Masdar City is a planned city in Abu Dhabi that focuses on clean energy and sustainable living. It is built to reduce carbon emissions and use less energy. Inside Masdar City is the Masdar City Free Zone, which is a special area where businesses can start and grow more easily.

The Masdar City Free Zone is made for companies that want to work in areas like technology, research, energy, and environment. However, it also allows many other types of businesses, including consulting, media, healthcare, and education.

This blog explains how the Free Zone works, what business licences are available, and why it is a good place to start a company in 2025. It is helpful for people who are planning to set up a new company in the UAE or expand their existing business.

Why Choose Masdar City Free Zone in 2025

100% Foreign Ownership and Full Profit Repatriation

Masdar City Free Zone allows foreign investors to fully own their companies without needing a local sponsor or partner. This rule applies to all business types in the Free Zone. You also have the right to send all your profits and capital out of the UAE without any restrictions. This gives you full control over both business decisions and your company’s money.

0% Corporate Tax and Import Duties (If You Qualify)

If your business carries out only qualifying activities within the Free Zone and meets the UAE’s corporate tax rules, you can avoid paying corporate tax. This helps reduce your yearly operating costs. Also, when you import goods into the Free Zone or export them out of it, you do not pay customs duties. This makes Masdar City Free Zone a cost-effective option for companies that trade goods or equipment.

Operate Near Major Transport and Business Centres

Masdar City is located just 5 minutes from Zayed International Airport in Abu Dhabi. It is 20 minutes from central Abu Dhabi and 45 minutes from Dubai by road. This location helps you travel easily between meetings, ship products faster, and connect with other businesses across the UAE and beyond.

Access to an Innovation and Technology Ecosystem

Over 1,000 companies operate in Masdar City, including global firms and startups. These include Siemens Energy, Masdar (Abu Dhabi Future Energy Company), the International Renewable Energy Agency (IRENA), and the Mohamed bin Zayed University of Artificial Intelligence. If you start a business in the Free Zone, you can connect with these organisations, attend industry events, and join a growing network focused on innovation, sustainability, and future industries.

Sustainable Infrastructure and Green Credentials

Masdar City offers energy-efficient offices, LEED-certified buildings, and shared workspaces that support low-carbon operations. These buildings help reduce your company’s energy use and operating costs. You can choose a workspace that fits your business size and budget, from virtual desks to private offices. By working in a green-certified zone, you also strengthen your company’s public image as a responsible and future-ready business.

Legal Structures Available

Masdar City Free Zone offers three types of legal structures for companies. Each one has its own setup process, ownership rules, and legal responsibilities. Choosing the right structure is important because it affects how your company operates and how it is legally protected.

1. Free Zone Limited Liability Company (FZ-LLC)

A Free Zone Limited Liability Company is a separate legal business. This means the company has its own legal identity, different from its owners. It can be owned by one person, several people, or even another company.

This structure gives you limited liability. If the company has debts or legal issues, only the company’s own money and assets can be used to pay them. Your personal money, car, or house cannot be taken to cover company debts. This protects your personal property if something goes wrong in the business.

You can use an FZ-LLC for most business types allowed in the Free Zone, such as services, trading, or light manufacturing. You must submit your application and documents through Masdar City Free Zone’s One-Stop-Shop portal. This includes:

• details of your chosen business activity,

• shareholder names and ownership shares,

• copies of IDs or passports,

• and your lease agreement for office space.

This option is best for:
New businesses, small or medium-sized companies, or investors who want full control and legal protection.

2. Branch of a Foreign Company

If you already own a company outside the UAE, you can open a branch of it in Masdar City Free Zone. This branch is not a new company. It acts as part of your foreign business. It must use the same name and do the same business activity as your company abroad.

Your main company stays responsible for anything the branch does. If the branch signs a contract or has unpaid bills, the parent company must take care of it.

You don’t need to invest new money to open a branch. But you must show that your foreign company is active and legal. You need to submit official documents through the One-Stop-Shop. These documents must be approved and stamped by the UAE Embassy and local authorities.

This option is best for:
Companies from outside the UAE that want to enter the local market without starting a new business.

3. Branch of a UAE-Based Company

If you already have a company licensed in the UAE either on the mainland or in another free zone, you can open a branch of that company in Masdar City Free Zone. This option allows you to expand your existing UAE operations into Masdar City without setting up a new company from scratch.

