IFZA Activity List UAE: A Complete Guide

What is IFZA and Why it Matters? 

The International Free Zone Authority (IFZA) in Dubai has quickly become one of the UAE’s most popular free zones for entrepreneurs and international businesses. It allows 100% foreign ownership, offers competitive setup costs, and provides a straightforward company registration process. Because IFZA aligns with UAE tax rules, qualifying businesses can also benefit from zero corporate tax on certain income streams, making it highly attractive for start-ups and global firms looking for a Middle East base.

Beyond cost savings, IFZA is known for its streamlined digital services, flexible office solutions, and wide licensing options. This makes it easier for small and medium enterprises (SMEs) to launch quickly without navigating multiple government departments.

How IFZA Organises Business Activities?

The International Free Zone Authority (IFZA) in Dubai offers a diverse range of business activities, categorized into specific license types to streamline the setup process. Understanding these categories is crucial for selecting the appropriate license for your business operations.

License Groupings at IFZA

IFZA classifies its business activities into several main license types:

• Commercial License: Ideal for businesses engaged in trading activities, including import/export and general trading.

• Professional License: Suited for service-oriented businesses such as consultancy, IT services, and media.

• General Trading License: Allows businesses to trade a wide range of products without restrictions.

• E-commerce License: Designed for online retail businesses, facilitating digital sales platforms.

• Industrial License: Applicable for manufacturing and industrial operations within the free zone.

Sample Activity Table

To illustrate the organization of business activities, here’s a sample table:

License Type	Typical Activities
Professional	IT Services, Consulting, Media
Commercial	Import/Export, Trading, E-commerce
General Trading	Broad range of trading activities
E-commerce	Online Retail, Digital Services

Top IFZA Business Activities

The International Free Zone Authority (IFZA) offers a diverse range of business activities tailored to various industries. Below is a curated list of top IFZA business activities, along with practical use cases:

1. E-commerce & General Trading

• E-commerce: Ideal for launching online stores, including B2B and B2C platforms. IFZA supports e-commerce businesses with integrated payment gateways and logistics solutions.

• General Trading: Allows the import, export, and distribution of a wide array of goods, such as electronics, textiles, and consumer products. This license offers flexibility to trade in multiple commodities without the need for separate licenses for each category.

2. Consulting & Professional Services

• Consulting: Provides specialized advice in areas like management, IT, and finance. This activity is suitable for professionals offering expert guidance to businesses.

• Professional Services: Encompasses services such as accounting, legal, and marketing. IFZA offers licenses for various professional services, enabling businesses to operate legally and efficiently.

3. Logistics & Warehousing

• Logistics: Involves the planning, implementation, and control of the movement and storage of goods. IFZA’s infrastructure supports logistics companies in managing supply chains effectively.

• Warehousing: Provides storage solutions for goods. IFZA offers facilities that cater to the needs of businesses requiring warehousing services.

4. Media, Marketing & Advertising

• Media: Includes activities related to the production and distribution of content across various platforms. IFZA supports media businesses with the necessary infrastructure and licensing.

• Marketing & Advertising: Encompasses services aimed at promoting products and services. IFZA offers licenses for businesses in the marketing and advertising sector, facilitating their operations in the UAE market.

5. Real Estate Services

• Real Estate: Involves activities related to property management, sales, and leasing. IFZA provides licenses for real estate businesses, enabling them to operate within the UAE’s real estate sector.

6. Healthcare & Education

• Healthcare: Includes services such as medical clinics, wellness centers, and pharmacies. IFZA supports healthcare businesses with the necessary licensing and infrastructure.

• Education: Encompasses activities related to training centers, tutoring services, and educational consultancy. IFZA offers licenses for educational institutions, facilitating their establishment and operation.

Full IFZA Activity Taxonomy

When you browse the IFZA activity list, you’ll notice each activity has a unique Activity Code and a descriptive Activity Name. For example:

• Code: 111301

• Activity Name: Advanced Growing of Grains, Leguminous Crops & Oilseeds

These codes help IFZA and businesses identify and categorize activities efficiently. The Activity Name provides a clear description of what the activity entails, ensuring there’s no ambiguity about what your business will be doing.

Primary VS Ancillary Activities

• Primary Activity: This is the main business operation that defines your company’s core service or product. For instance, if your business focuses on providing IT consulting services, “IT Consulting” would be your primary activity.

• Ancillary Activities: These are supplementary services that support your primary activity. While they are not the main focus of your business, they are necessary for its operation. For example, if you also provide software development alongside IT consulting, “Software Development” would be an ancillary activity.

How to Choose the Right IFZA Activity for Your Business? 

Selecting the appropriate business activity is crucial when setting up your company with the International Free Zone Authority (IFZA). Here’s a step-by-step guide to help you navigate this process:

1. Define Your Core Operation (Product VS Service)

Begin by identifying the primary nature of your business: 

• Product-Based: Are you manufacturing, importing, or trading physical goods?

• Service-Based: Are you offering consultancy, IT services, or other professional services?

