Freezone Company Setup
Freezone Company Setup – Free zones in UAE are a boon for foreign entrepreneurs/investors. These are economic areas developed to boost international businesses. Foreign companies have the privilege to retain complete ownership and are not liable to pay any tax or customs duty.
At present, there are 45 free zones located in different parts of the UAE. These zones are industry-specific and do not promote only one sector. For example, Dubai Healthcare City serves those in the healthcare industry, while Jebel Ali free zone is directly linked to the largest port in the region and favored by those in the import-export trade.
You should select a free zone according to the nature of your business. Licenses, legislation, capital requisites and so on are specific to a free zone. Besides, free zones in the UAE have always proved to be beneficial for foreign investors.
Why establish your venture in a free zone?
Zero tax and custom duty
- As mentioned above, foreign companies within free zones are not subjected to any tax or customs duty i.e. 0% corporate and personal tax, no import or export tax, plus exemption from VAT, currently at 5%.
Fast and easy setup
- The process of organizing a business in a free zone is straightforward. Hence will not take more than 15 days for the complete establishment. But, the process differs according to your business activity. Most of the free zones ask for a few elementary documents, such as passport copies and business paperwork. Free zones do offer various desk and virtual packages with the liberty to access addresses and other facilities in an ad-hoc manner.
- Non-native entrepreneurs desiring to set up a business in mainland UAE should enter a partnership with natives. But, foreign ventures in free zones are free from these obligations and have the authority to hold 100% ownership.
Easy logistics and trading within the UAE
- There are restrictions for a free zone company to trade within the UAE market. But, you can resolve this by working with a local distributor for a fee who will dispense the goods into the market. Another way would be setting up branches of your business across the UAE at a later date. These branches will help in marketing the goods within the UAE mainland.
Excellent support and assistance
- Apart from tax exemption, free zones offer excellent aid in business setup and beyond.
- Free zones provide complete aid with the banking process and also recommend the best banks for your business. These zones also support you with the visa process for both shareholders and any applicable dependents. Besides, free zones also offer business advice and networking services for an ongoing business. You can always rely on free zones to access startup hubs and growth initiatives for the smooth functioning of your business.
- Free zones are well known for their privacy standards. Company information such as ownership, shareholder’s details, and other classified information is never made public.
The nature of business plays a significant role in selecting a free zone. Some principle free zones and their licence activities include
- Jebel Ali Free Zone (JAFZA) – Logistics, trade, storage unit, production houses;
- Dubai Healthcare City (DHCC) – Healthcare, medical education, pharmaceuticals, medical equipment;
- Dubai International Finance Centre (DIFC) – Financial services, Banking;
- Dubai Knowledge Park (DKP) – Human resource management, training, and development;
- Dubai World Central (DWC) – Aviation, Ancillary services, logistics, light industry;
- Dubai Internet City (DIC) – Internet, communication technology;
- Dubai Silicon Oasis (DSO) – Telecom, information technology, electronic engineering;
- Fujairah Creative City (FCC) – Media, communication, consulting, technology;
- Ajman Free Zone (AFZA) – Trading, e-commerce, offshore, industry;
Free zone corporate entities are of two types
- Free zone establishment (FZE)
- Free Zone Company (FZC)
Both entities operate the same but differ in the number of shareholders. ‘Establishment’ has room for a single shareholder, whereas ‘Company’ should have at least two shareholders. To be specific, FZC is a limited liability company.
Please get in touch with our Consultants at “Hallmark International” for more info.