Freezone Lisence

Business Set up in Freezone

A Freezone allows individuals to conduct specific trading or other activities within the UAE. Businesses established within the Freezone must obtain approval and a license from the relevant authorities. The UAE grants Freezone permits based on a business’s specific activities.

Many believe that Freezone licenses were granted based on the business’s specific commercial activity. Currently, new free zone areas are under construction, indicating an upcoming increase in the total number of free zones in the coming years.

The Free Zone Authority (FZA) actively manages various aspects of a Free Zone company’s operations, including license issuance and overall functioning. Unlike mainland businesses in the UAE, Freezone businesses operate under different regulations governing commercial conduct. One notable advantage of setting up a business in the Freezone is that foreign investors have the opportunity for full ownership.

Alongside the financial advantages of complete tax exemption, 100% repatriation of profits, and repatriation tax benefits, freezone business formation offers additional benefits such as unrestricted foreign exchange transactions. Enjoy the complete ownership benefits and favorable financial advantages when establishing your business in the Freezone.

Once your company meets the eligibility criteria for operating a Freezone business, the Free Zone Authority will grant you one of the available Freezone licenses, such as Trade License, Industrial License, Service License, or National Industrial License. These licenses are subject to annual renewal as long as the lease agreement remains valid.

It is essential to choose the appropriate Free zone based on the nature of your business operations. Your business activities must align with the requirements of the selected Free zone. While offshore companies in the UAE enjoy certain advantages similar to Freezone businesses, it’s important to note that they are not precisely the same.

Business License issued in Dubai Freezone

Businesses, regardless of their size and legal structure require an approved trade license in order to conduct business inside any of the UAE Free Zones. These Freezone Licenses are issued to comprise:

Professional License – for service-oriented businesses as well as consultancies.
Industrial license – for manufacturing companies as well as export and import companies.
General Trading License – the investor is able to use this General Trading license to trade various categories of commodities and goods.
Warehousing License – the investor can obtain this license in order to fulfill the different requirements for warehousing, such as storage and distribution.

Free zone businesses are permitted to carry out business transactions within the boundaries of the Free zone as well as overseas. There are some restrictions on how they can make business transactions within Dubai mainland. Companies in the free zone that have commercial licenses should employ an agent to conduct local or mainland operations.

We will guide you through the complete Freezone Company Formation procedures. We are a registered business setup company in Dubai serving our clients for a long period. Contact our consultants to receive assistance.

Exploring Dubai's Free Zones: Benefits and Drawbacks for Entrepreneurs and Investors

Dubai stands out as a recognized hub for entrepreneurs and investors worldwide, partly due to the presence of free zones. These designated areas offer many benefits, including relief from various taxes and incentives, designed to attract foreign direct investment (FDI). Independent governmental or non-governmental free zone authorities and entities oversee the operations of these zones.

Our blog aims to introduce you to the concept of free zone authority in Dubai. We will discuss how they operate, as well as their advantages for companies seeking to establish their presence in Dubai.

Our discussion will feature different free zone authorities available in Dubai, such as Dubai Multi Commodities Centre, Dubai Silicon Oasis, Dubai Media City, Dubai World Trade Centre, and Meydan Free Zone.

Whether your business is an e-commerce enterprise or a startup, Dubai’s free zones may be the ideal location for setting up your company. So join us in this post as we equip you with all the information you require to make informed decisions about free zones authority in Dubai, including their features and how they could enhance your business.

Photo by Nick Fewings on Unsplash

Free Zone Authority (FZA), What You Need to Know

A Free Zone Authority (FZA) is a regulatory body that operates independently to oversee and manage each free zone within Dubai. The primary responsibilities of the FZA involve the issuance of operating licenses and providing guidance and support to companies desiring to establish their businesses within the free zone.

Dubai’s free zones are designated areas that offer various financial and economic benefits, including favorable tax policies, which aim to attract foreign direct investment (FDI) into the country.

These free zones are typically situated around major seaports, international airports, and national frontiers, which provide them with several geographic advantages for trade. The taxation policies and customs duties applicable within free zones are determined by the country, while the World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures (SCM) provides information on the conditions and benefits of free zones.

To cater to specific industries or business types, several free zone authorities (FZA) exist, such as Dubai Healthcare City for healthcare-based industries and Dubai Media City for media and advertising companies. Free zones help to promote economic integration between the city and emirate regions and operate under the governance of the International Free Zone Authority (IFZA).

