Tuesday, May 30, 2023

Why Choose a Dubai Free Zone to Register Your Company?

Must read

Dubai is one of the Middle East’s most popular and investor-friendly destinations. Its proximity and easy access to Asia and other nations make it an excellent center for investment.

The UAE has many free zones, most of which are in Dubai. The high quality of life and excellent infrastructure of Dubai’s free zones attract investors to this futuristic city. Dubai Free Zones provide a regulated and stable business environment in which a wide range of business activities can be permitted. These free zones stimulate the economy, facilitate foreign investment and accelerate the expansion of investors and entrepreneurs, thus paving the way for establishing companies in the free zones of Dubai.

Dubai Free Zones are business zones where companies operating there are exempt from taxes such as VAT, income tax, corporate tax, and customs. The objective of these zones is to motivate foreign investment and improve the city’s economic activity.

Benefits of Setting Up a Business in the Dubai Free Zone

Each zone is regulated by an independent but ajman free zone authority responsible for maintaining licenses to operate the free zone and assisting businesses to set up there. Here are some of the benefits of a free zone:

  • Repatriation of capital and profits
  • Exclusion of corporation tax and personal income tax
  • Easier immigration and labor recruitment process
  • Wide range of licensable activities
  • Unlimited and inexpensive energy
  • High logistics efficiency
  • 100% ownership for investors
  • 100% personal and corporate income tax exemption
  • Exclusion of all import and export duties
  • Convenient warehouses
  • Option for a company created by a person
  • Absolute confidentiality of operations
  • Flexibility to engage in international business
  • Low renewal fees
  • Ability to own properties and participate in many activities in Dubai.
  • The possibility of liquidating at any time

List of Free Zones in Dubai

There are over 20 free zones in operation in Dubai, including the following:

  • Dubai International Free Zone Authority (IFZA)
  • Dubai Airport Free Zone
  • Dubai Commerce City
  • Dubai Design District
  • Dubai Health City
  • Dubai International Academic City
  • Dubai Internet City
  • Dubai International Financial Center
  • Dubai Logistics City
  • Dubai Knowledge Park
  • Dubai Sea City
  • Dubai Gold and Diamond Park
  • Dubai Media City
  • Dubai Multi-Commodity Center (DMCC)
  • Dubai Production City
  • Dubai Science Park
  • Dubai Studio City
  • Dubai Textile City
  • Dubai World Central (South Dubai)
  • Dubai Silicon Oasis
  • Dubai World Trade Center
  • International Humanitarian City
  • Jebel Ali Free Zone

Types of Licenses Available for Setting Up a Business in the Dubai Free Zone

It is essential to know the different incentives that Dubai Free Zones offer to license holders. For example, the international free zone authority dubai allows the combination of up to seven activities belonging to a single license or different types of licenses.

The Free Zone authorities grant the following licenses for setting up a company in the Dubai Free Zone:

1) Industrial License: The industrial license is acquired for manufacturing units and production activities.

2) Trade License: This license is issued for import, export, distribution, and storage activities, and it can also be applied for the sale of products in the UAE market through a local distributor.

3) License Service: The applicable services are listed in this license, and the license holder is authorized to perform these services in the Dubai Free Zone and all of the UAE.

4) General Business Activities: This license allows dealing with the trade of all types of goods, with an exemption on some prohibited products which require special authorization with this license.

Types of Business Entities Allowed in Dubai Free Zone

Free zones in the UAE are the most important base of the country’s growing economy. Three types of the firm can be established in a free zone:

1) Establishment of a Free Zone (FZE)

It is a limited liability company with a single stakeholder.

2) Free Zone Limited Liability Company (Free Zone LLC)

It is a limited liability company with a maximum of five shareholders.

3) Branch

A company incorporated in the United Arab Emirates or a foreign country may have a branch in one of Dubai’s free zones.

It is relatively easy to set up a business in a free zone, as the free zone authorities only require the bare minimum of paperwork and time.

How to Open a Company in the Dubai Free Zone?

Setting up a business in the Dubai Free Zone can be tricky. It is therefore strongly recommended that you seek professional advice and guidance on the various incorporation and registration requirements.

Dubai offers attractive company formation consultants in uae options for investors to establish their business anywhere, depending on business type, region, budget, ownership preferences, and other factors. There are particular formalities and procedures to be finalized to set up a business in Dubai Free Zones. And these formalities require careful planning, an understanding of local culture and government standards, and detailed decision-making throughout the various phases of starting a business. Don’t be discouraged by all this; your Damali on expert is always there to help you.

Procedure for Setting Up a Business in the Dubai Free Zone

Here are the steps required to set up a business in a free zone.

1) Specify the business activity of the legal entity.

Determine the business activity you want to engage in, as the type of license you will apply for will depend on the nature of the business activity. Most Dubai Free Zones allow multiple business activities and offer plenty of options to explore.

2) Find an eligible free zone.

Once you have chosen a business activity, the next step is to determine the best free zone for you. Do some research before choosing a particular area.

3) Select a business name for the activity.

Before choosing a name, you must confirm that your business name can be registered on the Dubai Free Zone Authority portal. There are specific standards the name must adhere to, including avoiding any disrespectful language or references to religious or political institutions.

4) Gather the necessary documents

After determining the business activity and registering the business name on the portal, the next important step is to apply for a license. The type of license you will request depends on the business activity. To apply for the license, you must complete the application form and gather the necessary documents as indicated in the form. You can also apply for a visa during this procedure.

5) Open a business bank account.

Opening a bank account is a simple process. But to do this, you need to gather the documents and your business license and submit them to the chosen financial institution.

Documents Required for Company Formation in Dubai Free Zone

For an operating license:

  • Color copy of the shareholder’s passport and visa, if applicable.
  • Completed application form and letter of intent
  • Commercial strategy
  • Board Resolution
  • Memorandum and articles of association

To open a bank account:

  • business account opening form
  • resolution of the board of directors sanctioning the opening of the account, and the signatories of the account
  • duplicate of your company’s certificate of incorporation
  • duplicate of your share certiļ¬cate
  • copy of the memorandum and articles of association of the company
  • copies of the passports of all the partners of the company

Dubai Free Zone License Cost

Dubai Free Zones offer exclusive packages to help business owners. The cost of setting up a business in Dubai depends on many factors, but the cost of free zones is relatively low. It is, therefore, not easy to summarize the total cost of setting up a company in the Dubai Free Zone, as the latter figure comprises many elements. Apart from the cost of the free zone license itself, there is also the cost of the premises, if required, and the visa fee.

Why set up your business in Dubai Free Zones?

Setting up a business in a Dubai Free Zone has many advantages. One of the most important is 100% ownership of the business and 100% tax exemption. The tax exemption is a great option for foreign companies and business owners who want to use the UAE for regional manufacturing or as a distribution base.

Dubai Free Zones are very popular among entrepreneurs and business owners for setting up companies as they have a reputation of being tax-free zones with free trade ports that can be wholly owned by the person who creates them. Furthermore, setting up a company in the Dubai Free Zone is not limited by the presence of a local sponsor, which is also an incentive to increase foreign investment. Registering a company in the Dubai Zone is very simple and only requires the arrangements for share capital to be made before applying for a license.

Freedom to do business, significant tax savings, and excellent government policies attract investors and businessmen to settle in Dubai Free Zones.

Before setting up a business in one of Dubai’s free zones, ensure you have the right resources. See professional advice and guidance on the various incorporation and registration requirements.

Click here for more information!

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article