Benefits of Free Zone Company in Dubai
Dubai has always led by example when it comes to setting standards in the economic market. The zero tax policy and easy-to-navigate rules and regulations, set global benchmarks for online and offline businesses, be it LLC or Import/Export Business. Therefore, it is evident that the UAE came up with the concept of free zones to regulate a higher amount of business reaching the mainland via a free zone business setup in Dubai. The best part is that there are countless benefits of a free zone company in Dubai when you choose the right structure and jurisdiction.
In fact, there has never been a better time for free zone company formation in Dubai. Over the years, the UAE has established itself as a hub for entrepreneurs to excel in the world of business. The UAE is now one of the top countries for business set up worldwide.
Furthermore, the UAE has hit various milestones over the years. The IMD World Competitiveness Ranking 2021 ranks the UAE as the 9th most competitive economy in the world. Additionally, it also ranks 6th in Europe, Middle East and North Africa regions. Not to mention, UAE is one of the first countries to have bounced back since the onset of the pandemic.
In addition, the country has gone through great lengths to adopt innovative methods to keep up with the ever-evolving industry of business and become a premier business hub itself. Furthermore, the UAE has set up free zones specifically to accommodate foreign investors by providing them with various free zone benefits for business setup.
Let’s move ahead and get to know the concept of owning businesses in the free zone areas of Dubai better, the advantages of free zone business as well as the information on the Dubai free zone license cost, for those interested in setting up a business in one of the most profitable markets in the world, i.e., Dubai.
This blog will enlighten you on everything you need to know about the benefits of a free zone company in Dubai.
What is a free zone?
Free zones are geographic areas within the UAE where goods, services and commodities are traded without the intervention of strict customs regulations. The objective of these special economic zones is to benefit expatriate investors in the UAE. These free zones provide 100% ownership to foreign investors, thus boosting international businesses. Additionally, free zone company formation costs are highly affordable and this is among the most popular Dubai free zone benefits.
Jebel Ali Free Zone (JAFZA) is the first free zone to be established in the UAE in 1985. This free zone has been one of the key players in boosting the country’s economy and is, therefore, the flagship free zone of Dubai Ports (DP) World. It is strategically located near the 7th largest container port named Jebel Ali Sea Port. This makes it the ideal free zone for import and export of goods.
Most free zones generally deal with trading, service and industrial sectors. However, there are free zones in the UAE that are similar to JAFZA and cater to specialized industries or sectors. Some such jurisdictions include:
- Dubai Healthcare City (DHCC) for health and wellness industry
- Dubai Internet City (DIC) for tech industry
- Sharjah Publishing City (SPC) for printing and publishing industry
- Dubai Multi Commodities Center (DMCC) for trade and commerce industry
- Dubai CommerCity for e-commerce industry
- Fujairah Creative City for creative industry
- Dubai International Academic City for education industry
- Dubai Outsource City for outsource and shared services industry
Currently, there are about 45 free zones in the UAE. Free zones are also home to over 150,000 companies around the country. As time progresses, this number is on the rise with the UAE introducing new free zones almost every year.
Free zones in the UAE and Dubai are governed by a special framework of rules and regulations which are applicable to a concerned free zone. The respective free zone authority manages and regulations various free zone operations in Dubai. These jurisdictions also operate outside the federal laws and regulations of the Ministry of Labor.
Free zones in the UAE are usually attached to a port. Free zones are also ideal for freelancers looking to venture into the world of business but do not want to settle with a single company.
Benefits of company formation in Dubai free zone
First and foremost, free zones in Dubai are basically geographic areas within a country. In these areas goods, services, and commodities can be traded without the intervention of stringent custom regulations. For most of the free zone business setup in Dubai, companies are taxed minimally or sometimes even fully exempted.
This encourages economic activity and a higher rate of doing profitable business without worrying about taxes and capital revenue to be paid to the administrations. Each free zone in Dubai Mainland is an autonomous entity with its own free zone authority. This authority governs, handles registration, and issues licenses within the premises of that free zone.
The free zone business setup in Dubai was intended to act as international business hubs for companies conducting businesses outside the UAE since they were not initially licensed to operate within the rest of the UAE. Although during the initial phase, most of the free zone companies were involved in import and re-export, though now most of the companies run business within the UAE and GCC through local distributors and traders.