Furthermore, companies outside of the free zone can access and collaborate with international firms. The tax benefits provided within free trade zones are substantial, including 0% tax rates, preferential customs duty rates, and complete import and export tax exemption.

Advantages of Free Zone Companies in Dubai

Free zones in Dubai offer tax benefits, with zero corporate and personal tax rates, in addition to customs tax exemption. This makes it an attractive option for businesses looking to save on taxes.

Another significant advantage is that free zones in Dubai allow for hassle-free 100% foreign ownership of businesses, which is not possible on the mainland. Additionally, companies in free zones can repatriate all their capital and profits without any restrictions.

Furthermore, free zones in Dubai offer an established ecosystem of businesses, making networking and collaboration with other businesses in the same industry much easier. Dubai’s strategic location also provides easy access to large and growing markets in the Middle East, Africa, and Asia.

In addition to these advantages, each free zone in Dubai offers distinct benefits to businesses within them, including incentives regarding company costs and infrastructure. Dubai has over 45 free zones, covering various sectors, from healthcare to commodities trading and tech.

Choosing a free zone for your company formation in Dubai opens doors to a different world of benefits that you would fall for. So, set up your business in Dubai’s free zone to avail numerous tax reliefs, ease of doing business, and 100% foreign ownership.

Disadvantages of Free Zone Companies in Dubai

Establishing a business in a free zone in Dubai can provide several benefits, but it is crucial to consider the drawbacks as well. Here, you can discover the disadvantages that enterprises should keep in mind before setting up a free zone company in Dubai.

One primary disadvantage of free zone companies in Dubai is their limited market access. These businesses can only operate within the free zone and must have a local distributor or agent to trade with the mainland. This can restrict the opportunities for expanding their business in the country and engaging with a wider customer base.

Free zone offices in Dubai offer standardized space, which may not be sufficient for businesses looking to accommodate more employees. Upgrading office space in the free zone can be expensive and an added cost for enterprises. Additionally, free zone companies have limited visa options, making it challenging for them to hire a large number of employees.

Furthermore, free zones in Dubai cater to specific industries. Businesses outside of these industries may not be able to operate in the free zone, limiting their options for expansion or diversification. Lastly, free zone companies may not receive the same level of government support as companies operating on the mainland.

Dubai Free Zone List Guide

Dubai is home to an expansive network of free zones, with each offering a unique set of benefits and advantages. For those wondering how many are in Dubai, here we provide an overview of some of the most popular and well-regarded free zones in the region.

Photo by Piotr Chrobot on Unsplash

Dubai Multi Commodities Centre (DMCC)

One such free zone is the Dubai Multi Commodities Centre (DMCC), which is not only the largest but also the fastest-growing free zone in Dubai. With over 18,000 registered companies, DMCC is a leading hub for commodities trading and offers state-of-the-art infrastructure and facilities.

Dubai Silicon Oasis (DSO)

Another free zone that might be of interest to businesses in the technology industry is the Dubai Silicon Oasis (DSO). Dedicated exclusively to technology, DSO offers a range of benefits to companies seeking to establish their presence in the region. These benefits include 100% foreign ownership, tax exemptions, and access to world-class facilities.

Dubai Media City (DMC)

Dubai Media City (DMC) serves as a specialized free zone for the media and advertising industry in the UAE. It provides its businesses with access to world-class facilities, tax exemptions, and the opportunity for 100% foreign ownership.

Meydan Free Zone

Located at the heart of Dubai, the Meydan Free Zone is a contemporary economic free zone. Companies that want to set up in the Meydan Free Zone can benefit from affordable business setup, flexibility, strategic location, and innovative solutions making it an excellent choice for entrepreneurs.

International Free Zone Authority Dubai (IFZA)

International Free Zone Authority Dubai (IFZA), a Dubai-based free zone community, provides a range of business licenses and setup solutions for small to medium-sized enterprises (SMEs). Its safe and business-friendly legal framework, vast network of world-class authorized partners, and expert multinational team assist businesses with their activities.

Additionally, IFZA offers corporate training, corporate banking assistance, health insurance coverage, commercial real estate, office design, and other services. The free zone community, located in Dubai Silicon Oasis, has ultra-modern high-tech offices and warehouses for leasing, making it a unique free zone in the UAE with multi-year license packages and a broad range of business activities. With cost-effective fees and transparent procedures for investors, IFZA is a highly competitive free zone for Dubai free zone company formation.

