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A Free zone is a geographical region or jurisdiction which is allowed to conduct a predefined trading activity or set of activities in the UAE. Business set up in Dubai Freezone requires a license and the Freezone licenses in Dubai and UAE are issued based on the particular business activity of the company.
The Dubai Freezone Licenses are issued based on the particular business activity of the company. Certain new free zone regions are under construction and therefore the total number of the free zone would rise in the coming years.
Free Zone Authority (FZA) is the governing body in charge of the activities related to a Free Zone company like license issuance and operation. The Commercial laws governing the UAE mainland companies are not applicable to the Free zone companies. One of the greatest benefits of business set up in Dubai Freezone is that foreign investors can enjoy 100% ownership. Apart from complete ownership benefits, monetary benefits like complete tax exemptions, 100% repatriation benefits, absence of foreign exchange restrictions are the added benefits of Dubai freezone company formation.
When your company is approved for the Freezone business, it is given any of the Dubai Freezone licenses such as Trade License, Industrial License, Service License, or National Industrial License by the Free Zone Authority. These freezone licenses in Dubai/UAE can be renewed annually as long as the lease agreement is in force.
You are supposed to select your desired free zone jurisdiction based on the type of business. Your business activity should match the category of the preferred Free zone. Even though offshore companies share some of the benefits of Freezone companies in Dubai, they are not identical.
The investors and entrepreneurs can rely on 3 different business entities to form a company in any of the Dubai Free zone jurisdiction. And those entities are:
Free Zone Company (FZC) – A Free Zone company is a business entity that has 2 or more shareholders.
Free Zone Establishment (FZE) – A Free Zone Establishment is a business entity that has a single shareholder.
Branch Office – the investors can also form a business entity that serves as a branch office of a parent-concern. The parent-concern can be in the UAE or an overseas company.
Select the business entity of your preference – Understand the business category of the Free Zone jurisdiction and choose your desired business or legal entity.
Select an appropriate and relevant trade name – Select an appropriate trade name for your business concern. Contact the Free Zone Authority of the concerned Free Zone jurisdiction and verify the trade name. You are not allowed to select an already listed trade name. Register the trade name via the concerned Free Zone Authority.
License application – Based on your business activity, determine the category of license that your business needs. The documentation required for license application varies with the type of license. For example, documentation required for acquiring a Professional License is different from that of an Industrial License. Apply for the relevant license.
Get sufficient office space – the number of staff and the category of business determines the area of the office space. There are multiple options like flex spaces, office space for lease, etc for startup investors.
Initial Approval – Now you are in a position to apply for the Initial Approval. Get the approvals from all the concerned departments and agencies.
Registration – After you get all relevant approvals, you may undertake the registration of your business on the official website of the concerned Free Zone Authority.
Acquire the business license – you may get the business license within a couple of weeks or a month provided the official formalities are accomplished on time.
Free zone companies are ideal for foreign investors who seek 100% foreign ownership.
Free zone regions have tax exemption benefits. They are devoid of Corporate tax, Income tax and personal tax.
Free zone jurisdictions do not have foreign exchange restrictions.
Hassle-free employee recruitment formalities
Investors can enjoy complete repatriation benefits in terms of profit and capital.
Free zone entities are devoid of export and import charges.
Enjoy logistic advantage
Ideal for start-up ventures, small and medium business establishments. Free zones regions are equipped with full-fledged offices and work-spaces.
Well-equipped and ample communication facilities
There are around 40 Free zone jurisdictions that are currently operating in the UAE. Around 28 Free zones operate in the Emirate of Dubai alone. And yes, Dubai is the most preferred Emirate for Free Zone company formation in the UAE. The major Free zone jurisdictions are listed below.
Dubai South Free zone – the Dubai South Free zone is located close to the Al Maktoum Airport and Jebel Ali port and hence it has both strategic and logistic importance. The Dubai South is the proposed venue for the international event – Dubai World Expo 2020. The Free zone serves as an aviation, SME and logistics hub.
Jebel Ali Free Zone (JAFZA) – JAFZA offers licenses for a variety of business activities like general trading, trading of machinery, equipment, electrical and electronic items, construction and building materials, jewellery, logistics, aviation, manufacturing etc.
Dubai Silicon Oasis – DSO, the internationally known Free zone serves as a technology hub that caters to the requirements of telecom and the IT sector.
Dubai Healthcare City – caters to the entire needs of the Healthcare sector like medical research facilities, clinical and non-clinical services, medical equipment etc.