How to Set Up a Company in Dubai Airport Free Zone (DAFZA)?

The Dubai Airport Free Zone (DAFZA) stands as one of the most advanced and sought-after free zones in the world. Established in 1996, DAFZA is strategically located adjacent to the Dubai International Airport, one of the busiest airports globally.

This prime location offers businesses unparalleled access to global markets. Businesses choose this for its modern infrastructure, investor-friendly policies, and smooth Company Formation in DAFZA, making it an ideal location for local and international entrepreneurs.

The purpose of this blog is to provide a clear and comprehensive roadmap for entrepreneurs on how to start a company in Dubai Airport Free Zone, breaking down each stage into simple, actionable steps.

Before starting the company formation in UAE process, several critical factors require careful consideration. Proper planning at this stage ensures a smooth and efficient setup, preventing potential delays and aligning the business structure with long-term goals.

Allowed Business Activities

DAFZA caters to a wide array of industries, with a focus on high-value, low-volume goods and services. Popular sectors include:

• Aviation and aerospace
• Logistics and freight forwarding
• IT, telecommunications, and technology
• Pharmaceuticals and medical equipment
• Luxury goods, jewelry, and cosmetics
• Engineering and material sciences
• Professional services and consulting

Entrepreneurs must ensure their intended business activity is listed and approved by the DAFZA authority before proceeding.

Legal Entity Types

DAFZA offers two primary legal structures for businesses:

1. Free Zone Company (FZCO): This is a legal entity with one or more shareholders. Shareholders can be individuals or corporate entities. It operates as an independent company, similar to a Limited Liability Company (LLC).
2. Branch Office: An existing, established company (either in the UAE or abroad) can open a branch office in DAFZA. The branch is considered a legal extension of the parent company and can conduct the same business activities.

License Categories

The type of license a company obtains dictates the activities it can legally perform. DAFZA offers several categories:

• Trade License: A trade license permits companies to engage in the import, export, distribution, and storage of specific products.
• Service License: This is for companies that offer services as their primary business activity, such as consulting, IT services, or marketing.
• Industrial License: This license allows businesses to carry out light manufacturing processes, packaging, and assembly of goods.
• General Trading License: A more comprehensive trade license that allows a company to trade a wider variety of goods. This license typically has higher fees due to its broader scope.
• Dual License: In partnership with the Dubai Department of Economy and Tourism (DED), DAFZA offers a dual license that allows companies to operate on the mainland as well.

Capital & Shareholding Requirements

For a Free Zone Company (FZCO), there is no minimum share capital requirement. Share capital can be set according to the company’s needs, though proof may be requested later.  

The company can have up to 50 shareholders, who can be of any nationality. A Branch Office has no separate share capital requirement, as it is financially dependent on its parent company.

Office Space Options

DAFZA provides a range of premium office solutions tailored to different business needs and sizes. A physical presence within the free zone is mandatory. Options include:

• DAFZA Square: High-end, premium office spaces.
• Smart Desk/Flexi-Desk: Cost-effective options for startups and small businesses, providing a shared workspace.
• Executive Offices: Fully furnished, serviced offices ranging from small to large suites.
• Multi-Story Office Buildings: Customizable office floors for large corporations.
• Light Industrial Units: Warehouses and workshops for logistics and manufacturing activities.

Compliance & Regulatory Environment

All companies registered in DAFZA must comply with its rules and regulations, as well as UAE federal laws. This includes adherence to Anti-Money Laundering (AML) and Ultimate Beneficial Ownership (UBO) regulations, which require companies to maintain a register of their true owners. 

Furthermore, most companies are required to conduct an annual financial audit and submit the audited report to the DAFZA authority upon license renewal.

The journey of setting up a company in DAFZA follows a well-defined and efficient path. The free zone authority has designed the process to be as quick and straightforward as possible for investors.

Step 1: Initial Planning & Consultation

Before submitting any documents, the first step is to consult with DAFZA’s representatives or a registered business setup consultant. In this stage, the investor finalizes the business activity, chooses the legal entity type (FZCO or Branch), and selects a suitable office package. This initial planning helps clarify all requirements and costs.

Step 2: Trade Name Reservation & Initial Approval

The investor must propose a trade name for the company. The name must comply with UAE and DAFZA naming rules, avoiding offensive, religious, or restricted terms, and may require translation or attestation. 

Certain names, such as those including “bank,” “insurance,” or other regulated terms, may need additional external approvals from UAE authorities. Once a name is approved, an initial approval application is submitted, providing basic details about the business and its shareholders.

Step 3: Application Submission

After receiving initial approval, the investor must submit the formal application. The documents required to start a company in Dubai Airport Free Zone typically include:

• Completed application form.
• Passport copies for all shareholders, managers, and directors.
• A brief business plan outlining the company’s objectives and activities.
• Copy of existing trade license or shareholder documents (for corporate shareholders)
• No Objection Certificate (NOC) from the current sponsor if a shareholder holds a UAE residence visa.
• Proof of residential address for all shareholders.
• For a corporate shareholder or a Branch Office, notarized and attested parent company documents are required.