How to Set Up a Business in Dubai Free Zone Location?

Now that you have a better understanding of the Free Zone Authority (FZA), it’s time to discover more about expanding your business to Dubai. Here is a step-by-step guide on how you can set up your business in Dubai free zone locations:

Choose a Business Activity

The first step in setting up a business in a Dubai-free zone is to choose the business activity you wish to carry out. Your choice of business activity will impact where you can register your company. Make sure to choose a business activity that is permitted within the free zone you plan to operate in.

Find a Free Zone

Once you have decided on the business activity, the next step is to find a free zone in the UAE that caters to your industry. Dubai has over 40 free zones, each with its unique benefits and advantages. Research and choose a free zone that is best suited for your business needs.

Choose a Company Name

Choose a unique name for your company that is not already taken by another business in the free zone. Keep in mind that Free Zone Authority (FZA) has strict business naming guidelines that you must comply with. The name of your company must not include any offensive or inappropriate words.

Apply for a Business License

Apply for a business license from the Free Zone Authority (FZA). The process is a breeze and you can complete it online. The free zones offer a variety of business license options, including commercial, industrial, and service licenses.

Obtain Your UAE Residence Visa

Once you have received your business license, you can apply for a UAE Residence Visa. This will allow you to live and work in Dubai. The visa application process requires you to undergo medical exams and obtain police clearance certificates, among other requirements.

Open a Corporate Bank Account

Open a corporate bank account in the UAE to manage your business finances. Dubai boasts an extensive banking network, making it easy and convenient to open a corporate bank account.

Start Your Business

Once you have completed the above steps, you are ready to start your business in the Dubai-free zone. You can now rent office space, hire employees, and start operating your business.

Required Documents to Register a Company in Free Zone Authority (FZA)

When registering a company in a Free Zone Authority (FZA), the exact set of required documents may vary depending on factors such as the type of company and the specific FZA. However, we have compiled a generalized list of documents that may be necessary:

Firstly, an application form may be required for the registration process. Secondly, a Letter of Intent may also be requested from the company. If available, an existing company brochure may be helpful as well. Furthermore, for FZE/FZC, it may be necessary to provide annual financial statements.

In addition, for identification purposes, the passport copy of the shareholder(s) and manager(s) is required. Along with the passport copy, the latest UAE entry stamp/visit visa copy/residence visa copy is also required.

Memorandum and Articles of Association (for FZE) may be a requirement. In addition, the Certificate of Incorporation/Registration of the company (notarized) can be included as a requirement.

Proof of creditworthiness of the company may be required, in the form of an original bank reference letter addressed specifically to the FZA. As well, a Letter of Appointment for the Manager with his specimen signature (notarized) along with his passport copy and Power of Attorney may be requested.

Lastly, documentation of the company’s leasing agreements and personal secondment agreements may also be requested.

It is essential to highlight that procedures and documentation requirements can vary from one FZA to another. Therefore, it is highly recommended to consult with the relevant authorities or seek professional assistance to ensure all necessary prerequisites are submitted.

Final Words

The establishment of Free Zone Authorities (FZAs) has played a crucial role in facilitating economic growth and development around the world. Since their inception, these zones have provided an ideal environment for foreign investors to set up their businesses and take advantage of a range of benefits, including tax holidays, exemption from customs duties, streamlined bureaucracy, and modern infrastructure.

The Free Zone Authority (FZA) model has become so successful that many places around the world, including Qatar, have started employing it, setting up their free zones with the hope of attracting foreign investors and boosting their economies.

With specialized zones for different sectors, such as technology, manufacturing, and tourism, FZAs have evolved into versatile tools for economic development, catering to the specific needs of the investors and providing them with the resources they require.

One of the most significant advantages of FZAs is that they allow countries to diversify their economies by promoting the growth of existing industries and encouraging new ones to emerge. This, in turn, leads to the creation of more job opportunities for the local population, leveling up the standard of living in the region and contributing to poverty alleviation.

Explore endless opportunities and experience a world of unparalleled innovation in Free Zone Dubai! Don’t miss out on this unique opportunity to grow your business and take it to new heights. Sign up now for a free consultation and let us help you start your journey towards success!