Setup a free zone company in Dubai is a great option for investors as they can receive outstanding benefits. There are more than 20 Free Zones operating in Dubai, therefore, business owners have plenty of options to choose from.
In this article, we are going to gain more insight into how to incorporate a free zone company in the UAE. Moreover, you will understand the documents and steps you need to go through to start your business.
Steps To Setup Your Business In Dubai
Dubai welcomes dedicated entrepreneurs! Introducing your business here opens up a world of opportunities. Let’s explore the steps
Step 1: Choose Your Business Activities
Once you know about the business opportunities in Dubai, you may want to consider establishing a company in that Emirate. However, if you have been doing your research, you may have determined that a free zone company can be a great option.
If you have evaluated all the possibilities for incorporating a company, you may already know there are the following three different types:
Each type of company has its benefits and, depending on your unique needs, one of them may be more suitable. Regardless of the type of company you decide to incorporate, you have to determine first the nature of your business.
Therefore, you have to decide on the business activities you are going to carry out. In this regard, you have to consider the industry where you want to work.
During this step, you also have to determine the type of legal structure you want your business to have. In a Free Zone, there are only two types of companies, which are the following:
- FZ LLC: a Free Zone Limited Liability Company, also known as Free Zone Company (FZ Co.) can be incorporated with a maximum of 5 shareholders.
- FZE: A Free Zone Establishment can be incorporated with a single shareholder, either a legal or natural person.
Step 2: Select a Suitable Free Zone
In Dubai, there are around 26 different free zones. Thus, as you can see, you have to choose the one that suits perfectly the activities you want to carry out. For instance, there are different industries and Free Zones that are most suitable for them, like the following:
- Technology and Innovation
- Media and Creative industries
- Education and Research
- Logistics and Manufacturing
- Healthcare
- Financial Services
- E-Commerce
As such, you need to look for the location where your business can thrive. If you want to start an IT company, then you have to opt for those where tech and innovation are the main industries.
Step 3: Choose a Trade Name For Your Business
Company that is established in any of the special economic zones of Dubai, and if you want to incorporate yours, you need to decide on a trade name as well.
In this regard, the trade name has to comply with the following:
- It must not have been registered previously by another company.
- In some Free Zones, you cannot include the words “United Arab Emirates” or the Emirate’s name.
- The name cannot violate the public order of the country.
- You should include the legal form of the company (FZE or FZCO) at the end of the name.
- The name has to comply with the business activities you will carry out.
- It cannot contain names or words referring to religion or external bodies.
Step 4: Make Your License Application
Once you have decided on the business activities, preferred free zone, type of legal structure, and trade name, the next step will be to apply for the business license.
Although there are several types, they may vary across the different free zones. Some of the licenses are the following:
- Commercial license: companies with this license can engage in trading activities like import, export, retail, and wholesale.
- Industrial license: allows you to manufacture goods and products, across a wide range of activities.
- Professional license: with this license, you can offer service-oriented solutions such as consultancy, legal advisory, etc.
- E-commerce license: allows businesses to engage in online trading.
- Tourism license: businesses such as hotels, travel agencies and tour operators must apply for this license.
Depending on the free zone there may be additional licenses, like educational, media, warehousing, and others. You should apply for the license at the respective authority of the Free Zone.
Thus, you need to gather the required paperwork and fill out the application form. The processing time may take around a week. Once your application is approved, you will receive your license and can start operating.
Keep in mind that once you start operating in a free zone, you should renew your trade license in Dubai before it expires to continue running your business uninterruptedly.
Step 5: Commence Visa Applications
Applying for visa services in UAE can be a complex process if you do not understand how to do it. After you have done the registration process, then you need to start the visa application process.
Keep in mind that for being able to work and live in the UAE you should have a valid residence visa. Each shareholder must apply for a visa, and you can also sponsor the visa for your employees or your relatives.
Step 6: Establishing Your Corporate Bank Account
The last step for expanding your business in UAE is to open a bank account. This is to have a dedicated corporate account for your free zone company to manage its finances, as it is very important.
There are many banks to choose from, you just have to look for a financial institution that offers services tailored to your needs. Thus, you just need to consider the following:
- Gather the essential documentation of your company
- Provide relevant business proof
- Pay the opening fees
In just a few steps you are able to have a corporate bank account for your company.
Cost To Open Free zone Company In Dubai?
The cost of starting a free zone company in Dubai may vary considerably depending on several factors like the following:
- Business activities
- Type of legal structure
- Free Zone’s particular requirements
- Business size
- Type of business license
Thus, the cost may range from 11,000 AED up to 50,000 AED. Since fees can vary, it is important to check which zones offer a more cost-effective option in case you have a limited budget.
