UAE Free Zones

What is the significance of having a UAE free zones firm, and what does it represent?

A free zone is a geographical territory or jurisdiction in the UAE that allows for the conduct of a specific trade activity or group of activities. The UAE has free zones in Dubai, Abu Dhabi, Sharjah, Fujairah, Ajman, Ras al-Khaimah, and Umm al-Quwain. An economic area governed by its own unique regulations that do not apply to firms outside the zone is known as a free trade zone or free zone authority. Free zone businesses use unique tax and foreign ownership regulations to trade goods and services.

One of the steps the government took to diversify the economy and draw in more international investors to Dubai and the UAE overall was the establishment of free trade zones, which enabled them to launch a firm within a developing entrepreneurial ecosystem and increase their earnings.

Founded in 1985, Jebel Ali Free Zone is the first free zone in the United Arab Emirates. There are currently around 43 free zones spread throughout the United Arab Emirates.

It is important to understand the differences between setting up a business in UAE’s Mainland and Free Zones before choosing which kind of business to establish. There are differences in ownership, number of visa, workspace differences, Business Scope, business setup and more.

Advantages Of Building A Freezone Company In UAE

Tax Benefits That Freezones Offer

In the UAE, free zones are popular because they provide tax incentives to all businesses who operate within them. Personal and corporate income taxes are among those that free zone companies and corporations are protected from. In some situations, organizations could be spared from other applicable taxes, such as VAT. If you need more accurate information, Business Setup Consultants can give you with the help you require.

Fee Relief On Imports And Exports

When you establish a freezone company in the UAE, you can benefit from both tax and import/export duty discounts. All free zones in the country offer this benefit, allowing companies to grow significantly while remaining stable.

Optimal Sites And Excellent Infrastructure

The United Arab Emirates’ free zones are strategically located to provide world-class facilities, including office spaces and warehouses, which are essential for enterprises to flourish.

Quick Access To National And International Markets

Free zones in the United Arab Emirates give businesses unrestricted trading options with both global and regional markets, enabling them to grow and expand their reach.

No Need Of Offices

Free zone enterprises can operate virtually without the need for physical office space, which is good news for those who want to take advantage of the UAE’s competitive advantages but think that renting office space will be a barrier.

Return Of Profits And Capital

All enterprises operating in any of the UAE’s free zones will be eligible for full return advantages. Of course, it includes profits and financial assets, which benefits all organizations and businesses. In other words, by establishing a freezone firm in the UAE, you can transfer your income back to your own country.

No Currency Restrictions

If you are a foreign professional choosing to launch your business in a free zone, you won’t be impacted by currency issues. All enterprises operating in the United Arab Emirates’ free zones are permitted to transact in any currency.

Straightforward Immigration Procedure

You will most likely need to finish the immigration procedure in order to establish a freezone business in the United Arab Emirates. Business Setup consultants on your side can make the process even simpler. You’ll be able to finish this crucial procedure quickly with our assistance. You’ll be able to save time and effort in this way as well.

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Types Of UAE Free Zone Trade Licence

On the UAE free zone, businesses can be divided into four main licences depending on their activity type: General Trading, Commercial,
Industrial and Service. Below is a general look at each licence type.

General Trading Licence

A general trading licence in the UAE allows a company to sell, distribute, store, import, export, and re-export various goods under one licence. It covers a wide range of activities such as trading in foodstuff, furniture, electronics, and more. The licence provides flexibility within the Freezone as it permits a broad scope of commercial activities without tying down the company to specific lines of goods. However, specific activities may require a No Objection Certificate (NOC) for special approvals.

Commercial Licence

A commercial licence is necessary for companies selling products or services within the UAE and abroad. Any entrepreneur conducting economic activities in Dubai needs to apply for a commercial licence. This licence permits the purchase and sale of products and specified services. It allows for importing and selling items in the UAE, exporting them outside the country, or trading within the local market within the Freezone.

Industrial Licence

An industrial licence in the UAE is provided by a free zone’s authority and allows investors and entrepreneurs to manufacture products within the relevant free zone jurisdiction. The licence enables the import of raw materials for production and the export of finished products overseas. Businesses involved in industrial or manufacturing processes should apply for this permit, which covers importing raw materials, production, and packaging for export.

