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Free Zone Company Formation In Dubai

Free Zone Company Formation In Dubai, UAE

Are you thinking about launching your own free zone company in Dubai? If so, you have come to the right place. Dubai's Free Zones present a distinct and appealing chance for entrepreneurs seeking to establish their businesses in a favorable business environment.

This guide will lead you through the crucial procedures and offer valuable perspectives on effectively navigating the process of establishing a free zone company in Dubai. We will cover everything you need to know, from grasping the advantages of free zone establishments to meeting legal obligations and selecting the appropriate free zone for your business, to kick-start your entrepreneurial venture in this flourishing economic center.

If you're prepared to explore the opportunities of setting up a business in the Dubai free zone and discover promising business possibilities with Anvi Business Solution, then let's begin!

Definition of a Free Zone Company

Economic zones known as free trade zones are commonly referred to as free zones. These areas allow for the exchange of goods and services with preferential tax and customs rates.

A commonly mistaken belief is that there is no difference between free zones and offshore corporations. However, this is not accurate. Free zone companies are located onshore and can operate in Dubai if they fulfill specific criteria. In contrast, offshore companies are established with the intention of doing business outside of their registered jurisdiction or the location of their primary owner.

There are approximately 67 free zones in the UAE, with new ones being established each year. Additionally, there are over 150,000 businesses situated in these free zones. Moreover, this number is continually rising.

The estimated expense for setting up a Dubai freezone company formation is around AED 11,900. However, the actual fee may differ depending on the specific free zone selected and the necessary visa conditions.

It is important to mention that free zone businesses now have the option to establish branch offices in the mainland. This can be achieved by registering the branch with both the Department of Economic Development (DED) and the Ministry of Economy using the same commercial name. This differs from the previous requirement of having a local partner, as the free zone company can now fully own the branch business.

These are the essential steps for setting up a free zone company in Dubai.

  • Identify the legal structure of the business.
  • Select a name for the business.
  • Submit an application for a commercial permit.
  • Decide on a suitable location for the office.
  • Obtain necessary approvals, register the business, and acquire the license.
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    The following steps outline the procedure for establishing a company in Dubai's free zone. Let's examine each step closely:

    Step 1. Identifying the Legal Entity Type

    Selecting the appropriate legal framework for your business is crucial, whether it be a limited liability company (LLC), branch office, or subsidiary. The decision will be influenced by elements such as ownership, liability, and operational needs.

    Step 2: Select a Trading Name

    When choosing a name for your company, it is crucial to select one that is both distinct and suitable, in accordance with the guidelines established by the free zone authority. It is essential to verify the availability of the name and ensure that it is in line with your business operations.

    Step 3: Request a Business License

    In order to legally operate a business in Dubai, it is necessary to obtain a business license from the appropriate free zone authority. This license outlines the specific activities that your company is permitted to engage in.

    Step 4: Selecting an Office Space

    You may be required to choose an office location within the specified free zone area, depending on the regulations of the free zone. These zones typically provide a range of choices, including flexi desks, shared offices, and dedicated office spaces, to accommodate varying business requirements.

    5. Acquire Pre-approvals and Obtain the Required License.

    After finalizing the legal entity, trading name, and office space, the next step is to acquire pre-approvals from the free zone authority. This process may require the submission of essential documents, including a business plan, shareholder information, and copies of passports. Once the approvals have been obtained, the company can then be registered and the business license can be obtained, granting legal permission to operate within the selected free zone.

    To establish a free zone company in Dubai, investors must follow the procedure outlined above. Adhering to these steps is crucial in order to ensure a successful and efficient setup process within the Free Zone. The government has simplified the process to make it more investor-friendly.

    The entire procedure has been simplified and will be finished within a maximum of four weeks to facilitate the formation of a Dubai freezone company, enabling the investor to establish their own free zone company in Dubai.

    Benefits of Setting Up a Free Zone Business in Dubai

    Establishing a company in a free zone within Dubai presents numerous benefits that can greatly advantage both entrepreneurs and businesses. These advantages comprise of:

    1. Full Control over Business Ownership

    A major benefit of establishing a free zone company in Dubai is the option for complete foreign ownership. While mainland companies usually demand a local sponsor or partner, free zones allow foreign investors to have full ownership. This grants more authority and adaptability in the management of the company.

    2. Complete Repatriation of Profits

    One of the benefits of free zone businesses in the UAE is the ability to transfer profits to a foreign country without limitations. This means that these enterprises can repatriate 100% of their capital back to their country of origin without facing any obstacles.

    3. Corporate Tax at 3.9%

    According to the regulations in UAE, small businesses are exempt from paying corporate tax on their revenue if it is less than AED 375,000, while businesses earning more than AED 375,000 are subject to a 9% corporate tax. This measure aims to support and promote small businesses.

    4. Streamlined Import and Export Procedures

    One of the benefits of establishing a business in a free zone in Dubai is the simplified procedures for importing and exporting. In free zones, companies are exempt from paying customs duties on imported and exported products. Customs duties refer to taxes levied on goods as they enter or leave a country's borders.

    5. Ideal Location

    The term "strategic location" pertains to the favorable geographical placement of free zones in Dubai, usually in close proximity to seaports, airports, and national borders. The close proximity to airports enables companies to speed up the transportation of goods through air cargo, resulting in quicker delivery times and lower shipping expenses, while also improving the efficiency of their supply chain.

    6. Worldwide Interconnectivity

    Dubai boasts significant seaports and airports, facilitating local and international trade. Its strategic location allows for convenient connections with distributors and manufacturers in the MENA region and South Asia.

    7. Successful Expatriate Business Owners

    The city of Dubai is a highly sought-after transit destination, attracting a large number of tourists and investors. It is also a melting pot of different nationalities, providing opportunities to network with a diverse business community on a global scale.

    8. Scope of Business Operations

    Dubai's free zones offer a wide array of commercial opportunities, giving entrepreneurs the chance to engage in a diverse range of sectors and businesses. These free zones cater to various business activities, including trading, manufacturing, services, technology, media, healthcare, and consulting. This enables entrepreneurs to align their business pursuits with their skills and the potential of the market.

    9. Straightforward and Efficient Registration Process

    Obtaining a license is a speedy and uncomplicated process. As an investor, you can easily obtain a free zone company formation and take advantage of convenient administrative services.

    Necessary Documents for Establishing a Free Zone Company in Dubai

    Before starting a Dubai Free Zone company, the investor will be required to provide several documents that must be approved by the Gulf Cooperation Council or the Arab embassy.

  • Form for obtaining application license.
  • Personal business card.
  • Layout of business proposal.
  • Memorandum of Association (MOA) and Articles of Association (AOA).
  • Copies of passports.
  • Banking reference and license for any existing business of the partners, if needed.
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    For anyone looking to start a business in the Dubai-free zone, it is important to follow the steps mentioned above. The process is straightforward and has been simplified by the government to create a more investor-friendly environment.

    The entire process has been simplified and is expected to be completed within 4 weeks, allowing the investor to begin forming a free zone company in Dubai.

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