Starting a Company Formation in Dubai Free Zone

Starting a Company Formation in Dubai Free Zone

Globally popular as the most advanced business hub, UAE provides the most affordable and convenient modes of doing business. Entrepreneurs and investors from around the globe migrate to UAE due to its diverse and global business model.

Besides, to attract more foreign investments, the UAE government has set up freezones in different emirates. Dubai freezones are widely popular because of their best markets, friendlier policies, and pro-business atmosphere. Hence, free zone company formation in Dubai has become the new trend on a global level.

The idea of “free zones” was established to develop and promote business in many countries, especially the United Arab Emirates. UAE freezones offer 100% ownership, zero tax privileges, and several other advances to the company owners. This, thus, makes business setup in Dubai free zone a favorable option for international operations.

What is free zone?

Free zones are basically free trade zones where goods and services are traded at a very low or “privileged” tax and customs rate. These are government-nominated special economic zones set up to invite foreign investments and boost trade within as well as outside the country.

Some of the major freezones in the UAE are: Usually, when an investor plans to start a business in Dubai or UAE, they are given options for locations for their business – Mainland or Freezones. While forming an establishment in Dubai mainland, the investor has to choose a local partner or sponsor who will hold the majority of the company shares. On the other hand, freezone allows full ownership of the business to the foreign investor. This very particular trait compels them to go for free zone company formation in Dubai without any second thoughts.

In addition, Freezones in Dubai are special sites as they are mostly located at transit places like seaports, and airports to facilitate trade, that too without paying any customs duties.

Moreover, various free zones set up across multiple locations encourage a wide range of business activities that the investor can choose from.

Dubai Free Zones Abu Dhabi Free Zones Sharjah Free Zones Fujairah Free Zones Ajman Free Zones Ras Al Khaimah Free Zones Umm Al Quwain Free Zones

Benefits of free zone company in Dubai No involvement of the local sponsor

Well-established transportation facilities

Complete ownership of the business

High-quality labor available at affordable costs

Freedom to repatriate earned profits and assets

Permission to open an independent bank

Investors are not bound to pay any kind of taxes

account

No restrictions over foreign currency exchanges Free transfer of funds No customs duty is imposed on import or export Availability of energy resources at reasonable rates Easy procedure for business license acquisition Abundant office spaces available both for sale as well as on lease Convenient and affordable visas for employees

Availability of warehouses and storage units The simple and quick setup procedure Exemption from VAT(Value Added Tax) Logistical advantages Single window administration Magnificient infrastructure No need to submission of annual audits

No time restrictions for business operations

Business formation can be done remotely

The prime location enables greater growth potential

Easy documentation formalities

Types of Free-zone corporate entities available in Dubai Mainly, there are three types of business structures allowed in Dubai free zone company formation –

01

Free Zone Establishment (FZE)

02 Free Zone Company (FZCO) 03 Branch Company

Free Zone Establishment (FZE)

FZE involves a single shareholder for its formation, which can be an individual or a corporate entity.

Free Zone Company (FZCO) FZCO establishment involves the unification of two or more shareholders, that can be individuals, shareholders, or a mix of both. The liability of each shareholder is bound to the amount invested in the formation accordingly.

BRANCH COMPANY A branch is basically a sub-division of an existing establishment within or outside the UAE. Therefore, the existing parent company is the sole supervisor and controller of the branch company.

Types of licenses provided in Dubai Freezones

Industrial license

Trading/Commercial license

This license is issued to manufacturing businesses which allows them to process and pack goods for sale.

This allows companies to involve in all kinds of trading activities.

Professional license With a professional license, individuals or companies get the authority to deliver professional services such as consultancy services, public relations, etc. anywhere in the UAE.

Criteria for business setup in Dubai free zone Type of entity While planning for a free zone company formation in Dubai, the investors need to decide the type of corporate entity they want to establish, along with the location where they want to operate their business. Different entities follow different laws. Similarly, different freezones have different business requirements.

Trade name A trade name helps to identify the products and services of the company in the market. Hence, it is important to choose a name that is unique as well as different from the competitors. Additionally, the business owners must also consider the naming convention protocols laid by the government to fix an appropriate and well-chosen name for the business.

Business license A business license helps a company to operate and sustain itself in a locality legally. Therefore, it is obligatory for any business to acquire a business license as per their business needs and activities. Besides, freezones in Dubai offer separate licenses for separate business activities.

Working space In freezones, investors can either purchase an office space or rent one, whichever is preferable to them. Hiring an office space is much more convenient than buying as the owners can be free from the hassle of selling the property at the time of exit.

Approvals and permits Companies established and operating the freezone are supervised by the respective freezone authorities. Hence, the investor while registering the business or applying for a license must obtain proper approvals and confirmation from the authorities to avoid any further legal troubles.

Steps for free zone company formation in Dubai Decide the legal type of the business. For example, FZE, FZC, Branch, etc.

Reserve a name for the company Choose a freezone as per the activities and other requirements of the business.

Apply for business registration and license Submit all the essential documents Wait for the approval from the authorities Obtain the license and start operating your business

Once the investor decides to set up a business in Dubai free zone, they have to follow certain steps to accomplish this task. The steps are as follows:

Documentation for free zone company formation in Dubai The investor might have to produce a number of documents for a free zone company formation in Dubai.

However, the basic documents that the investor has to present to the freezone authorities include : Registration and license application form Business plan MOA(Memorandum of Association) AOA(Articles of Association) Business card Copy of passport of the owner or shareholders Original reference letter from the bank of shareholders Business license of the existing business, if any

The Dubai government has made the above-discussed process simple, easy as well as friendly for the investors. The whole process takes around three to four weeks to complete and eventually paves the way for investors for free zone company formation in Dubai.

Connect with Shuraa Business Setup Shuraa team will help you with your business setup in Dubai or any other free zones in UAE. We will guide you to take your business forward and also assist you with everything you need for your business establishment in UAE.

Contact Us Sheikh Zayed Road, Office 501, 5th floor, Aspin Commercial Tower, Dubai, UAE

info@shuraa.com www.shuraa.com +971 44081900, +971 50 777 5554