Service Licence

The service licence permits the licensee to carry out specified services within the Free Zone, such as logistics, courier services, insurance provision, travel and tour services, car rental, consulting, and staffing. Additionally, it allows accounting, legal, and business consulting organizations to operate. This licence is meant for professionals in various fields who provide specialized services, including business consulting, IT services, accounting, auditing, legal services, and other professional services.

Dubai Free Zones

Businesses in the Dubai Free Zone trade goods and services while taking benefits of unique tax and foreign ownership regulations.

UAE Free Zone

Abu Dhabi Free Zone

Ajman Free Zone

Sharjah Free Zone

Legal Forms For Company Formation In UAE Free Zones

The legal forms available for company registration in UAE free zones have been modified to meet the needs of different business kinds and investment levels. Below is a summary of the main corporate organizations and applicable legal frameworks found in UAE’s free zones:

Free Zone Establishment (FZE)

A Free Zone Establishment (FZE) registration allows for a single shareholder to form a company. This shareholder can be an individual (person) or a corporate shareholder.

FZCO (Free Zone Company) ( FZ- LLC)

An FZCO is essentially a multiple shareholder or a partnership freezone firm where there is more than one shareholder in the company with a maximum of 50 shareholders.

Branch of a Foreign Company

A branch is a separate legal entity , under the control of the parent foreign company . It is used in the UAE as a marketing tool for the parent company.

Branch of a UAE Company

A branch office setup is a separate office or branch of an existing company. The local company already has a license in the UAE. Hence, this is an expansion of the local business.

Can Free Zone Companies Do Business In Dubai Mainland?

Usually, companies in free zones cannot do business directly in the Mainland. This rule mostly affects businesses that sell to consumers (B2C). However, businesses that sell to other businesses (B2B) in free zones can operate in the Mainland without restrictions.

If a free zone company wants to do business in the Mainland, it needs to get specific licenses and documents from the Department of Economic Development (DED). Another option for these companies is to work with a DED-licensed distributor to operate in the Mainland. Additionally, free zone companies can do business in the Mainland by forming a civil company, a limited liability company (LLC), or by setting up a branch office.

Standard Required Documents to Start the Business Setup Process In UAE Mainlands

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Your Guide To Setting Up A Business In UAE Mainlands

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We Al Moheet Consultants will assist you in mainland company formation in Dubai from A to Z without any hassles and provide you post launch assistance for your visas and all corporate services that you might need in the future.

Frequently Asked Questions

Common Questions About Business Setup in the UAE Free Zones

Questions Common Questions About Business Setup in the UAE Free Zones How do I choose the right free zone for my business in the UAE?

To choose the right free zone for your business in the UAE, consider the following factors:

Business Activity: Different free zones specialize in various industries. Ensure the free zone you choose aligns with your business activities.
Location: Proximity to clients, suppliers, and transportation hubs can be crucial.
Cost: Compare the setup and operational costs across different free zones.
Facilities and Infrastructure: Look for free zones that offer the necessary facilities and infrastructure for your business.
Visa and Staffing Requirements: Consider the number of visas you need and any specific staffing requirements.
Reputation and Services: Research the reputation of the free zone and the support services they offer, such as legal, administrative, and networking support.

What is the difference between a free zone company and a Mainland company in the UAE?

Scope of Business: Free zone companies are generally restricted to operating within the free zone and internationally. They cannot directly conduct business in the UAE Mainland without a local distributor or agent. Mainland companies can operate anywhere in the UAE.
Office Requirements: Free zone companies must lease or buy office space within the free zone, while Mainland companies have more flexibility in choosing office locations.
Setup Process: The setup process and regulations differ, with free zones often providing faster and more streamlined processes compared to Mainland.
Tax Benefits: Free zone companies usually enjoy tax exemptions, such as no corporate or income taxes, while Mainland companies are subject to UAE tax laws.

Is it possible to relocate an existing business to a UAE free zone?

Yes, it is possible to relocate an existing business to a UAE free zone. The process typically involves:

Canceling the Current License: If the business is already registered in the UAE, you may need to cancel the existing license.
Obtaining Approvals: Secure necessary approvals from relevant authorities.
Registering in the Free Zone: Complete the registration process in the chosen free zone, including submitting the required documents and paying the necessary fees.
Transferring Assets and Employees: Coordinate the transfer of business assets and employees to the new free zone location.
Updating Contracts and Agreements: Update any contracts, agreements, and banking arrangements to reflect the new business location.

UAE FREE ZONES