The UAE has a network of 45 Free Trade Zones that allow for 100% foreign ownership, access to international markets, and many benefits.
Free Zones are licensing jurisdictions that are autonomous from direct government control and have their own governing bodies and regulations. Companies that are incorporated under these Free Zones are governed by said regulations.
The Free Zones in Dubai are established at specific places of transit like seaports and airports to provide better convenience and trading opportunities. Some of the popular Free Zones in the UAE include Dubai Multi Commodities Centre (DMCC), International Free Zone Authority (IFZA), Meydan Free Zone, and the like.
At Ascent Partners, we understand the detailed requirements for setting up a Free Zone business and work towards providing a hassle-free experience for entrepreneurs looking to set up their next venture in the UAE.
Setting up a Free Zone business is beneficial in more ways than one. Some of them include
Complete foreign ownership
Readily available workspaces
Absence of currency regulations
Easy company incorporation
Import/export duty exemption
Trouble-free immigration procedures
100% repatriation of capital and profits
Ability to recruit foreign nationals
How can I start a business in Dubai Free Zones?
Starting a business in Dubai Free Zones would require you to undergo the following steps:
Selecting a business activity: When starting any business in the UAE, the first step would be to determine the business activity that your business would fall under. The type of licence and the jurisdiction to be selected would also impact where the company would be registered.
Selecting a Free Zone: The next step would be to select the right Free Zone for your business activity—sector-specific or a multi-sector Free Zone. Your business activity will be a determining factor in choosing the right Free Zone for your company.
Choosing a company name: After you have chosen the right Free Zone for your business activity, the next step would be to choose a company name. In the UAE, for instance, you would have to adhere to certain regulations when choosing the right company name. For example, the company name should not include any blasphemous words or language or references to religious or political organisations.
Moreover, when choosing the company name, you should ensure that it belongs to a partner or shareholder and use only full names instead of initials or abbreviations. The final approval for trade names would rest with Dubai Economy and Tourism; the above-mentioned regulations may be subject to change without any prior intimation.
Applying for your licence: The documents required when setting up a company with Dubai Free Zone would depend on the type of licence and the Free Zone selected. Some of the common documents that would be required when applying for a Free Zone company licence would include the shareholder passport and visa, if applicable; the licence application form; a detailed business plan; board resolution; or a memorandum or articles of association (MoA).
Obtaining an office space: Free Zones are ideal for businesses in the nascent and start up stages as the operational costs are lower. When setting up a company in Dubai Free Zones, you would be required to obtain an office space and an Ejari (tenancy contract) for your business; however, this may differ according to the Free Zone chosen.
Applying for residence visas: After your trade name and business licence have been approved, you can apply for residence visas for yourself, your shareholders, as well as your employees. When applying for visas, the process would remain the same for both employer and employee: having a valid entry permit, if applicable; undertaking a medical fitness test; Emirates ID registration; and the subsequent visa approval and issuance.
The visa quota will differ depending on the Free Zone you choose for your business; for instance, some Free Zones will only have a flexi-desk or a smart desk option which will only allow for two or three visas but other Free Zones may have larger office space and would allow for more visas for employees, while some Free Zones may allow you to obtain work visas without renting an office space.
However, it is important to note that in the case of a freelance business, you will not be allowed to hire any additional employees as you will be listed as the sole proprietor. For some of the popular Free Zones offering freelance visas, you can check out our article here.
Opening a corporate bank account: With your Free Zone business licence, you will be able to then open a corporate bank account. For more details on how you can open a bank account in the UAE, you can check out our detailed article here.
What are designated Free Zones?
In 2018, the UAE announced the introduction of Value Added Tax on goods and services sold within the country. This would apply equally to tax-registered businesses both on the mainland as well as in the Free Zones.
However, certain Free Zones have been considered by the UAE Cabinet to be outside the UAE for tax purposes. These Free Zones are considered as Designated Zones. Any trade conducted within or outside a Designated Zone is VAT-free; however, there are certain exceptions to this.
For more information about Designated Zones, check out our detailed article here.
What is the cost of starting a business in Dubai Free Zones?
Each Free Zone is governed by its own regulations; therefore, the charges and company set-up costs can vary significantly. For more information, get in touch with our experts at Ascent Partners.
At Ascent Partners, we provide bespoke, end-to-end solutions for entrepreneurs looking to set up their next venture in the UAE.
With services ranging from choosing the right business activity and jurisdiction to visa and corporate bank account opening provisions, we work alongside you to strategise and start up so that you have the freedom to scale your business the way you want in Dubai.
Set up a Free Zone Company with us today! Get in touch with us today!