Little Guide About Freezone in UAE
Here you will learn what is Freezone business license and all the procedures of opening it
Freezone Company Formation in Dubai
The UAE has long been an attractive destination for entrepreneurs the world over. Offering low tax, a strategic location at the heart of the world’s largest and fastest emerging markets, and a government committed to nurturing and supporting business, it’s not hard to see why. But while these may be the factors that get the headlines, there’s another major reason why so many flock to the UAE’s shores to do business – free zones. So what is a free zone?
Also known as free trade zones – Free Zones are essentially economic areas where goods and services can be traded, usually at preferential tax and customs rates. They were originally rolled out to boost international business in the region by offering benefits such as 100% foreign company ownership. There are around 45 free zones across the UAE.
Also known as free trade zones – Free Zones are essentially economic areas where goods and services can be traded, usually at preferential tax and customs rates. They were originally rolled out to boost international business in the region by offering benefits such as 100% foreign company ownership. There are around 45 free zones across the UAE.
If you’re looking to set up a company in the UAE, there are plenty of reasons to choose a free zone:
- Easy setup: The set up process in most free zones is incredibly straightforward. The exact application process will depend on your business activity and chosen free zone but in many cases you are only required to provide some basic documentation such as passport copies and business paperwork. The whole process often takes just a week or two. Many free zones also offer flexi-desk and virtual packages allowing you to make use of the free zone address and facilities on an ad-hoc basis.
- Tax and duty: This is perhaps the most compelling reason to choose a free zone: the tax regime. Set up in a free zone and as well as benefiting from 0% corporate and personal tax, your business will also be exempt from VAT, currently at 5%. And that’s not all. Free zone businesses are exempt from import and export tax too and can trade with no currency restrictions.
- Foreign ownership: Another major plus to setting up in a free zone is foreign company ownership. Most entrepreneurs from overseas wanting to set up in the UAE mainland must work with a local partner to do business. This is not the case in the UAE’s free zones – set your business up here and you will retain 100% ownership.
- Trading within the UAE: Free zone businesses are not permitted to trade directly with the local market in the UAE, however this is easily overcome. One option is to work with a locally appointed distributor who can put your goods and services to market in return for a fee. Alternatively, it is possible to establish your free zone business and then open branch offices of your free zone company throughout the Emirates at a later date. These branch offices can be used to market your offering and undertake business within the UAE mainland.
- Support and assistance: Free zone authorities are on hand to offer support during set up and beyond. Most free zones offer assistance with applying for visas for both shareholders and any applicable dependants such as spouses or domestic staff. Many also assist with opening corporate bank accounts, advising on the best bank to suit your needs and even arranging meetings in-branch for you. In terms of ongoing business support, it is not unusual for free zones to offer business advice and networking services as well as access to startup hubs and growth initiatives to help new businesses get up and running.
If you’re sold on the benefits of doing business in a free zone, there’s more good news – set up takes just five simple steps:
- There are hundreds of business activities to choose from and it is possible to select multiple activities under one license.
- Your business activities will help to determine both the cost of your licence application and the free zone that best suits your needs.
- Deciding on a company name can be a challenge anywhere in the world, but here in the UAE – with its specific rules regarding naming conventions – this is a task you’ll want to tick off as early as possible.
- There are a few things to keep in mind here: offensive language is forbidden, company names cannot contain religious references, or references to any known organisations (anything from ‘FBI’ to ‘Mafia’).
- As there are a few other quirks to the UAE naming process, it’s best to work with a company formation specialist who can help you decide on a compliant name and check that it is available to register.
- Setting up in a UAE free zone usually only requires a few standard documents: completed application form, shareholder passport copies and the like. Some free zones may also require you to provide a business plan.
- Again, it is a good idea to work with a company formation specialist at this stage who can ensure all is in place before making your application to avoid any unnecessary delays.
- You’ll be notified as soon as your licence application is approved so you can collect your corporate documents and get to work.
- With this paperwork in hand you can open your corporate bank account and start trading. Your chosen free zone can usually help you with finding a suitable bank, as can a company formation specialist.
- Alternatively, you’re welcome to approach any financial institution on your own.
- The final step in the business setup process is immigration and visa processing. Free zone authorities or a company formation specialist can manage this process on your behalf – assisting with your application and liaising with relevant government departments.
- So, still wondering “what is a free zone?” That’s all there is to it. All that’s required is a few hours of your time and some basic documentation and you could be trading from a UAE free zone – and reaping all the benefits that come with it – in just a couple of weeks.
Now it’s time to apply for a mainland trade license with the DED. Several documents are required as part of a trade license application. These include a license application; memorandum of sponsor arrangements; and ownership percentage among all partners and shareholder visas, just to name a few.
Once you’ve obtained a business trading licence, it’s time to secure an office space. In the UAE mainland, serviced offices are usually owned and maintained by a third party and contain everything you need to move in immediately.
- There’s no limit with mainland visa applications for business owners in the UAE mainland. But the number of visas applied for should correspond with the amount of office space required. Usually, 100 sq. ft. of office or warehouse space per visa is the rule. There are circumstances where this may not be applicable. For example, if the business is a domestic cleaning company with 500+ employees working remotely, the office space needs would be decidedly smaller compared to a textiles or manufacturing company.
- As the owner of a UAE mainland company, you will also be able to sponsor dependents – such as family members and domestic staff (maids or drivers, for example) for their visas as well. Foreign entrepreneurs who establish business on the UAE mainland are also entitled to an investments visa which give them and their families the right to love and work in the UAE for up to three years.
- Setting up a mainland company in the UAE requires a deep understanding of the legal and company formation process. Working with a UAE-based consultant helpstake the stress out of setting up a company for overseas entrepreneurs.
- A business consultant can collaborate with you and understand your business goals. This will help you feel confident in starting a successful business in the UAE mainland
Freezone License
Are you interested to start your business in Freezone?
Fill the form to receive help from our experts!
Fill the form to receive help from our experts!
Lucent Legal Management Consultancies
Office number: 308
Floor: 3
Building: Oxford Tower
Business Bay, Dubai, UAE
Phone: +971 4 5298012
Whatsapp: ( Chat Now! )
Email: info@lucentlegal.ae
Office number: 308
Floor: 3
Building: Oxford Tower
Business Bay, Dubai, UAE
Phone: +971 4 5298012
Whatsapp: ( Chat Now! )
Email: info@lucentlegal.ae
We work from Monday to Friday, 9AM till 6PM.
