Many entrepreneurs set up their company in one free zone and later realize it may not be the best fit.
Maybe the renewal costs increased.
Maybe you need a different activity.
Maybe banking became difficult.
Maybe you want a better location.
Or maybe your business model evolved.
The question then becomes simple.
Can you move your company from one free zone to another in the UAE?
The short answer is yes, but not in the way most people think.
Let’s break it down properly.
Can You Directly Transfer a Free Zone Company?
In most cases, you cannot simply “transfer” your company license from one free zone to another like you would move apartments.
Free zones in the UAE operate as separate jurisdictions. Each one has its own authority, regulations, licensing framework, and internal compliance systems.
Because of that, there is usually no direct transfer mechanism between two different free zones.
Instead, what typically happens is one of the following:
- You incorporate a new company in the new free zone and close the old one
- You migrate using a structured legal process if allowed
- You convert your structure depending on the authority rules
The process depends entirely on your current free zone and the one you are moving to.
Why Do Businesses Move Free Zones?
Before understanding the process, it helps to understand why businesses relocate between free zones in the first place.
1. Cost Optimization
Some free zones increase renewal fees over time. Others introduce additional compliance charges. Entrepreneurs often move to more cost efficient jurisdictions.
2. Banking Issues
Certain free zones are viewed more favorably by banks. If your company struggles to open or maintain a bank account, shifting to a different jurisdiction can help.
3. Change in Business Activity
You may have started with a consultancy license and now want to add trading. Not all free zones allow every activity combination.
4. Visa Requirements
Some free zones offer better visa quotas or more flexible employment packages.
5. Physical Presence
If you now require warehouse space, retail units, or flexi desk upgrades, you may need a different free zone that supports your operational needs.
Step by Step: How the Move Typically Works
Although procedures vary slightly between authorities, the general process looks like this.
Step 1: Evaluate Your Existing Company Status
Before doing anything, check:
- Are you mid license term or near renewal?
- Are there any outstanding fines?
- Do you have active visas under the company?
- Do you have pending contracts or liabilities?
You cannot close or restructure a company if there are compliance issues.
Step 2: Decide the New Free Zone
Not all free zones are the same.
Some are focused on media.
Some on technology.
Some on logistics.
Some are more flexible for consultants.
Compare:
- Setup cost
- Renewal cost
- Visa quota
- Office requirements
- Corporate tax implications
- VAT registration if applicable
- Banking compatibility
Choosing incorrectly again will only create more friction later.
Step 3: Choose the Transition Strategy
There are generally two main routes.
Option A: Set Up New Company First, Then Close Old One
This is the most common and safest method.
- Register the new company
- Open bank account
- Shift contracts and operations
- Cancel visas in old company
- Apply visas in new company
- Close old license
This ensures business continuity.
Option B: Close First, Then Reopen
This is riskier if your operations depend on:
- Active visas
- Merchant accounts
- Ongoing contracts
- Bank account stability
It may create gaps in operations.
What Happens to Your Bank Account?
Your corporate bank account is linked to your company’s trade license.
If you close the company, the bank account will eventually be frozen and shut down.
That means if you are moving free zones, you should:
- Open a new bank account under the new company
- Gradually transition payment gateways and client invoices
- Inform clients of new bank details
- Maintain proper accounting separation
Never mix transactions between two entities.
What About Payment Gateways Like Stripe?
If you are using international gateways:
- You will need to update company documents
- Merchant accounts may require new KYC approval
- You may need to re verify beneficial ownership
Plan for a short transition period where both entities operate in parallel to avoid revenue disruption.
What Happens to Visas?
If you have employees or your own residence visa under the company:
- Existing visas must be cancelled under the old free zone
- New entry permits or status changes must be processed
- Emirates ID and medical tests may be required again
Timing is important to avoid overstaying fines.
Corporate Tax and VAT Considerations
With UAE corporate tax now active at 9 percent for qualifying profits, structural planning matters more than before.
When moving free zones, consider:
- Whether your new free zone qualifies as a Free Zone Person
- Whether you meet substance requirements
- Whether you conduct mainland transactions
- Whether you are VAT registered
You must update:
- Federal Tax Authority records
- VAT registration details if applicable
- Corporate tax registration
Ignoring this can create compliance penalties.
Is There a Legal Migration Option?
In some cases, authorities allow a form of license migration or branch transfer. However, this is not universally available.
It depends on:
- The specific free zones involved
- The legal structure of your company
- Shareholder approval
- Clearance certificates
Always confirm with both authorities before assuming migration is possible.
Cost of Moving Between Free Zones
Many founders underestimate the cost.
You should account for:
- New license fee
- Visa costs
- Office or flexi desk charges
- Establishment card fee
- Bank compliance costs
- Cancellation fees of old company
- PRO or consultancy fees
In some cases, the move may cost almost the same as setting up fresh.
That is why planning is critical.
Common Mistakes to Avoid
- Closing old company before securing new bank account
- Forgetting to transfer merchant accounts
- Not informing clients about invoice entity change
- Ignoring visa cancellation timelines
- Overlooking VAT updates
- Assuming all free zones allow identical activities
Rushed decisions often create bigger problems.
When Does It Make Sense to Move?
Moving makes sense if:
- Your renewal costs are unsustainable
- Banking restrictions are limiting growth
- Your activity has expanded beyond your license scope
- You require better infrastructure
- You are restructuring for corporate tax efficiency
If none of these apply, sometimes staying and optimizing internally is better.
How Long Does the Process Take?
A smooth transition typically takes:
- 1 to 3 weeks for new company registration
- 2 to 6 weeks for banking approval
- 1 to 3 weeks for visa processing
- 2 to 4 weeks for old company liquidation
Timelines vary depending on complexity.
Planning overlap is important so your business does not pause.
Final Thoughts
Moving your business from one free zone to another is possible, but it is not a simple address change.
It is effectively closing one legal entity and creating another, unless a rare migration structure is allowed.
If done strategically, it can reduce costs, improve banking relationships, and align your company better with your growth plans.
If done poorly, it can freeze operations and create compliance risks.
Before making the move, evaluate your reasons clearly, compare jurisdictions properly, and structure the transition in phases rather than in panic.
If you want expert guidance on choosing the right free zone and restructuring your company without hidden fees, you can connect with GenZone. They help entrepreneurs move, restructure, and set up correctly in Dubai while keeping compliance and long term scalability in focus.
