You probably know that company formation in Dubai freezone offers 100% tax-free incentives, but what makes Dubai freezones even more appealing is the seamless business setup procedure and the unrestricted repatriation of profit and capital to your home country.
Establishing a company in a Dubai freezone is like building a house on a strong foundation; it provides a solid and secure environment for building and growing a business.
As a business setup consulting company owned by Emiratis, with the dedication to guiding and supporting entrepreneurs and business owners in establishing companies in the UAE since 2007, we can say a common challenge newcomers always face when setting up a company in Dubai is choosing the right business license in a freezone that aligns with their business goals.
As a result, we’ve created this guide based on our experience and in-depth knowledge of company formation in Dubai. We also offer a free personalized online consultation via Zoom or any platform to entrepreneurs and business owners looking to setup a company in Dubai.
Setting Up a Company in Dubai Freezone: What is it?
Before we discuss how to choose the perfect freezone license and the steps for establishing a company in a Dubai free zone, let’s briefly overview what freezones are and why they are valuable.
These special economic zones were created to attract foreign investment to the UAE. Think of these freezones as ecosystems that ensure business operations in a dynamic and innovative environment that gives you 100% ownership of your business operation and management, all without tax obligations.
A question we always get is: Is a freezone company the same as a mainland company setup in Dubai? Can a free zone business operate anywhere in Dubai and the UAE? Well, let’s answer that by saying:
Setting up a company in Dubai freezone is like buying a condo – where you can access all the amenities, but you are restricted from operating within the designated area.
This means that freezone companies are generally not permitted to conduct business outside of their designated freezone area, but if need be, you may require additional permits to do so. Due to these restrictions, entrepreneurs should always carefully consider their business needs and long-term goals before deciding on their freezone company setup in Dubai.
Meanwhile, mainland companies can operate freely throughout Dubai and the entire UAE, offering the flexibility to engage with a broader market and undertake government contracts.
Freezone vs. Mainland Company Formation in Dubai
Another confusing aspect for those unfamiliar with Dubai’s business landscape is the difference between mainland and freezone companies. This is in terms of how they are administered.
To clarify this confusion, Dubai mainland companies are registered and regulated by the Dubai Department of Economy and Tourism (DET), while freezone companies are registered and regulated by their respective freezone authorities.
Choosing the Right Business License for Dubai Freezone Company Setup
As the first step leading up to any race is preparation, which includes the types of exercises you should do, establishing a business in Dubai also requires you to have a defined type of business activity you intend to operate, which entails the type of business license you will need.
The UAE has over 50 free zones, with Dubai alone accounting for 50 percent of these economic zones. Each specializes in a particular industry and offers a variety of activities.
Often, the question arises: what types of business licenses are available in these freezones?
Dubai freezones offer several types of business licenses, each catering to different business activities. This includes commercial licenses for trading activities, professional licenses for service-oriented businesses, and industrial licenses for manufacturing and production activities.
Therefore, to setup a company in Dubai, businesses must know the different freezones and their requirements. For example, a company looking to set up a technical service business in a Dubai freezone would need a professional business license in a freezone in Dubai, such as IFZA, that allows these types of business activities.
By choosing the appropriate business license, you ensure that your company can effectively operate and capitalize on the resources and opportunities available in your chosen freezone.
The Steps to Establish a Company in Dubai Freezone
The process of setting up a company in a freezone in Dubai is seamless and requires minimal paperwork and administrative requirements. Often, this can be accomplished online with the assistance of a reputable business setup consultant, such as CBS.
- The first step in registering a free zone company in Dubai is to identify your business objectives, activities, and ownership structure. Speaking of which, our business consulting experts can assist you in avoiding potentially costly mistakes.
Generally, opening a freezone company can take one of three forms (Freezone Establishment (FZE) if there is only one shareholder, Freezone Company (FZC) if there are multiple shareholders, and a Branch Office of an existing company).
- The next step is to come up with a unique and unregistered company name and apply for a trade name reservation certificate from the DET.
- In the following phase, after securing a trade name reservation and determining your business activities and company type, you will now have to compile all the required documents to begin the business license application process.
- Your next step will be to submit a business setup form received from your chosen freezone jurisdiction to request initial approval from that jurisdiction.
As part of this process, you might also be required to seek additional approvals from other relevant authorities, such as Dubai Municipality and the Roads and Transport Authority, etc, depending on your business activities.
- As a final step after receiving approval from all relevant authorities, you will need to apply for your business license, which requires the submission of all the necessary documents and payment of the license fee, which varies according to the free zone you choose, business activities you engage in and other add-ons.
What’s next after getting a freezone business license in Dubai?
In the opinion of many, obtaining a business license in Dubai is sufficient to make your business operational. Here’s the thing: obtaining a trade license in Dubai is only the beginning.
There are still a few steps to be taken before going operational per the rules and regulations. That is to secure visas for yourself and employees ( if you want to hire one), rent an office space (though freezone setups in Dubai do not require one), and open a business bank account to handle all your business financial dealings.
Get Started with Your Company Formation in Dubai With US
In most cases, starting a business in Dubai is an exciting and promising venture. The big question is not how to get started but who will guide you through the process to ensure that you do it correctly to derive the maximum benefit.
What sets us apart from other business consultancy firms in Dubai is our transparent approach and detailed process description. Our objective is not only to assist you with the process of obtaining a business license, but more importantly to assist you with everything concerning the process of doing business in Dubai and the UAE, from pre-formation through operations in this dynamic market.
If you would like more information on how to start a business in Dubai,
Our dedicated and passionate team of business advisors and PROs in Dubai are at your disposal for a free consultation to ensure you are guided every step of the way. You can book a free consultation with us now or check out our free business startup cost calculator below to get an idea of the total cost for your business formation in Dubai based on your needs.