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Things to Consider for Business Setup in Freezone

By Shivangi - 15 Dec 2021 Last Updated: 23 Apr 2022
Things to Consider for Business Setup in Freezone

UAE Free Zones are designated locations in the UAE where expatriates can own and manage their businesses completely. For expats from all over the world, registering a free zone company in the UAE is a promising business investment.

Due to the UAE Government's and Free Zone Authorities' business assistance measures, the UAE Free Zones have become the region's key trade center. With a low business registration fee, anyone may set up a Freezone Company in the UAE in a hassle-free manner. The minimum Free Zone Company Setup Cost in Dubai to start a business without a visa is AED 11,800.

Due to the stable political conditions, secure life, efficient law and order, tax haven status, and many other business perks, foreign investors select UAE to create a company. In the United Arab Emirates, there are more than 45 free zones, each of which houses over 8000 businesses. UAE free zones are unique and a great place to start a business because of qualities like business freedom and no tax jurisdiction.

Opening a Business in the UAE FreeZone

If you want to start a new firm in a growing economy, it doesn't get much better than the United Arab Emirates. The country is acknowledged as one of the Middle East's most prominent economic hubs. The United Arab Emirates is noted for its strategic position and ease of business formation.

In the United Arab Emirates, there are seven emirates, each with its own set of benefits for starting a business on the mainland, in a free zone, or offshore.

Dubai

Dubai is the financial capital of the United Arab Emirates. Real estate, trade, tourism, and financial services are the Emirate's principal industries. Furthermore, the emirate contains around 30 Free Zones, each of which offers tax breaks and property ownership advantages.

The Following is the List of Freezones in Dubai:

  • Dubai Academic City
  • Dubai Airport Freezone
  • Jebel Ali Freezone (JAFZA)
  • Dubai International Financial Centre (DIFC)
  • Dubai World Central
  • Dubai Media City (DMC)
  • International Freezone Authority (IFZA)
  • Dubai Design District Freezone
  • Dubai Internet City (DIC)
  • Dubai Multi Commodities Centre (DMCC)

Sharjah 

Sharjah is an amazing spot in the United Arab Emirates to establish a business. You'll get all the advantages of a big city without the high cost. In terms of technology, arts, and culture, the area has seen tremendous growth in recent years.

The Following is the List of Freezones in Sharjah:

  • Hamriyah Freezone
  • Sharjah Airport International Freezone
  • Sharjah Media City Freezone

Abu Dhabi 

Abu Dhabi is the capital of the United Arab Emirates. It is one of the wealthiest cities in the UAE and is known for its luxury. Real estate, industrial development, and tourism are the primary industries in this area.

The Following is the List of Freezones in Abu Dhabi:

  • Abu Dhabi Airport Freezone
  • Khalifa Industrial Zone Abu Dhabi (KIZAD)
  • Abu Dhabi Ports Company (ADPC)
  • Masdar City

Ajman

Ajman is at a fantastic location, just at the entrance to the Arabian Gulf. From here, business owners can reach major cities, four ports, and two international airports. This Emirate is known for its manufacturing, retail, and service industries.

The Following is the List of Freezones in Ajman:

  • Ajman Media City Freezone
  • Ajman Freezone

Fujairah

Fujairah is the fifth-largest emirate in the country. It is a hub for import and export businesses because it has both a seaport and an airport. It's also the only Emirate on the Arabian Gulf, which means it's well-connected to other major cities like Dubai, Sharjah, and Abu Dhabi.

The Following is the List of Freezones in Fujairah:

  • Fujairah Creative City
  • Fujairah Freezone

Ras Al Khaimah

Ras Al Khaimah (RAK) is only 45 minutes by car from Dubai. In the Far East, its Free Zones are the most accessible to China, India, Iran, Pakistan, and the Commonwealth of Independent States.

The Following is the List of Freezones in Ras Al Khaimah:

  • Ras Al Khaimah Economic Zone
  • Ras Al Khaimah Media Freezone
  • RAK Maritime City

Umm Al Quwain

Because it is adjacent to Dubai and Sharjah, this up-and-coming state is great for international travel. With a quick registration process, Umm Al Quwain is recognised as one of the most cost-effective Emirates for establishing a business in the UAE.

The Following is the List of Freezones in Umm Al Quwain:

  • Umm Al Quwain Free Trade Zone

What is the Best Way to Start a Business Setup in Freezone?

Foreign investors who want to start a business setup in Freezone must follow these rules:

  • Make a decision about the company's organizational structure.
  • Fill out a residency permit application (if applicable).
  • The name of the company will be retained in reserve.
  • submit an application for a business license
  • Obtain the company's legal address.
  • Obtain work licenses for international workers (if required).
  • It's good to know that the free zone authority where the business will operate will handle all visa applications and company registration procedures in a hurry.
  • Our experts can help you prepare the documentation you'll need to start a free zone business in the UAE.

Requirements to Register Business in Freezone

Here are the Basic Requirements for Business setup in Freezone:

  • Most free zones allow for single or many owners, and the corporate form of the free zone firm is determined by the number of shareholders.
  • The Memorandum and Articles of Association are the paperwork that must be completed before a free zone corporation can be registered.
  • The Dubai free zone authorities calculate the amount of money required to start a free zone business (each free zone has its own regulations in this sense).
  • Any company, regardless of whatever Dubai free zone it chooses, must apply for a license depending on the activities it intends to do.
  • The appointment of a local agent is essential for foreigners to complete the Dubai free zone company registration process.