Unlike a foreign branch, which brings an international business into the UAE, a UAE-based branch helps you grow your local presence. It is especially useful if you want to access the benefits of Masdar’s sustainable business environment, flexible office options, and tax advantages, while keeping your current licence and ownership structure.

The branch must use the same trade name and carry out the same activity as your parent company. You do not need to add capital. However, your parent company remains legally responsible for all business done under the branch.

You will need to provide a valid UAE trade licence, board resolution approving the branch, and proof of active business status. The registration process is handled through the Masdar City Free Zone One-Stop-Shop.

This option is best for:
UAE-registered businesses that want to extend their footprint into Masdar City Free Zone while maintaining a single company identity.

Licence Types in Masdar City Free Zone

To operate in Masdar City Free Zone, every business must apply for a licence. The type of licence you need depends on the main activity of your business. The Free Zone offers several licence categories that cover a wide range of sectors. Each licence is issued by Masdar City Free Zone Authority and must be linked to a valid office lease within the Free Zone.

Here are the main licence types available:

1. Service Licence

The Service Licence is issued to companies that provide non-physical services such as consulting, advisory, design, and project-based solutions. This licence is suitable for firms that do not deal with physical goods but instead offer knowledge-based or skill-based services to clients.

Examples of activities that fall under this licence includes:

• Management consultancy

• Software development and IT services

• Legal or accounting advisory

• Marketing and communications

• HR outsourcing and recruitment

Companies holding a Service Licence typically operate from private offices, shared workspaces, or flexi-desks inside the Free Zone. No warehouse or storage space is required.

This licence is commonly used by professional firms serving both local and international clients. In some cases, depending on the nature of the service, applicants may be asked to provide proof of professional qualifications or relevant experience.

Who should apply:
Freelancers, consultants, and service-based companies.

2. Trading Licence (Commercial Licence)

The Trading Licence, also known as the Commercial Licence, allows a company to engage in the import, export, sale, distribution, and storage of physical goods. This licence is required for businesses that are involved in buying and selling products either locally (through authorised channels) or internationally. It is also commonly used by companies seeking ADNOC vendor registration, which enables them to supply products to ADNOC and its subsidiaries as approved vendors.

Examples of activities that fall under this licence include:

• Import and export of electronics

• Wholesale of office equipment

• Distribution of food and beverages

• Trading of building materials

• General trading across multiple product lines

Businesses must list the specific goods they intend to trade during the application process. A General Trading Licence is available for companies that wish to trade in a wide range of unrelated product categories under one licence.

Companies with a Trading Licence may require a warehouse or storage unit, depending on the scale of operations. For mainland sales, a UAE-licensed distributor or agent is required.

Who should apply:
Product-based businesses, wholesale traders, import/export companies, and distributors.

3. Industrial Licence

The Industrial Licence is issued to companies that carry out light manufacturing, assembly, processing, or packaging of physical goods. This licence is suitable for businesses that require workspace for production activities, provided they meet Masdar City’s safety and environmental standards.

Examples of activities that fall under this licence include:

• Assembly of solar panels or electronics

• Packaging of consumer or food products

• Production of environmentally friendly goods

• Fabrication of light components or systems

Industrial operations must take place within approved facilities inside Masdar City Free Zone. The Free Zone Authority reviews each business plan to ensure compliance with operational guidelines. Activities involving hazardous materials or heavy industry are not permitted.

Who should apply:
Manufacturers, assemblers, packagers, and businesses involved in clean-tech production or low-impact industrial operations.

4. Freelancer Licence

The Freelancer Licence is designed for individuals who wish to operate as independent professionals under their personal name, without setting up a formal company. It is limited to specific fields where the business activity can be performed by one person and does not require employees.

Examples of activities that fall under this licence include:

• Graphic or web design

• Translation and editing

• Content creation or photography

• IT support or coding

• Business coaching or training

Freelancers must lease a flexi-desk or co-working space inside Masdar City Free Zone. They may need to submit a CV, portfolio, and proof of qualifications, depending on the activity. This licence does not allow for hiring staff or operating under a corporate name.

Who should apply:
Solo professionals working independently in media, tech, education, or consulting.

5. Sector-Specific Licences

Masdar City Free Zone also offers specialised licences tailored for companies working in regulated or high-impact industries. These licences may involve extra approvals or compliance requirements depending on the sector.

Examples of activities that fall under this licence include:

• Renewable Energy: Solar system design and installation, energy efficiency consulting, clean energy storage solutions.

