UAQ Free Zone Tech Business Setup
for Software and IT Founders
Umm Al Quwain Free Trade Zone is the lowest entry point into a UAE licence, starting from around AED 5,500 a year. It is also one of the very few that puts medical insurance inside the package price rather than outside it. Here is what that actually gets you.
Who this suits
Expecting to hire a team soon? RAKEZ carries a higher visa quota →
Is UAQ a real free zone, or a technicality?
It is a real free zone, established by the Umm Al Quwain government and issuing licences recognised across the UAE. The company you get is a proper legal entity with 100% foreign ownership, a trade licence, an establishment card and the right to sponsor residence visas. The reason it is cheaper is location, not legitimacy. You are not buying a Dubai address, and if your clients and your bank do not need one, you are not losing anything by skipping it.
What does it cost, and what moves the number?
A licence with no residence visa starts at around AED 5,500 a year on a commercial, consultancy or service licence, which is the band almost every software and IT business falls into. The renewal fee is the same every year, so there is no low first year followed by a jump.
Four things move it up:
How many residence visas you need
The main lever. A licence with no visa is the floor. The packages step up in single visas from there, so you only pay for the people you are actually bringing.
Which licence type you take
A commercial, consultancy or service licence is the cheapest. A general trading licence costs more, and premium variants of both cost more again. A software or IT business almost always sits in the cheapest band.
Whether you need a premium licence
Most technology businesses do not. It is worth asking what a premium licence buys you before paying for one.
Activities beyond the ten included
Ten activities covers most software and IT businesses comfortably. Going wider costs more, charged annually.
As a channel partner we quote you the zone's own pricing. Tell us how many visas you need and what you sell, and we will give you the exact figure for your case rather than a range.
What is actually inside the package?
More than most zones at this price, and this is where it is worth reading carefully rather than comparing headline numbers.
The one worth pausing on is medical insurance. Health cover is mandatory for anyone on a UAE residence visa, and most zones quote the licence without it, so the number you compared is not the number you pay. Here it sits inside the package. It is a small thing that quietly closes part of the gap between a cheap zone and an expensive one.
Do I have to be in Umm Al Quwain?
No. The coworking space and lease agreement included in the package are what satisfy the licensing and visa requirements. Where you actually sit and write code is your own business, and plenty of UAQ licence holders live in Dubai or Sharjah. For a software business this is usually the least important question on the list, which is why it is worth answering early and then forgetting about.
Freelance permit or a company?
UAQ offers a freelance permit including a residence visa for around AED 10,000, which is the cheapest legitimate route to UAE residency if you are billing under your own name. The trade is real though. You are trading as an individual rather than a company, which changes how you contract, how you bring in a co-founder later and how some enterprise clients will treat you on procurement. If you are a solo consultant with a settled client list, it is a good answer. If you expect to hire, raise, or sell software as a product, take the licence.
What does the licence price not cover?
Activities beyond the ten included, charged annually rather than once. Amendments after setup, such as a trade name or shareholder change. Dependant visas for a spouse or children, which are separate from your own. And the whole compliance side: your bookkeeping, your VAT returns and your Corporate Tax filing. That last group is the one founders underestimate, because no setup quotation mentions it.
Will I pay Corporate Tax?
You must register regardless, including if you expect to pay nothing, and late registration carries an AED 10,000 penalty. Whether you actually pay is a separate question.
Most small software businesses reach 0% through Small Business Relief, which applies where revenue is at or below AED 3 million, is elected on your return, and needs no audit. The Qualifying Free Zone Person route also reaches 0% but requires audited accounts every year, and for a lean company the audit usually costs more than the tax it saves.
UAQ or RAKEZ?
The honest answer, and the two are close enough that it is worth a minute.
UAQ has the lower entry point and puts medical insurance inside the package. The visa packages step up one at a time to four. It is the cleanest answer for a solo founder or a two person team who wants the lowest genuine all in number.
RAKEZ costs slightly more at the floor and leaves insurance out, but most of its coworking packages carry a visa quota of eight. That matters if you expect to hire beyond a handful of people, because it means you can grow without moving to an office or changing zone.
