UAE Free Zones Compared: RAK vs DMCC vs DIFC vs ADGM vs JAFZA

Five zones, five different propositions

The UAE has over 40 free zones, but five dominate the conversation when international businesses consider setting up: RAK ICC, DMCC, DIFC, ADGM, and JAFZA. Each serves a different purpose, and choosing the wrong one costs you money every year it remains the wrong choice.

This is not a promotional comparison. It is a cost-and-compliance breakdown based on published fee schedules and regulatory requirements.

The comparison at a glance

RAK ICC: the cost play

RAK ICC is the UAE’s answer to the BVI. It is designed for international holding companies, SPVs, and asset-protection structures that do not need a physical presence in a commercial hub.

What you get: An International Company or LLC registered with the RAK International Corporate Centre. No requirement for a physical office. No mandatory audit (unless the entity is conducting regulated activities). Formation in 3–5 business days.

What it costs: Initial registration: AED 7,200–13,600 (US$1,960–3,700) depending on the package. Annual renewal: approximately AED 9,000 (US$2,450). This is roughly a quarter of the cost of DMCC or JAFZA.

When to use it: Holding companies (especially for property or equity investments), IP holding structures, treasury vehicles, and multi-entity group structures where per-entity cost matters.

When not to use it: If you need a physical office in Dubai, if you need to trade in commodities, or if your counterparties or investors expect a DIFC or ADGM entity.

DMCC: the trading hub

DMCC is the UAE’s largest free zone by number of members (over 24,000 companies) and has been named Global Free Zone of the Year by the Financial Times’ fDi Magazine nine consecutive times. It is centred on JLT (Jumeirah Lakes Towers) in Dubai.

What you get: A DMCC Company with a trade licence, flexi-desk or office space, establishment card, and visa eligibility. DMCC covers trading, service, and industrial licence types.

What it costs: First-year all-in cost: AED 49,000–55,000 (US$13,300–15,000), including registration (AED 10,120), licence fee (from AED 20,265), flexi-desk, establishment card, and one visa. Annual renewal: AED 20,265+ for the licence alone.

When to use it: Commodities trading (gold, diamonds, tea, coffee), general trading businesses, service companies that want a Dubai presence, and SMEs that want the credibility of a well-known free zone.

When not to use it: If you are a regulated financial services firm (DIFC or ADGM is better). If you want the lowest possible cost (RAK ICC is cheaper). If you need a large warehouse (JAFZA is better).

DIFC: the financial centre

The Dubai International Financial Centre operates under its own common-law legal system, modelled on English law, with its own courts (DIFC Courts) and its own financial regulator (DFSA). It is a jurisdiction within a jurisdiction.

What you get: A company regulated by the DFSA (if conducting financial services) or registered with the DIFC Registrar of Companies (for non-regulated entities). Access to DIFC Courts for dispute resolution. A Gate Avenue or Innovation Hub address.

What it costs: Registration fee: US$8,000 (Category 1–4 companies). Annual commercial licence: US$12,000. Data protection fee: US$500. If DFSA-regulated, add supervisory fees from US$10,000/year. First-year total for a regulated entity: US$30,000+.

When to use it: Fund management, asset management, banking, insurance, fintech (under the Innovation Testing Licence), and any financial services activity where counterparties expect DIFC credentials.

When not to use it: If you are not doing financial services. The cost is hard to justify for a trading or consultancy business.

ADGM: the Abu Dhabi alternative

Abu Dhabi Global Market is the newer of the two common-law financial centres. Like DIFC, it has its own legal system (English common law), courts (ADGM Courts), and financial regulator (FSRA). It has been particularly active in digital assets and fintech regulation.

What you get: A company registered under the ADGM Companies Regulations 2020. If conducting financial services, regulated by the FSRA. ADGM’s Registration Authority (RA) handles non-regulated entity formation.

What it costs: RA registration: US$1,200–2,000. Commercial licence: from US$2,000/year (varies by activity). Data protection registration: US$300. FSRA-regulated entities face additional supervisory fees. First-year total for a non-regulated entity: US$8,000–12,000 including office.

When to use it: Digital assets (ADGM has a bespoke Framework for the Regulation of Virtual Asset Activities, or FRAVA), fintech, smaller fund structures, and companies that prefer Abu Dhabi over Dubai. ADGM tends to be more competitively priced than DIFC for similar activities.

When not to use it: If your business is trade-oriented (DMCC or JAFZA). If you want the absolute lowest cost (RAK ICC).

JAFZA: the logistics powerhouse

Jebel Ali Free Zone is the oldest (established 1985) and largest trade-oriented free zone in the UAE. It sits next to Jebel Ali Port—the largest seaport in the Middle East—and is the natural home for import-export, logistics, and manufacturing operations.

What you get: A Free Zone Establishment (FZE, single shareholder) or Free Zone Company (FZCO, multiple shareholders). Access to office space, warehouses, and industrial land adjacent to the port. Customs and logistics integration.

What it costs: Initial registration: AED 10,000 (US$2,720). Trade licence: AED 5,500–12,000/year. First-year total including lease, establishment card, and visa: AED 40,000–60,000 (US$10,900–16,350). Warehouse packages start from AED 50,000/year.

When to use it: Import-export businesses, logistics companies, manufacturers, and any business that needs proximity to port infrastructure. JAFZA’s reputation with international banks and trading partners is strong.

When not to use it: If you have no physical goods to move. If you need a common-law legal framework. If cost is the primary driver and you do not need a warehouse.

Corporate tax: the common ground

Since June 2023, all five free zones are subject to UAE corporate tax at 9% on taxable income exceeding AED 375,000. However, entities that qualify as a ‘Qualifying Free Zone Person’ (QFZP) may benefit from a 0% rate on qualifying income.

To qualify as a QFZP, an entity must:

• Maintain adequate substance in the free zone
• Derive ‘qualifying income’ (broadly, income from transactions with other free zone persons, or certain passive income)
• Not have elected to be subject to the standard 9% rate
• Comply with transfer pricing documentation requirements
• Prepare audited financial statements

Non-qualifying income (including income from transactions with mainland UAE entities) is taxed at 9%.

Economic substance: another common thread

All five zones are subject to the UAE’s economic substance regulations. Entities carrying on ‘relevant activities’ must demonstrate that they have adequate:

• Direction and management in the UAE
• Employees (or outsourced equivalents)
• Operating expenditure
• Physical premises

The relevant activities list covers banking, insurance, fund management, IP holding, shipping, holding company business, and others. Pure holding companies face a reduced substance test.

How to choose

Start with the activity. Financial services → DIFC or ADGM. Trading and commodities → DMCC. Logistics and manufacturing → JAFZA. Holding structures on a budget → RAK ICC.

Then consider cost. If the annual cost difference between zones is AED 30,000–40,000 (US$8,000–11,000), and you are running the entity for five years, that is a US$40,000–55,000 decision. It deserves proper analysis.

Then consider credibility. For some counterparties—particularly institutional investors and banks—a DIFC or ADGM entity carries more weight than a RAK ICC company. This is not always rational, but it is real.

How CompCal helps

Once you have chosen your zone, the compliance calendar begins. Licence renewals, audit submissions, economic substance returns, corporate tax filings, and beneficial ownership declarations all run on different schedules and carry different penalties for each zone.

CompCal tracks all of it. Add your entities, and the system monitors every deadline across every UAE free zone.

Get started with CompCal and stop tracking UAE compliance in spreadsheets.