The United Arab Emirates, with its booming industrial setup, has become a popular destination for foreign investors and budding entrepreneurs. The city of Gold, Dubai is currently one of the easiest and most sought places to register a company in the UAE. This is because of the numerous advantages that Dubai offers to foreign investors who are interested to open a business in Dubai free zone. That’s why new industries are emerging day by day in Dubai, thus, contributing to the growth of the country’s economy.
Other than up-scaled infrastructure and diverse atmosphere, Dubai has many other things to offer to new companies, be it low-scale start-ups or big corporations. Moreover, it ensures to satisfy the needs of those interested in company formation in Dubai feezones.
So, If you are looking to get started with a business setup in Dubai freezone, then this blog is a perfect guide for you.
What are Freezones in UAE?
Freezones, also known as Free Trade Zones, are special economic zones designated by the UAE government to provide a tax-free environment for companies and investors. In simple words, the investors enjoy very low or “privileged” tax and customs rates on goods and services. These zones were mainly set up to boost international businesses and investment in Dubai, UAE. Since the freezones are out of the UAE government’s jurisdiction, it is fully controlled and supervised by the respective Freezone authorities. Every freezone has its own department of authorities that takes care of the registration and licensing of the companies in their particular region or area.
As of now, the Dubai freezones have played a vital role in the UAE’s economic growth by attracting global investments, and enhancing international business. Therefore, it is a hit among investors and traders all around the globe for company formation.
Most suitable Freezones for company setup in Dubai
- DWC – Dubai World Central/Dubai South Freezone
- JAFZA – Jebel Ali Free Zone
- DSO – Dubai Silicon Oasis
- Dubai Airport Freezone
- DMCC – Dubai Multi-Commodities Center
- DMC – Dubai Media City
- DIC – Dubai Internet City
- D3 – Dubai Design District
- DWTC – Dubai World Trade Center
Why should you open a business in Dubai Free Zone?
Dubai is now a global business hub due to its diverse and global business model. Besides, the easy business setup procedure and favorable tax regime of Free Zone make it more ideal for company foundation.
Moreover, there are plenty of other reasons and advantages of starting a company in Dubai freezones. For example,
- The overall procedure to open a business in Dubai free zone is simple and quick.
- The ownership of the company rests with the foreign owner itself. That means, they do not have to look for a local sponsor who will hold the majority of the company stakes.
- The company owner can freely transfer the UAE-earned funds and profits to their home country.
- The investor enjoys an exemption from corporate taxes, income taxes as well as trade tariffs.
- There are also some designated Freezones that are VAT-exempt.
- The freezones allow a hassle-free company setup by facilitating single-window clearances for administrative work.
- There are no visa restrictions in Dubai freezones. The investor can not only benefit from a 3-year visa but can also sponsor their families. In addition, the company can hire as many skilled and diverse staff, from within as well as outside of UAE.
- While renewing the license, the company owner does not have to file annual audit reports.
- Freezones are usually located in strategic locations, such as nearby airports and seaports. This, thus, helps in enabling trade with international markets and increasing connectivity at a global level.
- Dubai freezones offer a wide range of business activities for investors to choose from. Along with that, they also offer infrastructure facilities such as office spaces, warehouses, and factories, thus, reducing the time and money of the business owner.
Read Also: How to Start a Restaurant Business in Dubai?
Types of licenses available in Dubai Freezone
To open a business in Dubai free zone and legally operate it in the UAE, the investor must first procure a valid license for the company. The freezone authorities where the business is set up issue the business license for the company.
Additionally, there are several licenses available in Dubai freezones from which the investors can choose according to their business requirements. For example,
- General trading license
- Trading license
- Industrial license
- National industrial license
- Service license
Types of company structures available for business setup in Dubai Freezone
- Free-zone limited liability companies
- Free zone companies
- Branch of an established company
Process to open a business in Dubai Free Zone
Dubai freezones offer a quick and easy company incorporation procedure, which includes the following steps:
- Decide the legal structure of the business
- Choose your business activity
- Select the freezone
- Find a suitable company name
- Apply for a business license
- Submit all the requisite documents
- Obtain the necessary approvals
- Get the license
- Open a corporate bank account
- Apply for the visas
Documents required for business setup in Dubai Freezone
- Passport copies of the owner/partners
- UAE visa/entry permit
- Application form
- Memorandum of association and Articles of Association
- Business plan
- Original reference letter from the bank
- Trade name registration approval/certificate
Key points to remember:
- The number of shareholders involved in company formation determines the business form of the free zone company. Some freezones allow for single shareholders, whereas some allow company setup with multiple partners.
- The owner or shareholders must remember to draft and duly submit the Memorandum and Articles of Association.
- Each freezone authority has its own rules and policies. Hence, the share capital requirements for opening a free zone company depend on the freezone you choose as your work base.
- Every company in the freezone must compulsorily apply for a business license based on its activities. In addition, they must also renew it accordingly with their respective freezone authorities after completing all the legal formalities. A business venture operating without a valid license is bound to hefty penalties or other severe punishments.
- Foreign investors must hire a local agent to complete the company registration procedure without any delays and troubles.
- When choosing a freezone for company formation, investors must know that every freezone provides licenses for particular activities or sectors. For example, Dubai Media City, Dubai Silicon Oasis, and Dubai Internet City are dedicated to the software and media groups. Likewise, Dubai International Academic City and Dubai Knowledge Village are home to the education industry.
Conclusion
Company formation in Dubai, UAE has become easier. All thanks to the freezones that have been established all around the nation. The process of business setup in Dubai is different in different freezones. However, they are much more convenient than the company formation process in mainland. Also, the steps of the application and registration process depend on the freezone you choose for your business.
With more than 30 freezones located in Dubai, it might be a tough call to decide on the right location to open your venture. Therefore, it is advisable to take such decisions under expert supervision.
Shuraa business setup can recommend you the right solutions for all your business requirements and help you to open a business in Dubai free zone successfully. Besides, we believe in carefully evaluating the type of business, capital requirements, and other important factors that are required for company registration in freezone and also enable its economic growth.