Business Setup In Freezone
Business Setup in UAE FreeZones
Many foreign investors avoid starting a business in the UAE mainland because they need a local Emirati partner who must own 51% of the company shares. This rule makes some entrepreneurs uncomfortable. That’s why setting up a company in a UAE Free Zone has become a popular choice. Free zones allow 100% foreign ownership, giving you full control over your business without needing a local partner.
What is a Free zone?
A Free Zone is a special business area in the UAE that offers 100% foreign ownership, zero personal and corporate tax, and customs duty exemptions. These zones are designed to make it easy for international investors to start and grow their businesses.
- National borders,
- International airports
- Major seaports for maximizing the trading advantages.
A Free Zone in the UAE is a designated business area that offers tax-free benefits and low trade barriers to attract foreign investors. These zones are ideal for businesses looking for 100% foreign ownership, customs-free operations, and easy international trade.
- The convenience of single-window administration,
- No bureaucratic red tape,
- And 100% ownership.
There are about 44 free zones in the UAE. These attract foreign direct investment in the form of 200,000 companies contributing to the GDP growth. The free zones vary in their focus, setup costs and paperwork needed, but the basic requirements are the same.
- List of Free Zones and Authorities for Business Setup in UAE Freezone
Most of the UAE Emirates have free zones for:
- Boosting the economy of the emirate,
- Promoting foreign direct investment (FDI),
Free Zone Authority is the government body responsible for registration and issuing business licenses to foreign ex-pats who want to start a company in the UAE free zone.
The list of free zones established across the UAE are mentioned below:
- Dubai Free Zone
- Dubai Biotechnology & Research Park (DuBiotech)
- Dubai Silicon Oasis (DSO)
- Dubai International Financial Centre (DIFC)
- Dubai World Trade Center (DWTC)
- Dubai Airport Free Zone (DAFZA)
- Dubai Logistics City
- Jebel Ali Free Zone (JAFZA)
- Dubai Car and Automotive City Free Zone (DUCAMZ)
- Dubai Studio City
- Dubai Media City (DMC)
- Dubai Multi Commodities Centre or Jumeirah Lakes Towers Free Zone
- Expo City Dubai
- Dubai South Free Zone
- Meydan Freezone
- Dubai Design District
- Dubai Techno Park
- Dubai Academic City
- Dubai Knowledge Village
- Dubai Gold and Diamond Park
- Dubai International Academic City
- Dubai Healthcare City (DHCC)
- Dubai Outsource Zone
- International Humanitarian City
- Dubai Technology and Media Free Zone
- Dubai Flower Centre
- International Media Production Zone
- Economic Zones World
- Dubai Internet City (DIC)
- Dubai Industrial City (DIC)
- Abu Dhabi
- Twofour54
- Higher Corporation for Specialized Economic Zones (ZonesCorp)
- Industrial City of Abu Dhabi
- Abu Dhabi Ports Company (ADPC) – Khalifa Port and Industrial Zone (KPIZ)
- Abu Dhabi Global Markets (ADGM)
- Abu Dhabi Airport Free Zone (ADAFZ)
- Khalifa Industrial Zone Abu Dhabi (KIZAD)
- Masdar City Free Zone
- Sharjah
- Sharjah Media City Free Zone
- U.S.A. Regional Trade Center (USARTC) Free Zone
- Sharjah Airport International Free (SAIF) Zone
- Sharjah Publishing City Free Zone
- Hamriyah Free Zone
- Ajman
- Ajman Free Zone
- Fujairah
- Fujairah Free zone
- International Free Zone Authority (IFZA)
- Ras Al Khaimah
- Ras Al Khaimah Investment Authority (RAKIA)
- Ras Al Khaimah Economic Zone (RAKEZ)
- RAK Maritime City
- Ras Al Khaimah Media Free Zone
- Umm Al Quwain
- Umm Al Quwain Free Trade Zone (UAQFTZ)
- Benefits of Business Setup in UAE Free Zones -
The list of free zones established across the UAE are mentioned below:
- 100% free transfer of funds and no foreign exchange controls.
- Liberal government policies and legal framework.
- Freehold offices are available for sale or lease.
- Inexpensive workforce and easy recruitment procedures.
- Exemption from all import and export duties.
- Low Freight charges.
- Easy start-up and licensing procedures.
- Unique industry clustering and purpose-built infrastructure.
- Flexibility to operate 24/7.
- 100% foreign ownership.
- 3-year UAE residence visa.
- Abundant and inexpensive energy.
- The Timely and Streamlined Immigration Process.
- No restrictions on hiring expatriates.
- Efficient communication procedures and single-window administration.
- 100% repatriation of capital and profits.
- Sponsorship and visas for an affordable skilled workforce.
- Ready-made offices, factories, and warehouses.
- 100% exemption from corporate, personal and income taxes.