Types of Businesses that can be Started in Dubai's Freezones

Foreign entrepreneurs can form free-zone limited liability companies or work as sole traders, while foreign corporations can open branch offices or form free-zone businesses with corporate shareholders. Alternatively, investors who seek for one of the free zone authorities' professional licenses can operate as sole proprietors.

Regardless of the type of business that is formed in one of Dubai's free zones, the following licenses are available:

  1. General trading licenses include trading licenses, industrial licenses, national industrial licenses, and service licenses, among others.
  2. Depending on the free zone where the company will be founded, minimum share capital requirements apply to various types of activity.

The Freezones in Dubai have their own Taxing Structure.

One of the most compelling reasons for international investors to set up shop in the UAE is the taxation system, which mostly applies to corporations in the oil and banking industries. It's important to note that each Emirate has its own set of tax laws. Among them, Dubai has one of the most advantageous tax systems. In addition, Dubai contains a huge number of self-governing free zones with their own taxing regimes.

Important Steps in Starting a Business

It is considerably easy to start a business in a free zone. The authorities of the free zone require only the bare minimum of paperwork and time. The following are the essential stages to starting a business in a free zone.

  • Determine the legal entity's kind.
  • Choose a business name.
  • Make an application for a business licence.
  • Select an office location.
  • Obtain pre-approvals, register your company, and obtain a licence.

Here are just a few of the many reasons why entrepreneurs from all over the world choose to set up shop in the UAE:

  1. No personal or corporate taxes
  2. Growing economy
  3. No foreign exchange controls
  4. Access to a diversified economy
  5. Modern facilities and infrastructure
  6. Free zone benefits
  7. Low import duty
  8. Flexible government regulations

Steps to Choose types of Business Setup in Freezone

The Following are the steps to open Business Setup in Freezone:

Choosing a Business Setup in Freezone Type

In Dubai free zones, there are primarily three sorts of entities that can be established:

  • A foreign or domestic company's branch.
  • Establishment of a Free Zone Limited Liability Company (FZ LLC) or a Free Zone Company (FZ Co.) (FZE).

The number of stockholders and whether the shareholder is a natural or legal person are the differences between these types. A Free Zone Company can have two or more shareholders, whereas a Free Zone Establishment can only have one shareholder. An individual or a corporation can be a shareholder.

It's possible that not all free zones in Dubai will accept both types of businesses. As a result, you should verify with individual free zone authorities to see what kind of businesses they can register.

Choosing a Business Activity

After deciding on the type of company entity you want to create, you must decide on the type of business activity you want to engage in. In Dubai, many free zones allow for a variety of business operations. As a result, as an entrepreneur, you have a variety of options for starting a business. The decision to engage in a commercial activity is the first and most crucial of all the decisions you must make. Because the next two phases are dependent on the type of company activity you choose, this is necessary.

The Process of Choosing a Business License

The type of business licence you can apply for will be determined by the type of business activity you choose. The following are the several types of licences available in UAE free zones:

  • Trading/Commercial
  • Services/Consultation
  • Industrial
  • Educational
  • Media
  • E-Commerce
  • Offshore
  • Freelancer
  • Warehousing
  • Manufacturing

It's worth noting, however, that the Dubai Aiport Free Zone (DAFZA) allows for the acquisition of dual permits.

Choosing a Free Zone in Dubai

As previously indicated, the type of business activity you choose will decide the type of licence you can receive, which will allow you to select a free zone in which to operate. It's crucial to note that not all Dubai free zones provide for the same kind of company permits. For example, educational licences can be gained at the Dubai Academic City (DAC), but not at the Dubai Techno Park (TP).

Selecting a Business Name

The final objective is to come up with a trade name after you've learned all of the other things. It is recommended that the proposed name be checked with the respective free zone authority or the Department of Economic Development (if necessary) for guidelines on authorised trade names and to see if the name has already been registered.

  • The Department of Economic Development's (DED) general criteria are as follows:
  • The name must not offend the country's public morality or public order.
  • It must be followed by the company's legal form, such as LLC, FZE, DMCC, and so on.
  • It had to be the first time it was registered in the country.
  • It is appropriate for the sort of activity and legal status required.
  • It must not include the names or logos of any religion, governing body, or external organisation.

List of the Freezones in UAE

Here is the following list of freezone to learn which businesses are most likely to prosper, as well as how easy it is to set up a firm in the UAE.

Conclusion

Dubai is currently one of the most straightforward places in the world to incorporate a company. Apart from that, Dubai offers a plethora of benefits, which explains why the number of international investors interested in establishing a business in the Dubai free zones is continuously rising. In Dubai, entrepreneurs have two options for forming a company, as well as a choice of legal organisations from which to choose. They might choose to start a business either within the Emirate or in one of its freezones. Around 30 fully operational free zones and a few more in the planning stages are available in Dubai, meeting the needs of those wishing to launch a business in one of the city's free zones. Dhanguard can help you establish a company in one of the UAE's free zones.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

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