How to Set Up a Company in Masdar City Free Zone

As a business focused on sustainability and innovation, it’s extremely important to establish in a Free Zone that shares the same vision.

Masdar City not only shares its vision; it extends its support to help you with everything you need to reach your business goals, whether it’s sustainable infrastructure or an R&D ecosystem that helps you stay updated on new technology.

If you’re already familiar with Abu Dhabi Free Zones, but you’ve decided to establish your company in Masdar City because of its specialization.

In this guide, we’ll walk you through everything that you need to know to have a smooth setup process, from license types to the actual formation stages. Then, we’ll share some important post-license steps you need to complete to help your business remain compliant.
 

What is Masdar City Free Zone and where is it located?

Masdar City is a dedicated Free Zone that gives an opportunity to businesses focused on sustainability and innovation to achieve their business goals and contribute to the UAE’s vision for sustainability by providing sustainable infrastructure and reaching an R&D ecosystem that supports continuous development. 

Its setup packages aren’t limited to large corporations; it also offers competitive packages for startups and SMEs that have the same vision.

It’s located in Abu Dhabi, with just a 20-minute drive to Zayed International Airport, and it’s also connected to other Emirates in the UAE, including Dubai, providing easy access to global markets and travel within the country.

Who is Masdar City Free Zone best for?

Masdar City built a successful model for more than 2,500 businesses that share the same vision, but this doesn’t necessarily mean it suits all business models. Make sure you check whether the conditions below match your business type to ensure that Masdar Free Zone is the right option for you.
 

• Renewable energy-focused businesses that produce solutions that reduce costs and align with the UAE’s vision for sustainability.
• Businesses that offer information and communications technology to help other businesses achieve sustainable performance management using their innovative software.
• Innovative businesses that offer customized solutions for clients to address their challenges and help solve them, including marketing and HR companies.
• Healthcare businesses that use the latest technologies and data analysis to improve diagnosis accuracy for patients in Masdar City.
• Companies that offer professional services for clients and businesses that share the same sustainable and innovative vision.
• Trading businesses that export and distribute goods, such as healthcare products and clean-tech equipment.
• Retail businesses that sell goods directly to consumers within the Free Zone, such as F&B businesses, helping you make a similar impact to the Mainland companies in Abu Dhabi.

Why choose Masdar City Free Zone instead of a cheaper free zone?

Although other Free Zone options, such as Expo Dubai, have a similar focus and offer advantages that will help businesses during operations, you may also find lower setup costs in STRIP Free Zone in Sharjah. The Free Zone choice will heavily depend on your growth plans and the environment you want to establish your business in.

Masdar City can be your preferred choice if you are eager to be part of a leading and well-established Free Zone. Masdar City isn’t just a specialized Free Zone that shares a vision for sustainability; its strategic location has helped its innovative projects reach more than 35 countries regionally and internationally, while benefiting from the R&D ecosystem to develop continuously new projects.

Not only in one cluster, but it has several projects in different clusters, such as renewable energy, sustainable urban development, and clean tech innovation, with clear evidence of the Free Zone’s impact on these projects over the past 20 years.

What business activities and licence categories are available in Masdar City Free Zone?

It offers several licence categories that depend on your business model and the activities you’re willing to conduct, and you can choose from more than 1,000 business activities across various sectors that we’ll list below.
 

• The renewable category suits businesses that produce special solutions and technologies, such as developing solar and wind power.
   
• The clean ICT category is designed for companies that develop software to support sustainability and digitisation processes, such as reducing waste in smart irrigation systems. 
   
• The service category is designed for companies that offer professional services to operating businesses in Masdar City, such as marketing and events or HR services.
   
• The energy category is suitable for businesses operating in a broader category, including companies utilizing and distributing energy.
   
• The healthcare services category is designed for businesses that offer medical services and use the latest technologies to help patients.
   
• The property development services category is for businesses involved in transforming land into functional and green infrastructure that other companies can rely on for their operations.
   
• The regional HQ for trading and holding companies category is suitable for companies that use Masdar City as regional headquarters or businesses engaged in trading and holding assets.
   
• The data center category is for businesses that develop innovative solutions to contribute to sustainability goals, such as energy efficiency and resource management.
   
• The oil and gas category is for companies that provide services to oil and gas operators to manage resources and integrate cleaner technologies into that sector
   
• The retail and F&B category is designed for businesses selling products directly to customers in Masdar City, including restaurants and stores.

You’re allowed to add business activities that are related to the license category you’ve chosen, which is a worthwhile benefit that many Free Zones also offer because of its importance, including Dubai South and Meydan Free Zone.

What legal structures can you register in Masdar City Free Zone?

The legal type decision has to be matched with the management style you wish to have within your business, as it directly influences the responsibilities and liabilities among shareholders, which affect the internal operations.
 

What documents are usually required for Masdar City Free Zone setup?

The document preparation phase can directly affect your setup timeline, so it’s important to ensure you have all required documents before proceeding with company formation in Masdar City Free Zone. Below are the common required documents the Masdar authority will ask you to prepare. 
 

