free zone business setup dubai
The UAE is a popular place for entrepreneurs worldwide due to its strong economy and advancements that benefit both locals and foreigners. Dubai stands out as a well-developed city offering many advantages, such as excellent infrastructure, low taxes, strong global connections, and a booming economy. These factors make it an ideal location for running a business.
What constitutes a free zone company?
Free zones, often referred to as free trade zones, are designated economic areas where the exchange of goods and services occurs, typically under advantageous tax and customs conditions.
A prevalent misunderstanding is the equivalence of free zones and offshore companies. In reality, this is not accurate. Free zone companies are onshore entities authorized to conduct business in Dubai, provided they adhere to specific regulations. Conversely, offshore companies are established primarily to operate outside their registered jurisdiction or the location of their main ownership.
The United Arab Emirates is home to approximately 67 free zones, with new ones being established annually. These zones host over 150,000 companies, and this figure continues to grow over time.
The estimated cost for establishing a business in Dubai is around AED 11,900. However, this amount may vary based on the chosen free zone and the specific visa requirements.
It is important to highlight that free zone companies are now allowed to establish branch offices on the mainland. To do so, the investor must register the branch under the same trade name with the Department of Economic Development (DED) and the Ministry of Economy. Unlike previous regulations, the branch can be wholly owned by the free zone entity without the necessity of a local partner.
Most free zones primarily focus on general trade, services, and industrial sectors. Nevertheless, certain free zones in the UAE are tailored to specific industries or sectors. Some of these specialized jurisdictions include:
Establishing a Business in UAE Free Zones
To establish a business within a UAE Free Zone, one must select a specific Free Zone, register the business entity, obtain a Trade license and visa, and open a business bank account. The UAE Free Zones offer numerous advantages for both residents and non-residents, including 100% foreign ownership and tax exemptions for businesses registered in these zones.
The UAE government has established Free Zones across various emirates, each tailored to specific business activities. There are more than 67 Free Zones throughout the UAE, which have successfully attracted foreign direct investment, resulting in the establishment of approximately 200,000 companies.
While these Free Zones vary in their focus, setup costs, and documentation requirements, the fundamental prerequisites remain consistent across the board.
Pak Tours Corporate offers assistance in business setup within the following Free Zone areas:
- Dubai Free Zone
- Abu Dhabi Free Zone
- Sharjah Free Zone
- Ajman Free Zone
- Jebel Ali Free Zone (JAFZA)
- Ras Al Khaimah Free Zone
- Umm Al Quwain Free Zone
- Fujairah Free Zone
The Free Zones in the UAE present appealing opportunities for investors seeking complete ownership of their enterprises. The primary objective of these zones is to foster and enhance business development in various sectors.
Free Zones facilitate 100% ownership, exemption from taxes, and customs privileges for business owners, making them the preferred option for establishing a business.
Reasons to Choose Free Zones Over Mainland for Business Setup:
The following points highlight the advantages of selecting Free Zones for business establishment:
- Permits 100% foreign ownership, regardless of the investor’s nationality
- Exemption from UAE corporate income tax
- Streamlined and expedited business setup process
- Suitable environment for startups and small enterprises
- Flexibility for 24/7 operations
- Full repatriation of capital and profits
- Complete exemption from corporate, personal, and income taxes
- Simplified procedures for startup and licensing
- Provision of a UAE residence visa valid for three years
- Ability to hire expatriates without limitations
Steps to Setup a Business Setup in a Free Zone
Company Formation in the UAE free zone is easier, as the authorities request minimum documents and lesser duration. Following are the steps involved in setting up a business in the free zone:
Determine the type of legal entity
It is essential to evaluate the appropriate legal entity for your business. Within a Free Zone, you have the option to select from two types of Free Zone Entities:
– Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.)
– Free Zone Establishment (FZE)
Your choice of company category in the free zone should be influenced by the number of shareholders and whether they are individuals or corporate entities. Not all free zones require the registration of both entity types. It is advisable to verify the specific business type with the relevant free zone authorities prior to registration.
Select a name for the business or entity
In conjunction with determining the type of business or entity, it is crucial to select an appropriate name for the entity. It is also necessary to consult with the relevant free zone authority or the Department of Economic Development to ensure that the chosen name is approved and not already in use.
Apply for a Business Trade License
The type of business license you apply for will depend on the primary activities of your business.
Find an office space
You could either buy an office space or take it on lease in free zones. Office requirements completely depend on the number of employees and the type of business activity.
Obtain pre-approvals, register your business, and get the license
Businesses established in free zones are controlled by the laws of the corresponding free zone. For necessary approvals, you need to collect relevant documents. The document differs on the type of business activity, type of company, and the free zone authority requirements.
Here is a general procedure you need to follow for approvals:
- Initial approval
- Registration
- Licensing and visa process
Document Required to Start a Business in Free Zone
To set up a new company in any free zone region in the UAE, you need to produce certain documents and get approval from the GCC or the Arab embassy.
- Form to apply for a license
- Business card
- Capital for business plan
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Passport copies
- Reference from Banks and partners’ licenses of existing business (if required)
As an investor, you should follow this procedure when starting a business in a Free Zone in the UAE. This process has been made easier by the government, and would not take more than 4 weeks to complete.
Company Formation in UAE Free Zones
Pak Tours is a leading Business Consultancy Firm that professionally handles the procedure for company formation in the free zone in the UAE. The team has experienced consultants who assist the clients in collecting the required documents as per the request from the free zone authority and also help them get approval from the embassy.
FAQs
What types of business can I conduct in a free zone?
You can conduct business in finance, education, retail, hospitality, media, etc. Check with the free zone authority for businesses allowed in their regions.
What process should I follow to set up a business in the free zone?
Free Zones demand minimum paperwork and time to process the requests. These are the steps to set up a business in a free zone:
- Decide the type of legal entity
- Choose a name for the entity
- Apply for a trade license
- Find an office space
- Obtain pre-approvals, register the business and get the license
3. How do I choose a trading name? Are there any rules?
You should choose a trading name when choosing the entity type for your business. You could check with the free zone authority or the Department of Economic Development (DED) if it has already been taken.
4. What are the top 3 low-cost free zones in UAE?
- International Freezone Authority
- Ajman Media City Free Zone
- Ras Al Khaimah Economic Freezone (RAKEZ)
are the top 3 low-cost free zones to start a business.
how to start business in dubai
First, choose what you’ll do and the type of license that best fits your venture. Next, find the free zone with the most relevant benefits for your business. Decide on how you’ll structure your company (ownership and management). Then, pick a unique and memorable name, and gather all the necessary documents. Once everything’s in order, get the free zone’s initial approval. After that, it’s time to make it official by signing the incorporation documents. Choose a location within the free zone to set up your shop or office. Finally, obtain your business license – this official stamp lets you operate your business legally within the free zone. Remember, this is a simplified process, and consulting a professional for specific advice is always recommended.
What is the minimum investment to start a business in the UAE?
The UAE’s thriving economy offers exciting opportunities for entrepreneurs. Several industries, like tourism and healthcare, are experiencing significant growth. To join the action, setting up a Free Zone company is a breeze, with a minimum investment of only AED 5,500.
Who is the best business setup consultant in the Pakistan for Dubau?
Pak Tours a consistent position as one of the leading business consulting firms in the UAE, consistently earning top rankings.