We are a channel partner for both, so we have no commercial reason to steer you. The question we would ask you is simply how many people you expect to have on visas in two years.
Who does the work?
We are a UAQ FTZ channel partner, so the setup is handled by us rather than passed to a third party: activity selection, trade name, licence application, residence visa, Emirates ID, establishment card and the bank account, which we stay with until it opens. Then the part most setup agents cannot do. Corporate Tax registration and filing, VAT registration and returns, and cloud bookkeeping with monthly management accounts, all by a chartered accountant. One firm from the licence to the year end.
What we handle for UAQ companies
UAQ Free Zone setup FAQs
How much does a UAQ Free Zone licence cost?
A licence with no residence visa starts at around AED 5,500 a year on a commercial, consultancy or service licence, which is the band most software and IT businesses fall into. Adding a residence visa moves you up a tier, and the packages step up one visa at a time to four. The renewal fee is the same every year, so there is no cheap first year followed by a jump. Confirm current pricing with us before you commit, because zone pricing changes.
Is medical insurance included?
Yes, on the standard packages, for the visa holder. This is worth checking carefully when you compare zones, because health cover is mandatory for anyone on a UAE residence visa and most zones leave it out of the headline price. It is one of the few places where the cheapest quote is also the more complete one.
Do I have to live or work in Umm Al Quwain?
No. The package includes a coworking space with a lease agreement, which is what satisfies the licensing and visa requirement. Where you actually work day to day is your own business. Plenty of UAQ licence holders live in Dubai or Sharjah, and a software business rarely needs to be anywhere in particular.
Can I open a UAE bank account with a UAQ licence?
Yes, and bank account opening assistance is included in the package. Be realistic about the timeline: UAE bank onboarding takes weeks rather than days for any new company in any zone, and banks ask more questions of a company in a lower cost zone than one with a Dubai address. Having clean documentation and a clear explanation of what your business does matters more than which zone issued the licence.
What is the freelance permit, and should I take it instead?
UAQ offers a freelance permit that includes a residence visa for around AED 10,000. It suits a solo developer or consultant billing under their own name who does not need a company yet. The trade is that you are trading as an individual rather than a company, which limits how you contract, how you take on a co-founder later and how some clients will treat you. If you expect to hire or raise, take the licence.
Will I pay Corporate Tax on a UAQ company?
You must register regardless, and late registration carries an AED 10,000 penalty. Whether you pay anything is a separate question. Most small software businesses reach 0% through Small Business Relief, which applies where revenue is at or below AED 3 million and needs no audit. The Qualifying Free Zone Person route also reaches 0% but requires audited accounts every year, which for a lean company often costs more than the tax it saves.
Do I still need to keep books and file VAT?
Yes. This is the part the licence price does not tell you about. Every UAE company must maintain accounting records, register for Corporate Tax and file a return. VAT registration becomes mandatory once your taxable supplies pass AED 375,000 in a rolling twelve months, and voluntary from AED 187,500. None of this changes because you chose a cheaper zone.
UAQ or RAKEZ, which should I pick?
UAQ has the lower entry point and includes medical insurance, which makes it the cleanest choice for a solo founder or a two person team who wants the lowest all in number. RAKEZ carries a much higher visa quota on its coworking packages, which matters if you expect to hire beyond a handful of people without restructuring. Both are honest choices. We set up in either, so we have no reason to push you toward one.
Disclaimer
Licence pricing and package inclusions are set by Umm Al Quwain Free Trade Zone, are current at the time of writing and are subject to change. Any figure here is indicative and the zone's own quotation governs. The information on this page is general guidance only and does not constitute financial, tax, or legal advice. UAE tax rules and free zone regulations change, and every business is different. Please consult a qualified professional, such as Khizr UAE, before making any decision. Khizr UAE accepts no liability for any loss or damage arising from reliance on the content of this page.
Get the exact number for your case.
Book a free consultation with Sadik Panjwani, ACA. Tell us how many visas you need and what you sell, and we will price it properly, set it up, and keep it compliant afterwards.
Other free zones we work with