate Actions: The regulations provide clear rules for processes like increasing or decreasing share capital, transferring shares between owners, and the voluntary liquidation of a company.

One of the most significant advantages of a DAFZ formation is the highly favorable financial environment.

• 0% Corporate Tax: The UAE’s 9% corporate tax, effective from June 1, 2023, applies to most companies. However, DAFZ-registered companies can benefit from a 0% tax rate if they meet specific conditions under the UAE’s free-zone regime, as outlined by the UAE Federal Tax Authority. Companies must comply with the criteria for “Qualifying Free Zone Persons” to maintain this 0% tax benefit.
• Import/Export Duty Exemptions: Companies are exempt from customs duties on goods that are imported into the free zone and then re-exported.
• Profit Repatriation: The law guarantees businesses the right to repatriate 100% of their capital and profits back to their home country without any restrictions or currency controls.
• 50-Year Exemption Duration: The founding law provides a guarantee of tax exemption for a period of 50 years, which can be extended.
• Risks to Maintaining Tax Benefits: To maintain these benefits, companies must strictly adhere to all compliance requirements, including maintaining adequate substance in the UAE and complying with transfer pricing rules. Failure to do so could risk the loss of the 0% tax benefit.

For more details on the broader UAE tax environment, check out this informative blog: Is Dubai Really Tax-Free?

DAFZ has its own set of employment rules that govern the relationship between companies and their employees.

• DAFZ-Specific Rules: While based on the principles of the UAE Labor Law, the DAFZ employment regulations handle matters like employment contracts, working hours, and termination procedures.
• Contracts and Wages: All employment contracts must be registered with the DAFZ authority. Wages must be paid through the UAE’s Wage Protection System (WPS) to ensure transparency and timely payment.
• Visas and Permits: DAFZ acts as the sponsor for all employees. The authority manages the process of obtaining residence visas, work permits, and other necessary documents.
• Dispute Resolution: The regulations outline a clear mechanism for resolving any labor disputes that may arise between an employer and an employee, often involving mediation through the DAFZ authority before any escalation to the courts.

To learn more about setting up a company in DAFZ, including key steps and legal requirements, check out our detailed blog on How to Set Up a Company in Dubai Airport Free Zone (DAFZA).

The Dubai Airport Free Zone Regulations, particularly the modernizations introduced in 2021, have created a highly sophisticated, flexible, and well-governed business environment. DAFZ offers a premium platform that combines world-class infrastructure with a legal framework that meets international standards. 

For entrepreneurs and investors, understanding these regulations is the key to leveraging the full potential of DAFZ while ensuring complete compliance. The combination of financial incentives, operational flexibility, and strong governance makes a Dubai Airport Free Zone Company Formation a strategic choice for any business with global ambitions.