The idea behind the creation of “free zones” globally was to build a model which encourages economic activity i.e. provision of key benefits so that entrepreneurs and multinational firms establish and freely conduct their business in free zone. Dubai free zones are the most favorable locations in the Middle East for international operations as they offer complete ownership to a foreign investor, zero taxation and customs privileges.
Unlike mainland’s heavy constitution and operating requirements for businesses such as appointment of UAE national local sponsor – Dubai free zones’ policies and timeframe for new business setup is way lighter and quicker as documentation work and administrative requirements are minimal and there is no need to appoint local service agent to obtain license.
The company setup in the free zone areas is not subject to UAE Commercial Companies Law. Dubai Free Zone Companies are considered to be outside the jurisdiction of UAE, and are operated under the rules and regulations of respective free zone authority.
Registering a Dubai Free Zone company is pretty straightforward and usually takes 3 weeks to incorporate. After deciding on the preferred free zone, one would need to:
- Reserve the company name
- Rent office premises
- Arrange for the deeds of establishment and the articles of association
- Get a corporate bank account opened, and inject the minimum paid-up share capital to receive the bank statement confirmation
- Allocate budget for the translation and notarization costs of due diligence
- Secure the appropriate business license, granted by the relevant Free Zone Authority
Free zones offer the most fertile ground for setting up businesses, equipped with state-of-the-art infrastructure, duty and tax exemptions, world-class business amenities, flexible government policies, and unmatched facilities. The benefits of setting up your business in Dubai Free Zone are:
- 100% tax exemption on personal or corporate income or gains
- 100% ownership for investors regardless of their nationality and domicile
- 100% repatriation of capital and profits
- Exclusion from all import and export duties
- Exemption from corporate tax for 15 years, with an additional renewal option for 15 years
- No capital deposit required
However, there may be certain limitations in setting up a company in Dubai Free Zone.
- Prerequisite of renting office premises within the chosen free zone
- Being unable to conduct business or engage in business activities with clients or suppliers in Dubai mainland
- High translation and notarization costs
There are more than 30 free zones in Dubai. Therefore, when you set up a company in a Dubai free zone, you must be aware of the attributes and advantages of each one. For example, if your company will be providing IT services, you should consider the Dubai Media City or Internet City zone, or for a trading company, Dubai Multi Commodities Centre would be equally conducive. Jebel Ali Free Zone is appropriate for a shipping company or when one needs access to airports and seaports.