The United Arab Emirates (UAE) is home to multiple businesses and offers exceptional benefits and opportunities to individuals and corporations planning to kick-off their businesses in the region. The UAE also offers a variety of jurisdictions to select from for their businesses.
This includes 50+ free zones to choose from. Each free zone provides different benefits, facilities, and activities to choose from and shares capital requirements while offering various packages based on the needs of the business. Business-friendly policies coupled with reduced import-export restrictions, bureaucratic requirements, taxes and more, make free zones in the UAE an attractive hub for foreign investors.
What Makes Dubai Free Zones Particularly Attractive for Business Setup?
Dubai has been serving as a solid proposition for businesses by providing a pro-business regulatory environment, a robust legal structure, and strong corporate governance.
The location of a business plays a vital role during the incorporation of a business and is likely to impact the trajectory of your business’s growth and reputation. All Dubai free zones are strategically located based on the industry they aim to serve, such as Jebel Ali Free Zone Authority (JAFZA), which is located within Jebel Ali Port, which is one of the largest ports in the region, making it an optimum choice for companies offering logistics, industrial, e-commerce, and other services.
Moreover, the rules governing the Emirate offer several benefits, such as a 100% foreign ownership model, exceptional infrastructure, simplified regulatory procedures, favourable tax policies, and a seamless establishment structure.
What’s more?
1. Dubai free zones account for US$145 billion.
2. Dubai’s free zones attract 56% of the world’s Fortune 500 companies.
What Are The Benefits Of Registering A Company In One Of The Dubai Free Zones?
The advantages of setting up your business in the Dubai free zone include, but are not limited to:
1. Tax exemptions: Where the taxable person constitutes a qualifying free zone person (QFZP), its qualifying income is subject to a reduced CT rate of zero percent instead of the usual nine percent.
2. 100% ownership: Dubai free zones offer 100% control to foreign investors without the need for a local sponsor.
3. Ease of importing and exporting: Dubai free zones experience smooth and seamless import-export procedures and planning. Free zones are also exempt from all customs duties, unlike the other jurisdictions, making it cost-efficient for businesses.
4. List of activities: Each Dubai free zone caters to specific industries and targets specific activities. It is more likely for a business to find the activities that match the company’s needs and requirements, instead of later finding out that the specific activity your business tends to offer is not included in your license.
5. Corporate bank account opening: Setting up a business in Dubai minimises certain potential risks, such as facing challenges with corporate bank account opening. Banking regulatory requirements and rules have become more stringent, and it is becoming difficult for more companies to open their corporate bank accounts.
Types of Business Entities in the Dubai Free Zone
Dubai free zones offer several types of legal structures to choose from, each catering to different regulatory requirements, ownership, and operational needs. The common types of entities in Dubai’s free zones include:
1. Free Zone Company (FZCO): FZCO usually exists and operates within a specific free zone. This type can have multiple shareholders, either individuals or corporate entities. The company shareholders can decide the percentage of ownership for each partner.
Advantages: It allows shared ownership, making it suitable for businesses with multiple stakeholders. Offers flexibility in decision-making and management.
2. Free Zone Establishment (FZE): The FZE structure allows for a single shareholder, individual or corporate, to own the business in a specific free zone.
Advantages: It is suitable for sole proprietors or single-owned businesses as it offers a simple ownership structure. It offers a smooth decision-making process.
3. Branch of a Foreign Company: A branch of a foreign company is an extension of the parent company and allows the company to have a presence in the UAE. A branch of a foreign company is established with the help of a local service agent (LSA) through the governing authority, the Ministry of Economy.
Advantages: It enables international companies to tap into the UAE market. Offers a smooth setup process with a seamless parent-subsidiary association.
4. Free Zone Company (Branch): This structure enables an existing free zone company to set up a branch in the same or another free zone in the UAE.
Advantages: It enables the company to explore different free zones in the UAE that might be more beneficial in terms of location and other factors, while leveraging existing structures and benefits.
5. Free Zone Establishment (Branch): This structure enables an existing free zone establishment in a specific free zone to establish the company in the same or another free zone in the UAE while leveraging existing structures and benefits.
Advantages: It enables the company to explore different free zones in the UAE that might be more beneficial in terms of location and other factors, while leveraging existing structures and benefits.
Before selecting the legal structure, a company opts for, it is essential to carefully assess their requirements, business needs, nature of business, number of stakeholders, desired level of control, target audience, and other factors. Thus, seek professional advice from corporate and legal experts like Gatestone Group to make a well-informed decision.
Documents You Need to Submit To Register For A Dubai Free Zone
To register your company, you must present all relevant documents required to receive corporate, legal, and financial services.
For applications with individual shareholders, the following are required:
1. Passport copy
2. Digital passport photo
3. Application form with Ultimate Beneficiary Owner (UBO) information (provided by the free zone)
4. Emirates ID and visa copy if the individual is a UAE resident
5. Business plan
6. 2 years audited financial reports for a corporate entity or a certificate of reference from a personal bank of the individual shareholder
7. Related third-party approvals, if required
Additional documents for applications with corporate shareholders:
1. Passport copy and passport photo of every shareholder and general manager of the corporate shareholder
2. Emirates ID and visa copy of every shareholder who is a UAE resident
3. Board resolution
4. Memorandum and articles of association of the corporate shareholder (or its equivalent)
5. A valid trade license (or its equivalent)
6. Certificate of incorporation or formation of the corporate shareholder
The corporate documents should be attested from the UAE embassy in the country of origin, and ministry of foreign affairs in Dubai.
Conclusion
As you prepare to embark on this journey, remember that choosing the right structure and business entity is paramount. Whether you are envisioning a tech startup, a trading company, or a service-oriented venture, Dubai free zones offer a conducive environment for success. For personalised assistance and guidance tailored to your specific needs, our expert team is ready to support you. Contact us for expert guidance and support! Book your free consultation with our experts at +971 4 450 1023 or drop us an email at info@gatestonegroup.com.
Author: Rehan Abid – Managing Director