Free zone business setup in Dubai offers the most fertile ground for setting up industries equipped with state-of-the-art infrastructure, duty, and tax exemptions, commendable business opportunities coupled with flexible government policies, and facilities that make the experience of running a business look seamless.
To summarize, business investors enjoy the following free zone benefits:
- Full foreign ownership of business: Free zones permit foreign investors to get 100% ownership of their business.
- Full profit repatriation: Free zone companies can repatriate all their profits to their home country. This gives them the freedom to transfer 100% of their capital to their country of origin without any requirements.
- 0% corporate tax: The UAE law states that companies that set up a business in the UAE do not require to pay corporate tax out of their business revenue, thereby enabling you to keep all your profits.
- 0% import or export tax: Unlike the mainland, free zones are exempt from all customs duties.
- Strategic location: Dubai has world-class telecommunication, trailblazing financial intercessions, ultramodern industrial infrastructure, e-governance system, and service sectors. The location of the free zones makes for a highly cost-effective living.
- Global Connectivity: Dubai has a multi-national community and provides opportunities for you to connect with a global business community.
- Range of business activities: Free zones give you the freedom to undertake a range of business activities.
- Time-efficient process: The entire process of obtaining a license is fairly swift and easy.
- Convenient Registration: Dubai gives you the ability to register from the comfort of your home. You can send all the required documents to the free zone without being physically present for submission.
- No Currency Restrictions: One of the critical benefits of a free zone company in Dubai is no restriction on the currency. Currency rules are government-imposed limits on the exchange of foreign currencies. In UAE free zones, there are no currency restrictions of any type. Therefore, this facilitates hassle-free financial transactions.
- No logistical Issues: Free zones in the UAE have several warehouses and sufficient office space. Free zones in the United Arab Emirates are great for SMEs and start-ups. In addition, the procedures for forming a company in a free zone are easy and straightforward. In comparison to other countries, you can complete the licensing procedures in a quick time. Moreover, the immigration facilities associated with UAE-free zones are efficient, saving time.
Various company structures in the UAE:
- Free Zone Establishment (FZE)- Single shareholder
- Free Zone Company (FZC)- Two or more shareholders
- Branch of a foreign company
- Limited Liability Company (LLC)
The various milestones of the UAE economy:
How Much Does it Cost to Set Up a Free Zone Company in Dubai?
One of the most salient features is that one can set up a business in return for an extremely low cost in the Dubai free zone. And, while the registration fees are relatively low, the cumulative value will not cross over AED 30,000 even once all the other expenses are added in.
The cost of the license in the Dubai free zone for attaining trading licenses ranges from AED 10,000 to AED 20,000 per annum. This is based on the number of activities or services that one wishes to enlist within its business model.
Thus, these figures are subject to change and are only a tool to showcase the minimal cost of doing business in a Dubai free zone. Furthermore, these numbers encourage businessmen to set up business in the Dubai free zone. You can leave the headache of handling license costs and attaining them to the business professionals at Shuraa!
Paperwork Required for Company Formation in the UAE Free Zone
You must submit the documents mentioned below to set up a free zone company in the UAE without violating any compliance or legal norms:
- Trade name reservation document
- Colored photographs of the applicant
- NOC from the local service agent
- Registration certificate and contract of association
- Passport copies of all business partners
- Business plan and personal information sheet
- Lease agreement document
- External approvals based on your business’s nature and legal structure
Connect with Shuraa Business Setup
Free zone company setup is without a doubt one of the best decisions an entrepreneur can make. This is because UAE free zones offer several benefits to entrepreneurs looking to venture into the world of business in the country. In addition, the benefits of a free zone company in Dubai overshow a few limitations.
There are many agencies that are working hard day and night to provide the most dependable local sponsors that align perfectly with the goals and ambitions of the company. The best agency in Dubai is Shuraa Business Setup.
Shuraa is one of the leading business setup companies in the UAE. For over 20 years we have been helping entrepreneurs form and maintain their businesses in the country. We assure you that the entire process of your company setup runs smoothly. Our expert consultants will guide you through the entire process from registering your business, understanding free zone license cost, all the way to the process of obtaining approvals from the authorities.
Contact our expert consultants to learn more about free zone company formation in Dubai or the rest of the UAE. Call us at +97144081900 or send a WhatsApp message on +971507775554. Additionally, you can also drop in an email at [email protected] and get your queries answered in no time.