Many businesses shy away from investing in the UAE due to the compulsion of having a UAE national as a partner with 51% shares owned by them. Because of this, free zones have become a popular form of business registration in the UAE, where 100% foreign ownership is allowed. A free zone, or free trade zone, is an area with special tax-free status and low trade barriers where goods can be manufactured, imported/exported, handled, or reconfigured without paying any customs duty. Free trade zones are generally located in strategic geographical locations like national borders, international airports and major seaports, to maximise trading advantages.
Benefits of Setting up a Business in the UAE Free Zones :
There are many benefits of starting a business in the UAE. But the UAE free zones offer some additional advantages if an investor decides to set up a business in one of the free zones. They are:
• 100% foreign ownership
• 100% repatriation of capital and profits
• 100% exemption from corporate, personal and income taxes
• 100% free transfer of funds, and no foreign exchange controls
• Exemption from all import and export duties
• Low freight charges
• Abundant and inexpensive energy
• Inexpensive workforce, and easy recruitment procedures
• Efficient communication procedures and single-window administration
• Liberal government policies and legal framework
Types of Licenses Available in the UAE Free Zones:
Business formation in UAE free zones is incomplete without procuring a business license. Following types of business licenses can be obtained by applicants in the UAE free zones:
Allows investors to trade in all kinds of products.
Grants a time-limited authorization to perform industrial, commercial, or consulting activities.
Allows law firms, accounting firms, and business consultancy firms to operate.
Permits importing raw materials, manufacturing goods, and exporting finished products, across global boundaries.
Investors can avail this license to avail warehousing facilities on lease for distribution, packaging, and storage of goods.
Permits applicants to manufacture products.
LIST OF FREE ZONES IN UAE
Why Set Up a Business in the UAE Free Zones?
Companies registered outside the UAE free zones cannot be owned solely by a foreign national (a maximum of 49% foreign ownership by the foreign national, and at least 51% ownership by a UAE national is mandatory), which is one of the primary reasons why global investors throng to UAE free zones for business investment. Apart from this, there are many advantages for start-ups setting up their business in free zones. Lucrative incentives and the wide spectrum of opportunities provided to investors is what make free zones in the UAE the most sought-after areas for setting up a business. There are a few reasons listed below as to why one should set up business in the UAE.
1. A Wide Range of Business Licenses and Activities
A company in the UAE free zone is permitted to engage in a variety of business activities with multiplicity in the type of licenses. The only thing is UAE free zone companies are not allowed to engage in is the insurance business.
2. Confidentiality
A free zone company is protected by the highest level of privacy adopted in the UAE about the identity of its owners, directors, and activities within acceptable international standards.
3. Bank Account and Registered Office
A free zone company is allowed to have a registered office at the location of the free zone area it is licensed under. Additionally, one can open a bank account anywhere outside the UAE.
It takes about a week to complete the UAE free zone company setup process, and around 2 to 3 weeks to obtain a UAE residence visa when an applicant contacts Rapid Growth for support. We are a registered company, well informed of the company formation rules and regulations in the Middle East, and have been helping companies gain a foothold in the United Arab Emirates since 2006.
Free zone Company set up in the UAE is rewarding, with tax exemptions, lower establishment overheads, business-friendly government policies, and hassle-free administration. If you are in search of a business partner to ease your company formation process in the UAE and launch your business dreams into action, contact our team for assistance – we’ll be glad to help!
What are the Procedure to Set Up a Business in the UAE Free Zones?
1. Determine the type of legal entity
Determine which type of entity you want to set up in any of the free zones. The capital requirement for such entity depends upon that particular free zone where you want to form a company; for example, there is no minimum capital requirement for setting up a business in Dubai South, whereas in DMCC you are supposed to have a minimum share capital requirement of AED 50,000.
2. Choose a trade name
After deciding the type of legal entity, choose a trade name for your company. Note that you ought to cross-check with the respective free zone authority about the permitted trade names and whether the intended name has already been registered.
3. Apply for a business license
After choosing a trade name and registering the same in the free zone authority’s portal, you have to apply for a business license. The list of the different business licenses issued by the free zone authorities has been stated above. The type of business license depends on the primary activity of your business. You need to submit the supporting documents while applying for the license.
4. Choose an office space
Free zone authorities provide flex-desk office service to support start-ups. You can either buy or lease office spaces in free zones. Office requirements depend on the number of employees and type of business activity of your company.
5. Get pre-approval, register your business, and get the license
Get the initial approval and the related business approvals from the specific authorities, register your business at the portal, and get your license. It will merely take 1 weeks to get done with this process. Once you get the license, you are good to start your business
What are the Documents Required to Set Up a Business in the UAE?
General Documents:
Duly filled application license form
Passport Copy of the share holder
Residence Visa/ Tourist Visa of the shareholder / Manager
Passport Size Photograph
Residence Proof (Any Country)
