Business Setup in UAE Free Zone
Free Zones are one-of-a-kind business establishment areas, allocated for industry-specific activities. They are specially designed for hassle-free trading and give the most liberty than any other business formation, in terms of company ownership.
Of the other two forms of business setup options that there are in the UAE, free zones offer the most advantage when it comes to tax benefits. By far, tax is one of the most determining factors for business setup in distant shores. Free zones in UAE are there to cater businesses without burdening on tax.
The UAE offers an ocean of opportunities for foreign nationals seeking to launch businesses, with the free zones. These extensive, specially designed economic zones cater to business of all kinds with the best infrastructure possible — from airport to seaports, office space and above all, appealing tax regime and ownership prospects.
What is a Free Zone?
Free Zones are special economic zones dedicated to foreign trade operating from the UAE borders.
These special economic zones ensure 100% company ownership as well as tax retention even for the foreign nationals. While usually, foreign businesses are often burdened with huge taxes and customs duties, the same is not the case in UAE free zones.
There are a number of free zones operating in the UAE soil. Each specializes in a specific industry. For instance, the Dubai Airport Free Zone deals with the aviation industry and not with the media. In the same way, Dubai International Academic City has nothing to do with manufacturing and retail as it is all about academics.
What is a Free Zone?
Free Zones are special economic zones dedicated to foreign trade operating from the UAE borders.
These special economic zones ensure 100% company ownership as well as tax retention even for the foreign nationals. While usually, foreign businesses are often burdened with huge taxes and customs duties, the same is not the case in UAE free zones.
There are a number of free zones operating in the UAE soil. Each specializes in a specific industry. For instance, the Dubai Airport Free Zone deals with the aviation industry and not with the media. In the same way, Dubai International Academic City has nothing to do with manufacturing and retail as it is all about academics.
What is the difference between Mainland & Free Zone Company setup?
Mainland and Freezone are two of the most preferred business set up structures in the UAE. How Business Setup in UAE Free Zone differs from that of the Mainland? Here you go:
Free zone |
Can do business only within the freezone or outside UAE market |
In a free zone company setup one can own 100% shares of the business, even for foreign ex-pats |
No stipulated bar on office space |
There are limitations in the number of visa one can avail with a freezone company setup |
UAE Free Zone Business Setup Cost is lesser |
Mainland |
Is free to do business inside the UAE market sans any restrictions as well as outside |
A foreign ex-pat can only hold 49% stake at a Mainland company |
A minimum 200-sq feet office space is required |
Unlimited visa can be applied against a Mainland company formation |
Cost of setting up a mainland company is more |
What are the different Free Zones in UAE? Free zones in UAE span across Dubai, Ajman, Abu Dhabi, Sharjah, Ras al-Khaimah, Umm al-Quwain, and Fujairah among others. Here’s a list of free zones available in the UAE:
- Abu Dhabi Airport Free Zone (ADAFZ)
- Abu Dhabi Global Markets (ADGM)
- ADPC – Khalifa Port and Industrial Zone (KPIZ)
- Industrial City of Abu Dhabi
- Higher Corporation for Specialized Economic Zones
- Masdar City Free Zone
- Ajman Free Zone
- Ajman Media City Free Zone
- Dubai Academic City
- Dubai Airport Free Zone
- Dubai Biotechnology & Research Park (DuBiotech)
- Dubai Car and Automotive City Free Zone (DUCAMZ)
- Dubai Design District
- Dubai Gold and Diamond Park
- Dubai Healthcare City
- Dubai Industrial City (DIC)
- Dubai International Academic City
- Dubai International Financial Centre
- Dubai Internet City (DIC)
- Dubai Knowledge Village
- Dubai Logistics City
- Dubai Media City
- Dubai Multi Commodities Centre
- Dubai Outsource Zone
- Dubai Silicon Oasis
- Dubai Studio City
- Dubai Techno Park
- Dubai Technology and Media Free Zone
- International Media Production Zone
- Jebel Ali Free Zone
- Economic Zones World
- Dubai South or DWC
- Dubai Science Park
- KIKLABB
- Hamriyah Free Zone
- Sharjah Airport International Free Zone
- The U.S.A. Regional Trade Center (USARTC) Free Zone
- Sharjah Publishing City Free Zone
- Sharjah Media City Free Zone (Shams)
- Ras Al Khaimah Economic Zone (RAKEZ)
- RAK Maritime City Free Zone Authority (RMCFZA)
- Ras Al Khaimah Investment Authority
- Ras Al Khaimah Free Trade Zone
- Ras Al Khaimah Media Free Zone
- Fujairah Free Zone
- Fujairah Creative City
- Umm Al Quwain Free Trade Zone (UAQFTZ)
Benefits of Business Setup in UAE Free Zone
Free zone companies in UAE get a number of benefits against other forms of business setups in UAE. They are:
- 100% foreign ownership for all
- No need to pay corporate tax for up to 50-years
- No tax on import and export
- No tax on personal income
Starting a business in Dubai free zones is easy since they are designed for quick and efficient company establishment.
