Are you planning to start a new company in one of the free zones in the UAE? If yes, then you have arrived at the right place. UAE free zones offer unique opportunities for aspiring entrepreneurs who are looking for a business-friendly environment to establish their dream venture. Business setup in UAE free zone is one such golden opportunity where business owners can avail numerous business benefits including 100% foreign ownership, zero taxes, and full repatriation of profits and capital.
From world-class infrastructure and robust support services to strategic location to easy access to international markets, UAE free zones facilitate company formation through minimal bureaucracy and fast-tracked administrative procedures. This guide will look into the key steps to navigate the process of company formation UAE free zone and how these zones can be beneficial for a business venture.
Free Zones in the UAE
Free Zones, also referred to as Free Trade Zones, are special economic areas where products and services can be traded at privileged tax and customs rates. They offer various incentives to businesses such as tax exclusions, streamlined customs procedures, and modern infrastructure. However, oftentimes, people misunderstand free zone entities with offshore corporations, which is not the case.
Free Zone companies are basically onshore entities that can operate in Dubai if they meet the specific requirements. On the other hand, offshore companies are established specifically to conduct business outside of their registered jurisdiction or the primary owner’s location.
There are currently around 67 free zones in the UAE, with new ones being added every year. These free zones accommodate over 150,000 enterprises, with numbers growing every year.
Advantages of business setup in UAE free zone
Company formation UAE free zone offers countless advantages that can significantly benefit entrepreneurs and businesses. These include:-
Complete business ownership – Free Zone companies are allowed 100% foreign ownership, which is one of the most significant advantages of business setup in UAE free zone. Mainland entities usually require a local sponsor or partner, whereas foreign companies operating in the free zone can enjoy full ownership, which provides better control and flexibility in business management.
Profit repatriation – Free Zone enterprises can repatriate their profits outside the UAE. This means business owners can transfer 100% of their capital to their home country without any restrictions.
Reasonable corporate tax – According to the UAE law, companies with a taxable revenue of less than AED 375,000 do not have to undergo any corporate tax obligations. This stands out as a significant benefit for small and medium-sized companies.
Simplified procedures for import and export – The import and export procedures in free zones are simplified, relieving businesses from paying customs tariffs on goods crossing the country’s borders.
Strategic location – The geographic positioning of most free zones in the UAE is near seaports, airports, and national borders. This facilitates quicker delivery, lesser shipping costs, and improves supply chain efficiency.
Global connectivity – Businesses in the Free zones can have easy access to local and international trade through major seaports and airports of Dubai. The strategic location of the Emirates facilitates seamless connections between companies, distributors, and manufacturers in the MENA region and South Asia.
Thriving foreign businesses and entrepreneurs – Dubai is one of the most popular travel destinations drawing millions of tourists and investors every year. This multicultural environment enables business owners to connect with global business associations.
Range of business activities – UAE Free Zones accommodates diverse business activities. This enables entrepreneurs to explore various sectors such as trading, manufacturing, technology, media, healthcare, or consultancy.
Time-saving and simple – The license acquisition process in the free zone is quick and easy. Business owners can easily avail access to convenient administrative services which makes the setup process effectual and hassle-free.
Hence, by leveraging these advantages in the free zones, businesses can grow, expand, and enhance their operations in the dynamic economic environment of Dubai.
List of popular Free Zones in the UAE
We have curated a list of a few prominent free zones established across the UAE:
- Dubai Multi Commodities Center
- Dubai International Financial Center
- Dubai World Trade Center
- Dubai Airport Free Zone
- Dubai Healthcare City
- Jebel Ali Free Zone
- Dubai Media City
- Abu Dhabi Global Markets (ADGM)
- Abu Dhabi Airport Free Zone (ADAFZ)
- Twofour54
- Masdar City Free Zone
- Hamriyah Free Zone
- Sharjah Media City Free Zone
- Sharjah Publishing City Free Zone
- Ajman Free Zone
- Fujairah Free zone
- International Free Zone Authority (IFZA)
- Ras Al Khaimah Economic Zone (RAKEZ)
- RAK Maritime City
- Ras Al Khaimah Investment Authority (RAKIA)
- Umm Al Quwain Free Trade Zone (UAQFTZ)
Quick tips to select a free zone in the UAE
To ensure a successful business setup in UAE free zone, it is crucial to make the right choice of location that can significantly impact the success of your business idea and operations. So, here are some handy tips to select an appropriate free zone for your business venture –
- Different Free Zones in the UAE cater to different industries and sectors such as technology, media, healthcare, trading, etc. Therefore, it is crucial to identify the specific needs and nature of your business activities to make the right choice.
- Consider the location of the free zone and make sure it provides easy access to various transportation networks.
- Assess the infrastructure and facilities required for your business operations, such as office spaces, warehouses, and support services.
- Evaluate the costs involved in business setup in UAE free zone to ensure they fit within your budget. For example, setup costs, annual renewal fees, and other associated expenses.
- Consider the regulatory environment and special incentives or benefits offered by the free zone, such as tax exemptions, streamlined trade procedures, etc.
Documents required for company formation UAE free zone
The documents required for the business setup procedure vary for individuals and corporate entities.
For individuals:-
- Passport copy of each shareholder and manager
- UAE Entry Stamp / Visa Copy along with the Emirates ID for shareholders and managers
- Proof of Address and a recent passport-sized photograph for each shareholder and manager
For corporate shareholders:-
- Trade License for the existing company
- Certificate of Incorporation
- Board Resolution approving the formation of the new company
- Copies of Memorandum of Association (MOA) and Articles of Association (AOA)
Business setup in UAE free zone: Procedure
Setting up a business in a free zone involves several key steps and requirements:-
- Determine the legal structure of the business – Free Zone Limited Liability Company (FZ LLC), Free Zone Company (FZCO), Free Zone Establishment (FZE), or Branch of a Company.
- Choose a compliant name for the company that conforms with the naming conventions of the UAE.
- Apply for a suitable trade license – Professional, commercial, or industrial, depending on the business activities and the provisions of the free zone.
- Choose an office space based on the defined budget, staff size, and business needs.
- Register the company and obtain the trade license.
- Open a corporate bank account.
- Apply for visas and labor cards for the employees.
- After completing all these formalities, commence business operations.
Start your Free Zone Company with Shuraa
A business setup in UAE free zone comes with numerous benefits that satisfy the diverse needs of entrepreneurs and businesses. It serves as an incredible option for business expansion offering advantages like 100% foreign ownership, zero taxes, and full capital repatriation. Moreover, the strategic location of the free zones ensures seamless access to global markets.
However, to achieve significant growth, it is crucial to make the right choice of free zone. Shuraa Business Setup offers expert guidance to business owners in selecting the right free zone in the UAE and starting a business resourcefully. Their experienced consultants voluntarily assist in maximizing the potential advantages of company formation and achieving all the defined growth objectives.
Make the right call for your business idea by contacting Shuraa at www.shuraa.com