Step-by-step: how to set up a company in Masdar City Free Zone

If you made it to here and understood the setup requirements we’ve explained, the setup process will be much easier for you, as you’ll just have to follow the same steps we outline to have a smooth formation process.

As a business that develops innovative sustainable solutions by evaluating data to manage resources wisely, you certainly recognize the value of data-driven decisions since you apply them to other businesses, but didn’t you think that your own business needs the same to grow?

Growing your business is linked to the quality of your decisions, which you can’t make correctly without the right data in place. Here, Daftra comes in by offering a centralized system that combines all business departments to provide a clearer picture of what is actually happening internally, so you can make efficient decisions.

What is the difference between startup packages and standard company setup in Masdar?

Masdar City has developed a lot of setup packages, such as the startup package, which mainly serves as a simple and affordable entry point for startups and SMEs. It usually offers fewer business activities than other packages, including the business and enterprise packages, but it still provides an affordable way to establish your company.

If you have a large corporation or international business, you can choose the enterprise package or lease a larger facility to enjoy higher visa eligibility, and it will also help with business operations and hiring more employees.

You can also check other Free Zones that offer competitive setup packages and share a similar vision to what you might need, such as STRIP in Sharjah Free Zones.

How much does it cost to set up in Masdar City Free Zone?

The exact costs depend heavily on your business needs, including the number of business activities, the facility, and visa requirements. 

As we’ve mentioned earlier, Masdar City offers several setup packages to meet different business requirements, such as the startup and innovative package that serves as an affordable entry point for startups and SMEs in various sectors. Usually, you’ll find that their costs range from AED 7,000 to AED 12,000.

If you need an advanced setup package that includes higher visa eligibility and a wider number of business activities, you can select the business or enterprise package, which costs AED 17,500 and AED 27,000, respectively.

To compare setup package details, check the license package section on their website, which will help you make the right business decision.

You can also check Dubai Free Zones costs, especially since Dubai Expo Free Zone already follows the same path for sustainability goals.

How do visas and office space work in Masdar City Free Zone?

One thing that would help you fully understand how visas and office space work in Masdar City is by understanding the link between them and how they affect each other.

Your company’s visa eligibility is tied to the facility type you choose, which means larger space equals higher visa eligibility; it’s a direct correlation.

Although you need to lease the office during the registration process to obtain the trade license, which may provide less insight into your future needs, you can still upgrade your facility to a larger one later. 

You’ll find several facility types that suit different business needs and budgets, from startups to large corporations, which you can explore on the Masdar City website. For example, if you have a tech startup and need an affordable option, you can consider the flexi desk, which usually starts from AED 6,000. 

What happens after you get the Masdar City licence?

It’s important to pay close attention to the steps that you need to take after establishing your company, as these post-license steps serve as solid infrastructure for all upcoming projects that you’ll undertake to grow your company in Masdar City Free Zone.

To ensure that you follow the right steps, you should invest in an ERP system that increases the company’s efficiency in using all available resources. Daftra can help you in that by doing the following:

Common mistakes businesses make when choosing Masdar City Free Zone

Before getting involved in all registration processes, it’s important to check these common mistakes that businesses make, so you can prevent them from the start.

1. Misidentifying the business model alignment: Masdar City is a specialized Free Zone that focuses on innovative businesses that share a sustainable vision, which is reflected in the sectors as well. If your business focuses on another sector, it’s better to explore the UAE Free Zones guide to see what aligns with your business model.

    

2. Selecting the wrong package from the start: It’s important to choose the package that provides the business numbers and visas you need, because if you find out you’ve chosen the wrong setup package, you’ll get involved in adding additional activities and visa processes from the start.

    

3. Underestimating the facility and visa requirements: It’s essential to understand the correlation between the facility type and the number of visas you’ll obtain, as it directly affects the company’s operational requirements and ability to sponsor employees.

    

4. Neglecting budget planning: The setup process doesn’t end with just receiving your licence, as you’ll invest in an ERP system to support business growth, besides the renewal costs you’ll need to handle after the first setup year. 

FAQs:

Can a single licence include multiple activities in Masdar Free Zone?

Yes, you can have several business activities under one licence, but it depends on the setup package you choose. Although the higher-cost packages offer more business activities by default, you can still apply for additional business activities with additional fees.

Can I set up a company in Masdar Free Zone without renting an office? 

No, it’s essential to register an office in Masdar City to continue the registration process, because if you don’t lease an office, the Free Zone authority won’t issue your license.

What is the minimum share capital requirement at the Masdar City Free Zone? 

According to Masdar City, the branch structure that includes foreign and UAE companies doesn’t require a minimum share capital, but the LLC structure usually requires AED 50,000 to establish the business.

How long does it take to register my company in Masdar Free Zone?

Although the exact duration may be different from one business to another depending on the completeness of your documents and whether the authority needs additional approvals, on average, the setup process can be completed within 5 working days.