Things to Keep in Mind about a Freezone Company in UAE
Keep the following in mind during the UAE free zone company setup:
- Value Added Tax is not applicable for business outside the country
- Cannot easily work with Government agencies directly
- The business type could be B2B anywhere in UAE and B2C in the free zone and internationally.
- The corporate tax that was starting from June 2023 is not applicable to Freezone companies
- Physical presence is not required in some free zones during the company formation, and it’s only required during the visa process
- Free Zone Establishment (FZE), with a single shareholder
- Branch of a foreign or local company
- Free Zone Company (FZC), with 2 to 5 shareholders
Types of Entities Allowed for Free Zone Company Formation UAE
There are mainly 3 types of entities you can set up in the UAE free zones. These are:
- Free Zone Establishment (FZE), with a single shareholder
- Free Zone Company (FZC), with 2 to 5 shareholders
- Branch of a foreign or local company
Types of Licenses for the UAE Free Zones -
Business setup in UAE free zones is incomplete without procuring a business license. The following types of business licenses you can get:
- General Trading License
Allows investors to trade in all kinds of products.
- Trading/ Commercial License
Grants a time-limited authorization to perform industrial, commercial, or consulting activities.
- Service License
Allows law firms, accounting firms, and business consultancy firms to operate.
- Industrial License
Permits importing raw materials, manufacturing goods, and exporting finished products across global boundaries.
- Warehousing License
Investors can avail of this license to avail warehousing facilities on lease for distribution, packaging, and storage of goods.
- Manufacturing License
Permits applicants to manufacture products.
What is the Process for Business Setup in UAE Free zones?
Business setup in UAE free zones is not subject to the commercial company’s law. Free Zones in the UAE are outside the UAE’s jurisdiction. And have rules and regulations set by concerned free zone authorities.
These free zones offer an excellent opportunity for investors from all around the world and provide a liberal working environment and easy company setup procedures. The procedure is plain and simple.
Determine the type of legal entity
Determine which type of entity you want to set up in any of the free zones. The capital requirement for such an entity depends upon the particular free zone where you will build your company.
For example: There is no minimum capital requirement for setting up a business in twofour54, whereas in Dubai Airport Free Zone (DAFZ) you are supposed to have a minimum share capital requirement of D 150,000.
Choose a Trade Name
After deciding on the type of legal entity, choose a trade name for your company. Note that you ought to cross-check with the respective free zone authority about the permitted trade names. And whether the intended name has already been registered.
Apply for a Business License
After choosing the trade name and registering it in the Free Zone authority’s portal, you have to apply for the business license. The list of the different business licenses issued by the free zone authorities has been stated above.
The type of business license depends on the primary activity of your business. You need to submit the supporting documents while applying for the license.
Choose an Office Space
Free zone authorities provide flex-desk office service to support start-ups. You can either buy or lease office spaces in free zones. Office requirements depend on the number of employees and your company’s business activity.
Get Pre-Approval, register your business, and get the license
Get the initial approval and the business-related approvals from the specific authorities. Register your business at the portal and get your license. It will not take more than 2-4 weeks to get done with this process. Once you get the license, you are good to start your business.
UAE Freezone Company Setup Requirements -
To start the UAE Freezone company setup process, you must gather the following documents:
- Copy of business plan
- Visa with UAE entry stamp
- Duly filled application license form
- Business card of the contact person
- Passport copies of all the shareholders
- Address proofs (dated within 3 months)
- Passport copies of the partners and business managers
- Notarised and attested Memorandum of Association (MOA) and Articles of Association (AOA)
- Original bank reference letters and license of the partner’s existing company, if applicable
Documents for Consultancy License
A copy of the degree or diploma certificate mentioning the desired activities, or the experience certificate [any of these documents is a must]
Documents for Industrial License
- Existing company profile
- Business feasibility study
- Duly filled form for the investor’s project profile
Documents for Branch of Companies
- Attested copy of the registration certificate, incorporation certificate, and the Memorandum and Articles of Association (MAA).
- Original Board Resolution that guarantees the financial commitment of the branch.
- Original Power of Attorney of a legal representative and their passport copy.
- Last 3 months’ bank statements of the parent company.
Types of Activities for Company Formation in UAE Freezone -
- Marketing
- Music production and recording
- Animation
- Advertising
- Performing arts and theatre
- Corporate Print Material
- Corporate film production
- Digital content creation
- Software development
- Event management
- Illustration
- NGO
- Television channels
- Gaming development
- Graphic Designing
- Branding agency
- Photography
- Content Creation
- Public relations
- Publishing company
- Web Designing
- Mobile Media
- Film making
End Note
Setting up your business in a UAE-free zone is rewarding.
- With tax exemptions,
- Lower establishment overheads,
- Business-friendly government policies,
- And hassle-free administration for businesses.
Connect with IRHA Businessmen Services for expert guidance. Schedule a consultation call with us, and we’ll address all your questions and help you start your business with confidence.