This distinction will guide you towards the appropriate license type:

• Commercial License: For businesses dealing with goods.

• Professional License: For service-oriented businesses.

2. Classify Your Activity: Commercial VS Professional

Understanding the classification of your activity is vital:

• Commercial Activities: Involve trading goods, such as electronics, apparel, or machinery.

• Professional Activities: Relate to providing services, like consulting, IT solutions, or marketing.

3. Consider Ancillary Activities You Need

While your primary activity defines your license, you might require additional activities to support your business operations. For instance:

• A consultancy firm might also need activities related to training services.
• A trading company might require logistics and warehousing activities.

4. Check Licensing Restrictions and Permitted Sub-Activities

Some activities come with specific restrictions or require additional approvals:

• Regulated Activities: These may need external approvals from government entities.

• Non-Regulated Activities: Generally, these don’t require external approvals but may have related property requirements.

5. Consult IFZA or a Setup Partner for Confirmation

Before finalizing your choice, it’s advisable to:

• Consult IFZA: Reach out directly to IFZA for guidance on your selected activities.

• Engage a Setup Partner: Collaborate with a business setup consultant familiar with IFZA’s processes to ensure all aspects are covered.

Common Pitfalls & Compliance Tips

Setting up a business in the UAE, particularly within IFZA, offers numerous advantages, including 100% foreign ownership and a streamlined setup process. However, entrepreneurs often encounter certain challenges that can impede their business operations. Being aware of these pitfalls and understanding how to navigate them can ensure a smoother journey.

Selecting an Activity That Doesn’t Align with Your Revenue Streams

The Issue:
Choosing a business activity that doesn’t encompass all your intended revenue streams can lead to compliance issues. For instance, if your business involves both consulting and trading, selecting only a consulting activity might limit your operations and expose you to legal risks.

The Solution:
Carefully review the IFZA activity list and select activities that accurately reflect your business operations. It’s advisable to consult with an IFZA setup partner to ensure that your chosen activities align with your business model and future plans.

Under-Declaring Trading Activities

The Issue:
Some entrepreneurs may under-declare their trading activities to minimize costs or simplify the licensing process. This practice can lead to legal complications and potential penalties.

The Solution:
Be transparent about all your business activities during the licensing process. If your operations involve trading, ensure that the appropriate trading activities are included in your license. Non-disclosure can result in fines or even the revocation of your license.

Misunderstanding Visa and Office Space Requirements

The Issue:
Misjudging the number of visas needed or the type of office space required for your business can lead to operational inefficiencies and compliance issues.

The Solution:
Determine the number of visas your business requires based on your staffing needs and the nature of your operations. Additionally, select an office space that meets IFZA’s requirements and supports your business activities. IFZA offers flexibility in office solutions, including virtual offices for certain business types.

Documents Required for Adding an Activity in IFZA

When expanding your business activities within IFZA, you’ll need to provide:

• Passport Copy: A clear copy of the passport of the shareholder or manager.
  
• Emirates ID: For UAE residents, a copy of the Emirates ID.
  
• Visa Copy: A copy of the UAE residence visa.
  
• No Objection Certificate (NOC): If applicable, especially when adding a new shareholder.
  
• Memorandum of Association (MOA): Required if there’s a change in shareholding structure.
  
• Board Resolution: A formal resolution approving the addition of the new activity.
  
• Proof of Address: Utility bill or tenancy contract for the business address.

Conclusion

Adding a business activity to your IFZA license involves careful planning, proper documentation, and awareness of potential costs. While navigating this process, having access to reliable financial insights and reporting can make running your business smoother and more efficient.

The Controller.ai specializes in online accounting and bookkeeping services for businesses across the UAE. Our services include bookkeeping, accounts reconciliation, payroll accounting, business valuation, due diligence, AML compliance, and financial reporting. The platform operates entirely online, giving business owners real-time access to their financial data, a dedicated accountant for guidance, and a secure dashboard to manage all accounting activities. By outsourcing accounting tasks to The Controller.ai, businesses save time, reduce stress, and focus on growth while ensuring compliance with local regulations.

FAQs

1. What is the IFZA activity list, and how many activities are there?

The IFZA activity list is a catalog of permitted business activities that a company can legally carry out under an IFZA license. IFZA offers over 800 activities spanning trade, services, manufacturing, consultancy, media, logistics, and more.

2. How do I know whether to pick a commercial or professional activity?

• Commercial activities are for trading goods, import/export, and product-based operations. An IFZA commercial license lets you buy, sell, import, and export items.
• Professional activities are service-oriented consulting, IT services, legal services, creative/media work, etc.

3. Can I run multiple activities on one IFZA license?

Yes, in many cases, you can include multiple activities under one IFZA license. IFZA even allows combining Commercial and Professional activities under a single license.

4. Is e-commerce allowed in IFZA?

Yes, IFZA supports e-commerce activities and offers relevant licenses.
Often, e-commerce is classified under a commercial/general trading license, and IFZA allows combining it with professional service activities if needed.