• Clean Tech & ICT: Software development, digital infrastructure, green technology systems, smart mobility platforms.

• Healthcare Services: Health consultancy, wellness centres, telemedicine platforms, digital health solutions (subject to UAE healthcare regulations).

• Education & Research: Academic training, skill development programmes, research and development facilities.

• Property Development: Real estate development, facilities management, infrastructure advisory services.

• Oil & Gas Services: Technical services, maintenance and safety support for energy operations.

• Media & Events: Advertising, PR, event production, content creation, and brand consultancy.

These licences are typically linked to companies operating in strategic sectors aligned with Masdar’s focus on sustainability and innovation. Some activities may require additional documentation or pre-approvals from sector regulators (e.g. Department of Health, Department of Education, or Department of Energy).

Who should apply:
Companies working in renewable energy, technology, education, real estate, media, or other regulated industries that align with Masdar’s sustainability goals.

Business Setup Packages & Costs (2025)

Masdar City Free Zone offers several business setup packages to suit startups, freelancers, SMEs, and larger companies. Below are the main packages available in 2025, along with the key components that affect pricing:

1. Start-Lite Package

This package is designed for solo founders or entrepreneurs with simple business needs. It allows for only one shareholder and is ideal for those offering basic services or testing a new market.

• Registration Fee: AED 0

• Visa Eligibility: 1 visa

• Business Activities Allowed: 1 to 2 simple service or freelance activities

• Licence Fee: Starts from AED 7,000

• Office Space: Not included (virtual desk required separately)

Best for: Freelancers, solo consultants, or early-stage startups.

2. Start-Up Package

The Start-Up Package is suitable for small businesses looking to scale within the Free Zone. It supports multiple activities and offers more flexibility than Start-Lite.

• Registration Fee: AED 3,000 (one-time)

• Visa Eligibility: Up to 2 visas

• Business Activities Allowed: Up to 5

• Licence Fee: Starts from AED 10,000

• Office Space: Starts from AED 6,000 (flexi-desk or small private office)

Best for: New companies with one or two team members or multiple service offerings.

3. Business Package

The Business Package is made for growing companies that need broader activity options, more visas, and dedicated office space. It is customisable based on operational needs.

• Registration Fee: AED 3,000 (one-time)

• Visa Eligibility: Up to 6 visas

• Business Activities Allowed: Up to 6

• Licence Fee: Starts from AED 14,000

• Office Space: Starts from AED 10,000 (private office or shared suite)

Best for: Small to mid-sized firms expanding their UAE presence or hiring multiple employees.

4. Specialised Packages

Masdar City Free Zone also offers industry-focused packages with tailored features for specific types of businesses:

a) Women Entrepreneurship Package

• Encourages women-owned startups and solo businesses.

• Licence Fee: Starts from AED 6,000

• Office Space: Starts from AED 6,000

• Visa Eligibility: 1

b) Space Zone Package

• For businesses in the space technology sector.

• Licence Fee: Starts from AED 6,000

• Office Space: Starts from AED 10,000

• Visa Eligibility: Based on lease terms

c) SAVI Package (Smart and Autonomous Vehicle Industries)

• For tech firms in smart mobility and autonomous systems.

• Licence Fee: Starts from AED 6,000

• Office Space: Starts from AED 6,000

• Visa Eligibility: Up to 5 (depending on office type)

Factors Influencing the Total Setup Cost

The final cost of setting up a business in Masdar City Free Zone depends on several key factors:

1. Type of Licence

• Service licences generally cost less than general trading or industrial licences.

• Sector-specific licences may include additional fees or require third-party approvals.

2. Number of Business Activities

Adding multiple business activities under one licence can increase costs.

3. Office Space Type

• Flexi-desks are the most affordable (starting at AED 6,000/year).

• Private offices or customised workspaces are more expensive depending on size and location.

4. Visa Requirements

• Establishment Card (AED 1,500)

• eChannels registration (AED 2,500)

• Visa deposit (AED 2,500 per visa, refundable)

• Employment visa fee (approx. AED 3,050 for 2 years)

• Medical test and Emirates ID fees (around AED 800–1,000 per person)

5. Company Structure

Setting up a branch vs a new FZ-LLC may affect documentation and approval costs.

6. Document Processing

Costs for notarisation, attestation, legal translation, and PRO services (approx. AED 1,000–2,500 depending on company type and country of origin).