Free zones for tech and software startups

A tech or software startup choosing a UAE free zone needs to check that the zone's activity list covers its exact software or IT work, how many visas the zone will issue as the team grows, what office space that requires, how to protect its intellectual property, and how the free zone corporate tax rules treat software income. The official rules come from the UAE Government portal, the Federal Tax Authority (FTA) and Ministerial Decision 229 of 2025; packages and quotas come from each zone. The table lists zones that cover IT and software in our data, sorted by the lowest package each publishes.

Figures are as published by each zone with the date checked; see how we verify. Activity fit is our own assessment from published licence types.

Which licences cover software and IT

Free zones publish their own licence types and activity lists, and the wording for tech work varies: software development, software publishing, IT consultancy, app development, cloud or data services, and systems integration may be listed as separate activities. Points to confirm with the zone:

• Each revenue model has an activity. Building software for clients, selling subscriptions and providing IT support can be different activities.
• Hardware or reselling. If you sell devices or resell third-party licences, ask whether that needs a trading activity alongside a service licence.
• Selling online. If customers buy through your website or an app store, ask whether an e-commerce activity is needed. The e-commerce guide covers this.

Browse zones by activity on the IT and software page and the research and technology page.

Hiring a team

According to the UAE Government portal, work permits and residence visas for free zone employees are applied for through the free zone authority, and the number of visas a business can get depends on factors such as the package it signs up for; the portal advises checking with the free zone authority on eligibility to increase a quota. It also states that free zone employees are generally covered by the zone's employment regulations together with Federal Decree-Law 33 of 2021 (the UAE Labour Law), and that DIFC and ADGM have their own employment frameworks.

The table below uses our team reference set-up (three visas), so you can compare first-year cost for a small team.

The guide to hiring staff in a free zone covers the process, and cheapest set-up for a team with three visas ranks zones across all activities.

Office needs as the team grows

Because visa numbers depend on factors such as the package, a package that suits one founder may not cover a team. Each zone page lists the office types and visa quotas the zone publishes, from flexi-desks to private offices. Ask the zone how many visas each package and office type allows, and what moving to a larger one costs at renewal.

Substance matters for tax as well as visas. The FTA's Free Zone Persons guide (May 2024) states that, to benefit from the 0% rate on Qualifying Income, a company must carry out its core income-generating activities in a free zone and have adequate assets, full-time employees and operating expenditure there. It may outsource core income-generating activities to other persons in a free zone with adequate supervision. For research and development relating to Qualifying Intellectual Property, it may also outsource to any person in the UAE or to unrelated parties outside the UAE, again with adequate supervision.

Registering intellectual property in the UAE

The UAE Government portal states that the Ministry of Economy and Tourism is the competent authority to register and protect intellectual property in the UAE, including trademarks and intellectual works (copyright), and that applications are made through the ministry's website. Among protected works it lists smart device applications, software and software applications, databases and similar works identified by a resolution of the Minister. The portal names the governing laws:

• Federal Decree-Law 36 of 2021 on Trademarks
• Federal Law 38 of 2021 on Copyrights and Neighbouring Rights
• Federal Law 11 of 2021 on the Regulation and Protection of Industrial Property Rights, with Cabinet Resolution 6 of 2022 as its executive regulations

The portal describes a patent as the protection title granted for an invention, and lists patent services among the ministry's digital services. For current fees, documents and processing times, check the ministry's service pages directly.

How the free zone corporate tax regime treats software income

Under the FTA's guide, a Qualifying Free Zone Person pays 0% on Qualifying Income and 9% on other taxable income. For a software business, three parts of the rules are relevant:

Software is not a listed Qualifying Activity. Software development and IT services do not appear in the list in Article 2 of Ministerial Decision 229 of 2025.

Sales to other Free Zone Persons. The FTA's guide states that income from transactions with other Free Zone Persons can be Qualifying Income where they are the Beneficial Recipient and the transaction does not relate to an Excluded Activity. Ministerial Decision 229 of 2025 lists transactions with natural persons as an Excluded Activity, which is relevant to consumer apps and subscriptions.

Qualifying Intellectual Property. The FTA's guide defines Qualifying Intellectual Property as patents, copyrighted software and rights functionally equivalent to a patent, and states that it does not include trademarks or other marketing-related assets. Income from it is Qualifying Income only to the extent there is a nexus with the company's own research and development spending: the guide states that the portion of income attributable to acquired IP, or to R&D outsourced to a related party outside the UAE, does not give rise to Qualifying Income. Article 4 of Ministerial Decision 229 of 2025 sets out the calculation, including a 30% uplift on qualifying expenditure capped at overall expenditure, and requires records proving ownership, the expenditure incurred, the income derived and the link between them. The FTA's guide adds that income from other intellectual property does not give rise to Qualifying Income.

Other points from official sources:

• De minimis. Non-qualifying revenue must not exceed the lower of 5% of total revenue or AED 5 million in a tax period (Ministerial Decision 229 of 2025). Failing a condition removes the status for that tax period and the four that follow.
• Compliance. The FTA's July 2024 bulletin states that every Free Zone Person must register for corporate tax and file a return within 9 months of the period end, and that a Qualifying Free Zone Person must keep audited financial statements.
• Small Business Relief. Ministerial Decision 73 of 2023, as amended by Ministerial Decision 131 of 2026, sets an AED 3 million revenue threshold for tax periods ending on or before 31 December 2029 and excludes Qualifying Free Zone Persons.

How each of your revenue streams is classified depends on your contracts, customers and development history; a licensed tax adviser can assess it. See the Qualifying Free Zone Person guide.

Selling to mainland customers

The UAE Government portal states that a free zone company selling goods or services locally must work through a licensed mainland distributor or establish a mainland branch or company. If your customers are UAE companies outside free zones, the free zone vs mainland guide sets out the routes, including Dubai's Executive Council Resolution 11 of 2025.

Next steps

Shortlist zones from the tables, then confirm in writing the activity wording, the visa quota for each office type and the renewal cost. The free zone finder narrows zones by activity, visas and budget, and the suitability check by business model sets out the wider questions.