What is a UAE Free Zone and What Types of Companies Can be Established There?
Also referred to as special economic zones or free trade zones, these areas aim to attract foreign investment through tax benefits and cutting-edge facilities. However, the benefits of free zones extend beyond these incentives; they are specifically designed to serve as the optimal location for setting up a business in Dubai. Each free zone is regulated by a distinct authority, which supervises the issuance of business licenses and activities within the zone. The free zones are typically designated for specific industries, and currently, there are more than 25 free zones in Dubai itself and many more spread across the emirates.
Each freezone has different type of focus and the nature of business you can setup depends on the freezone’s restrictions.
What You Need to Know Before Setting up Your Business
If you’re thinking about setting up a business in a UAE free zone, there are a few key things you should keep in mind to ensure a smooth and successful process. Here’s a helpful guide to get you started:
1. Choose the right free zone for your business: With over 40 free zones in the UAE, each with its own unique benefits and advantages, it’s crucial to choose the one that’s best suited for your business type and requirements.
2. Obtain the necessary licenses and approvals: Once you’ve found the right free zone for your business, you’ll need to obtain the necessary licenses and approvals from the relevant authorities. This can be a time-consuming process, so it’s important to begin early.
3. Establish your company structure: After you’ve received all the necessary licenses and approvals, it’s time to establish your company structure. This involves selecting a legal entity (such as an LLC or sole proprietorship), opening a bank account, and registering your company with the Chamber of Commerce.
4. Comply with UAE regulations: As a UAE-based business, it’s essential to comply with all applicable UAE laws and regulations. This includes obtaining the required permits and licenses from various government entities, as well as adhering to labour laws, tax laws, and other regulations.
5. Hire experienced professionals: Establishing a business in a UAE free zone can be complex, which is why it’s important to hire experienced professionals who can guide you through the process and ensure your success.
Steps to starting business in freezone
Preparing to establish your free zone company in the UAE involves several important steps, documents, and procedures. Follow this comprehensive guide to help you navigate the process:
1. Select the ideal free zone: The UAE boasts numerous free zones, each offering unique advantages and disadvantages. Conduct thorough research to identify the one that aligns with your requirements.
2. Acquire the essential licenses and permits: After pinpointing your preferred free zone, obtain the required licenses and permits from the respective authorities. As this could be intricate, it’s wise to consult professional assistance.
3. Register your company: With all licenses and permits in hand, proceed with registering your company with the relevant authorities. Since this process can be complicated, seeking professional help is recommended.
4. Set up a bank account: After registering your company, open a bank account to commence business transactions in the UAE. While this process is relatively straightforward, compare different banks to find the best deals on fees and charges.
5. Commence business operations! With everything in place, you are now ready to conduct business in the UAE. Always adhere to all applicable laws and regulations and stay informed about any changes that could impact your business.
Advantages of Establishing a Business in UAE Free Zones
The United Arab Emirates (UAE) has numerous free zones that offer enticing benefits for businesses, such as 100% foreign ownership, zero personal income taxes, as well as no currency restrictions. Furthermore, there are other advantages, including:
– Access to a highly skilled workforce: With a large populace of well-educated and skilled workers, businesses can readily find the talent they require to prosper.
– Strategic location: Situated at the crossroads of East and West, the UAE is an ideal gateway for businesses seeking markets in both regions.
– Attractive incentives: The UAE provides businesses with an array of incentives, including discounts on business setup expenses and visa fees.
– Exceptional infrastructure: Boasting world-class infrastructure, the UAE simplifies operations for businesses.
Overall, the UAE free zones present a highly engaging and informative opportunity for businesses to thrive.
Other options other than Freezone
If you want to access the local markets or do international trade or branch out in many fields, then freezone may not be the ideal choice for you.
Mainland and Offshore are the other two options. To start a business in the mainland, you will have to get a business licence from the DED, and it is even possible to have 100% ownership of certain businesses.
Opening a bank account in freezone
A bank account is necessary for a freezone company, and you have the basic choices of opening a current or savings or investment bank account. The documents required are
Company Profile
Six months’ Bank Statement
Account holder’s resume
Proof of physical existence
Trade License
Copy of Valid Passport, and other relevant documents
Memorandum and Article of Association
Board Resolution
With these you can initiate the application for a business bank account in the freezone.
Starting a business in the freezone can be challenging, but it is a goal that, when achieved, will give you benefits several times greater. Hiring an expert will significantly reduce your workload, and Alchemist Corporate Services is ready to fill that role for you. With us, you will be able to start your business in the UAE easily. Contact us at +971556205750 to get a free consultation.
