In the heart of the Middle East, the United Arab Emirates stands as a hub for global entrepreneurs, offering a unique business ecosystem that combines innovation, tax benefits, and strategic location.
At the forefront of this attractive business landscape are the UAE freezones – special economic zones created to foster economic growth and attract foreign investors and startups alike.
Whether you’re a startup entrepreneur or an established corporation seeking global expansion, understanding the procedures of business setup in Dubai or any freezone in UAE could be your key to unlocking unprecedented growth and success.
In this article, we’ll give you a step-by-step guide to freezone business setup in UAE.
Benefits of Business Setup in UAE Freezones
The UAE’s freezones were designed to attract foreign investment and foster economic growth. Company formation in UAE freezones offers attractive incentives that make them irresistible to businesses worldwide:
Here are some of the reasons to setup a freezone company in UAE:
- 100% foreign ownership
- Zero corporate and personal income taxes.
- Full repatriation of profits and capital to home country.
- No currency restrictions
- Simplified and remote company formation procedure
- State-of-the-art infrastructure and facilities
- Strategic locations with proximity to airports and seaports
- Networking opportunities within industry clusters
Types of Legal Structures in UAE Freezones
UAE freezones offer various business structures to cater to different business needs with each structure having its own set of requirements and benefits. Therefore, when setting up a freezone company in UAE, you’ll need to choose a legal structure that best fits your business needs:
- Free Zone Establishment (FZE): A limited liability company with a single shareholder.
- Free Zone Company (FZC): Similar to FZE but allows multiple shareholders.
- Branch of a Foreign Company: An extension of an existing foreign company.
- FreeZone Limited Liability Company (FZ-LLC): A more flexible structure allowing multiple shareholders and activities.
Types of Business Licenses in UAE Freezones
Each freezone authority in UAE is designed to offer specific types of business licenses to cater to particular business sectors. The main types of trade licenses in UAE freezones include:
- Trading License: For import, export, selling, buying, and distribution of goods.
- Service License: For providing professional services.
- Industrial License: For manufacturing and processing activities.
- Logistics License: For transportation and logistics services.
- E-commerce License: For online retail and digital businesses.
- Media License: For media production and related services.
- Educational License: For educational institutions and training centers.
List of Some Freezones Authorities in UAE and Their Locations
- Dubai Multi Commodities Centre (DMCC) – Dubai
- Jebel Ali Free Zone (JAFZA) – Dubai
- Dubai International Financial Centre (DIFC) – Dubai
- Dubai Airport Free Zone (DAFZA) – Dubai
- Dubai Silicon Oasis (DSO) – Dubai
- International Freezone Authority (IFZA) – Dubai
- Dubai Media City – Dubai
- Dubai Internet City – Dubai
- Dubai Healthcare City – Dubai
- Meydan Freezone – Dubai
- Dubai Production City – Dubai
- Dubai World Trade Centre Free Zone (DWTC) – Dubai
- Abu Dhabi Global Market (ADGM) – Abu Dhabi
- Khalifa Industrial Zone Abu Dhabi (KIZAD) – Abu Dhabi
- Masdar City Free Zone – Abu Dhabi
- Sharjah Airport International Free Zone (SAIF-ZONE) – Sharjah
- Hamriyah Free Zone – Sharjah
- Ras Al Khaimah Economic Zone (RAKEZ) – Ras Al Khaimah
- Ajman Free Zone – Ajman
- Fujairah Free Zone – Fujairah
- Umm Al Quwain Free Trade Zone – Umm Al Quwain
Steps to Setup a Freezone Company in UAE
- Choose your business activity and appropriate license type.
- Select a suitable freezone based on your business needs and budget.
- Decide on your company name, ensuring it complies with UAE naming conventions.
- Prepare and submit required documents (e.g., passport copies, and business plan).
- Apply for initial approval from the freezone authority.
- Lease office space or virtual office as per freezone requirements.
- Obtain your business license and registration certificate.
- Open a corporate bank account.
- Apply for visas for yourself and your employees.
What is the Cost of Freezone Company Formation in UAE?
The cost of setting up a freezone company in UAE varies depending on factors, which typically include:
- License fee
- Chosen Freezone Authority
- Chosen legal structure
- Registration fee
- Office rent (smart desk, virtual office, or physical space)
- Visa costs
Additional costs may include:
- Bank account opening fees
- Legal and consultancy fees
It’s always advisable to seek the assistance of a reputable business setup consultant for the most up-to-date information.
Can a Freezone Company Register for Corporate Tax in UAE?
Yes, freezone companies can register for corporate tax in the UAE. As of June 1, 2023, the UAE introduced a federal corporate tax regime. While freezone companies may be eligible for certain tax incentives, they are generally required to register and comply with corporate tax regulations. However, qualifying freezone companies that meet specific criteria may be eligible for a 0% corporate tax rate on their qualifying income.
Can a Freezone Company Do Business in UAE Mainland?
Freezone companies are primarily setup to conduct business outside the UAE or within the freezone jurisdiction. However, they can engage in business activities on the UAE mainland under certain conditions:
- Appointing a local distributor or agent
- Opening a branch office on the mainland
- Obtaining additional licenses for specific mainland activities
Each option has its own set of regulations and requirements, and it’s advisable to seek professional guidance to ensure compliance.
Our expert business advisors at Corporate Business Services (CBS) in Dubai can assist you with setting up your business in the UAE.
How Can CBS Assist You?
Navigating the complexities of setting up a business in the UAE can be challenging. This is where Corporate Business Services (CBS) comes in. As a leading business consulting firm in the UAE, CBS specializes in providing comprehensive business setup services.
Our team of experts can guide you through every step of the process, from choosing the right freezone and license type to handling all the necessary paperwork and legal requirements. You can book a free personalized consultation with us now.
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