Authorities demand minimum paperwork for Business Setup but still, things can get a bit confusing. Here’s a prelim sketch about how to start a business in UAE free zone:
Choose from the different types of legal entities you can set up in an UAE free zone. These are: Free Zone Establishment, Free Zone Company, Branch of a Local company, Branch of a foreign company”
UAE places strict emphasis on the name for your Free Zone Company in UAE. Make sure you comply with the correct trade name. It must be unique as well as respectful to the culture.
Once the above two steps are met, go for the license application in the free zone you’re setting your business in.
Choose the type of office you want to set up from the available choices. You can either buy or lease one. Shared office options are also available.
Wait until the respective free zone authority gives a noc for continuation with you UAE free zone business setup
Once all the above steps are met, get your business registered with an appropriate name
Finally obtain the trade license and get into work
RAS Corporate Advisors to help you with the formalities of Free Zone Company Setup in UAE if you want to focus on other things.
Types of Entities One Can Setup in UAE Free Zone?
There are two types of business setup in UAE free zone available for you to choose from. Both these differ on the basis of shareholders in the Free Zone Company. Like, will there be a legal shareholder or natural? Also it must be noted, both the free zones don’t register the two types of legal entity.
UAE free zones broadly offer two distinct types of business setup entities. They are:
- FZE or Free Zone Establishment and
- FZ Co. or Free Zone Limited Liability Company
Which is the most affordable Free Zone in UAE?
Fujairah Creative City is one of the most cost-effective free zones in UAE. There is no mandated share capital requirement, license packages are relatively affordable, incorporation process is easier, and the best part, you don’t need to be physically present in the UAE to start a company.
Other noteworthy free zone authorities that are cost-effective are:
- International Freezone Authority (IFZA)
- Ras Al Khaimah Economic Freezone (RAKEZ)
- Umm Al Quwain Free Trade Zone (UAQ FTZ)
- Ajman Media City Freezone
What are the types of licenses in freezone?
One can choose from the four types of free zone company setup licenses in UAE. They are:
- Free Zone Establishment
- Free Zone Co. or Free Zone LLC
- Branch of a local company
- Branch of a foreign company
Which Documents Are Required for Business setup in UAE?
Just so you know, for setting up a free zone establishment foreign expats don’t need to present attested documents. But when it comes to setting up a branch of a foreign company in a freezone, the person must present attested documents from the country of origin, as well as legalized from the UAE Embassy from that country and super legalized from Foreign Office at UAE.
Following documents required for for company formation;
- Passport copy
- Visa copy/ UAE immigration entry stamp
- National ID
- Proposed company name
- Structure [sole establishment/ LLC]
- Number of shareholders
- Passport size photograph
How Long Does It Take To Register Free Zone Companies in UAE?
Once all the necessary documents have been filed, formalities have been met, it usually takes 1-2 working days for the registration to process.
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