If a shareholder or parent company is located outside the UAE, all corporate documents must be notarized and attested by the relevant authorities in the country of origin. And then attested by the UAE Embassy.

Step 4: External Approvals (if applicable)

Certain business activities, especially in sectors like healthcare, education, or media, may require special approvals from other UAE government ministries or regulatory bodies. DAFZA assists in facilitating this process, but it can add to the overall timeline.

Step 5: Office Lease & Space Allocation

While the application is being processed, the investor chooses and finalizes the office space. This can be a full office, flexi-desk, smart desk, or industrial unit. The lease must meet the minimum size requirements based on the visa quota and type of license. 

The investor signs the lease agreement and pays the rental fees. This signed lease is an important document needed to get the final trade license.

Step 6: License Issuance & Company Registration

Once all documents are verified, payments are cleared, and the lease agreement is signed, DAFZA issues the trade license. At this point, the company is officially registered and legally permitted to operate within the free zone. DAFZA will also issue a Certificate of Incorporation, a Memorandum of Association, and Share Certificates.

Step 7: Visa & Labor Card Processing

After the company is registered, it receives an Establishment Card. This card allows the company to apply for residence visas for shareholders and employees.

The number of visas depends on the office space:

• A standard office gives a higher visa quota.
• A small flexi-desk or smart desk allows fewer visas.

The visa process includes:

1. Medical fitness tests for all visa applicants
2. Emirates ID registration
3. Issuance of the labor card for employees

This process usually takes a few weeks to complete, depending on approvals and the number of visas applied for.

Step 8: Bank Account Opening

With the trade license and company registration documents in hand, the company can now open a corporate bank account with any of the local or international banks in the UAE. This is a critical step for managing company finances and transactions.

Step 9: Operational Commencement

Once the license is issued, visas are processed, and the bank account is active, the company can officially commence its business operations from its DAFZA office.

Understanding the costs involved is crucial for budgeting a DAFZA company setup. The following table provides an overview of the primary fees. 

Note that these figures are indicative and subject to change.

Operating in DAFZA offers significant advantages, but it is also important to be aware of the potential challenges.

Benefits:

• Strategic Location: Direct access to Dubai International Airport facilitates logistics and global trade.
• 100% Foreign Ownership: Investors retain 100% Ownership control of their business without needing a local partner.
• Tax Efficiency: One of the key tax benefits of Dubai Airport Free Zone is the 0% corporate tax on income for qualifying entities and 0% personal income tax.
• Full Repatriation of Profits: Companies can transfer 100% of their capital and profits back to their home country.
• World-Class Infrastructure: DAFZA offers state-of-the-art facilities, IT infrastructure, and support services.
• Streamlined Processes: Fast and efficient company setup, visa processing, and administrative support.

Challenges:

• Higher Cost: DAFZA is a premium free zone, and its setup and operational costs can be higher compared to other free zones in the UAE.
• Mainland Trade Restrictions: DAFZA-licensed companies cannot trade directly with the UAE mainland market. They must use a local distributor or obtain a dual license.
• Limited Physical Expansion: Being a geographically defined area, options for large-scale physical expansion can be limited.

For businesses that want to enjoy the benefits of Dubai Airport Free Zone company formation while also accessing the local UAE market, the dual license is a powerful solution.

What is a Dual License (DAFZA + DED)?

A dual license allows a DAFZA-registered company to also obtain a license from the Dubai Department of Economy and Tourism (DED) to operate on the mainland. This enables the company to conduct business both within the free zone and across the UAE without needing a separate mainland office.

Eligibility & Application Process

Generally, companies holding a valid DAFZA license are eligible to apply. The process involves applying the DED through DAFZA. The DED reviews the application and, upon approval, issues a mainland license that is linked to the original DAFZA registration. No separate Memorandum of Association or local partner is typically required.

Use Cases & Strategic Scenarios

The dual license is ideal for:

• Service-based companies in DAFZA that want to offer their services directly to clients located on the mainland.
• Consulting firms that need the flexibility to operate from a premium free zone base while serving a local client portfolio.
• Trading companies that want a mainland presence for marketing and sales, while using DAFZA for logistics and international trade.

Setting up a company in DAFZA is a seamless process designed for ambitious global businesses. Its strategic location, premium facilities, and investor-friendly policies make it a top-tier choice for entrepreneurs. By offering 100% foreign ownership, significant tax advantages, and a direct link to global logistics, DAFZA provides a robust platform for growth. While the investment is higher than in other zones, the unparalleled benefits and prestige associated with a DAFZA license offer exceptional long-term value for companies aiming for international success.