Starting a business in Dubai Free Zones sounds simple. And in many ways, it is. But simple doesn’t mean foolproof.
Plenty of foreign entrepreneurs make mistakes that cost them time, money, and peace of mind. If you’re setting up a Free Zone company in 2025, read this first. Avoid these five common errors, and you’ll thank yourself later.
Mistake 1: Choosing the Wrong Free Zone
Dubai has over 30 Free Zones. Each one serves a different purpose. Some focus on tech. Others on media, trading, logistics, finance, or healthcare.
If you don’t match your business activity with the right Free Zone, you’re setting yourself up for problems. You may not get the license you want. You may not be allowed to carry out your services. You may be stuck in the wrong location.
For example, if you want to set up a media company, Dubai Media City is ideal. If you’re trading goods, DMCC or JAFZA might be better. IFZA is cost-effective but limits where you can rent an office.
Fix it: Do your homework or work with a trusted advisor like GCG Structuring. Make sure the Free Zone fits your business goals, budget, and setup needs.
Mistake 2: Not Defining Your Business Activity Properly
Every Free Zone has a list of approved activities. Your company must match one—or several—of those. And once you lock it in, that’s what you’re licensed to do.
Too many entrepreneurs rush through this step. They pick an activity without thinking it through. Later, they find out their license doesn’t cover a service they need to offer. Then they have to apply again, which takes time and money.
Fix it: Get clear on what you’re going to do from day one. Don’t leave it vague. Are you consulting? Trading? Creating content? Selling digital services? Be specific.
A company like GCG Structuring can help you map your real-world work to the right legal activity codes, so you stay compliant and fully covered.
Mistake 3: Ignoring Office Space Requirements
Many people think they can skip the office and still get licensed. Some Free Zones do offer “flexi-desks” or shared workspaces. But most still expect you to pick a physical office plan.
Also, the size of your office often determines how many visas you can apply for. Need staff? You’ll need the right space.
Some Free Zones don’t let you rent outside their zone. Others are more flexible. If you pick the wrong one, you might end up with an office far from where you need to be or paying for more space than you use.
Fix it: Think ahead. How many employees do you plan to hire? Do you need a warehouse? Will you meet clients? Choose your Free Zone based on location, workspace rules, and flexibility.
Mistake 4: Underestimating the True Cost
Some Free Zone ads say you can start a business for under AED 6,000. That might be true—for a license only. But that’s not all you’ll need.
Add in office space, visas, medical tests, Emirates ID, bank setup, insurance, and admin fees. Costs rise fast if you don’t know what to expect.
Also, if your business doesn’t qualify for 0% corporate tax, you’ll pay 9%. The Federal Tax Authority (FTA) has rules about who qualifies.
Fix it: Get a full quote, not just a headline figure. Ask what’s included. Ask what’s not. A good advisor will lay it all out: license, space, visas, tax compliance, and banking costs.
A cheap setup with the wrong fit will cost you more in the long run.
Mistake 5: Doing It All Yourself
The UAE makes company setup easier than most places. But it’s still a legal process. There are forms, deadlines, and steps that must be followed in the right order.
If you try to do it all alone especially from outside the country you’ll waste time. Or worse, you’ll submit the wrong document, get delayed, or miss a key requirement.
Bank accounts, for example, are a hurdle. Many banks need specific business plans, residency status, and clean documentation. One mistake can push back your launch by weeks.
Fix it: Use experts who do this every day. GCG Structuring, for example, has helped hundreds of businesses set up correctly the first time. They handle paperwork, Free Zone coordination, banking, and compliance.
You focus on your business. They handle the rest.
Bonus Tip: Follow the Government Guidelines
The UAE’s government has made things very clear. Their site u.ae lays out the steps:
- Pick your legal structure (LLC or FZE)
- Choose a trade name that fits the rules
- Apply for your license
- Secure office space
- Submit required documents
- Register and start operations
Stick to the rules, and your business setup will go smoothly.
Final Word
Dubai Free Zones offer great benefits: full ownership, low tax, fast setup, and global access. But it’s easy to make wrong calls if you don’t plan ahead.
Choose the right Free Zone. Define your activities with care. Budget realistically. Understand space needs. And don’t do it all alone.
Start smart. Avoid these five mistakes and give your company the launch it deserves.