Advantages of Free Zone Business Setup in Dubai
Establishing your free zone company in Dubai will give you access to outstanding benefits. The UAE is known for being a land of opportunities, and Free Zones are a great part of the popularity of the Emirates as a business location.
Some investors may prefer the benefits offered by free zones rather than those of a mainland company. While others may prefer to opt for an offshore company.
Complete Ownership of Business
Without a doubt, the main benefit a FZE or FZCO gives to its owner is full ownership. Unlike companies established in the mainland, in a Free Zone, you do not need to have a local sponsor to incorporate it.
Thus, you can have 100% ownership of your company, even if you are a foreign investor. Thus, all the decisions and management of your business are up to you.
Full Profit Repatriation
With your free zone company, you are able to repatriate all the profits outside the UAE. In addition, you get to repatriate the total capital to your home country.
In addition, there are the following financial benefits:
- No foreign exchange controls
- 100% free transfer of funds
9% Corporate Tax
Dubai is known for being a tax-free location, however, it is important to understand the details to enjoy this benefit. Previously, there was no corporate tax on these companies, but according to the new regulations, there will be a 9% corporate tax.
However, Free Zones continue to offer several tax incentives such as the following:
- 100% customs exemptions
- 100% VAT exemptions
As you can see, with just 9% corporate tax you are able to retain your profits on business revenue and enjoy all the other tax exemptions.
Simplified Import and Export Processes
Given that for a freezone company, there are no customs duties, you can enjoy an effortless import or export process by incorporating this type of business. You can simplify international trade and boost your profits with this amazing benefit.
Strategic Location, Global Connectivity
When you start your business in the UAE, you get to enjoy the great advantage of being in a commercial hub in the Middle East. Since Dubai is the perfect connection between the East and the West, you get to work in a privileged location.
Additionally, depending on the place where you incorporate your free zone company, you have proximity to airports, sea ports, and borders so you can boost your trading advantages.
In addition, you get to experience global connectivity with countries of the MENA and Southern Asia regions.
Thriving Expat Entrepreneurs
As a business, you get to build your workforce in the UAE by getting access to the talent market where you can find suitable candidates. Nonetheless, you have to know about the UAE Labor Law to stay compliant.
Also, you get access to a diverse business community where you can meet like-minded investors and work on your network. All of this facilitates making business.
Range of Business Activities
Although many investors may think that Free Zones do not have a large offering for business activities, the truth is that there are many thriving industries to choose from.
Time-saving and Simple Registration Process
Incorporating your freezone company is very simple as it is a straightforward process. You just have to go through a few steps and you are ready to start. Nonetheless, it is always helpful to count on the support from experts to ensure a swift registration.
Documents Required for Free Zone Company Formation in Dubai
To get the necessary approvals to start your company in a free zone you need to gather the mandatory documentation. Therefore, you need to ensure it does not have any errors and that is in accordance with the requirements.
It is worth noting that if you have any errors in the documentation, or in the application form, your application will be rejected. Thus, you need to select carefully your documents and read the requirements to avoid any delays.
In addition, some documents that are issued outside of the UAE must be translated into Arabic. For this reason, you need to find a legal translator that can do this work, as well as the attestation for those that require it.
Application license form
The application form is the main document you need to incorporate your company. Since you have to fill out this document, you need to ensure it is error-free so the Authority does not reject your application.
In this regard, you need to provide the following details:
- Essential information about your business
- Details about shareholders
Once you complete it, you have to sign it and submit it with the required documentation.
Business card
Another key document you need for establishing your business is the Registry Identification Code form, also known as RIC. Thus, you have to fill it out after the initial approval and submit your business card. This is the way to obtain a unique code as a business in Dubai.
However, this may be required only for businesses looking to engage in the import and export of goods.
Business plan outlay
Every business that wants to reach success must have a business plan. This document details everything about your business, such as the goals, financial forecasts, risk prevention, operational schedule and operations.
Since it is a roadmap for your company, you should prepare it in advance to ensure you include all the key aspects that will guide your growth. Given it is essential for approval, you need to prepare it excellently.
MOA (Memorandum of Association) and AOA (Articles of Association)
The Memorandum of Association (MOA) is a legal document where the company states its activities, structure, and objectives. Since it is a legal document, you need to look for experts to draft it.
Additionally, you have to prepare the Articles of Association (AOA), which is also a legal document but it contains the rules and regulations that the company has to follow.
All shareholders must agree and sign on these legal documents as they are a major part of the application process.
Passport copies
Every shareholder of the company must provide a copy of their passport, complying with the following conditions:
- The copy should be in color
- The passport should have a minimum validity of 6 months from the time of the application.
Bank reference and license of the partner’s existing business if applicable
In the case the partner has an existing business, it is necessary to provide the business license. However, this only applies in this particular case where the shareholder is an existing company. Also, this only applies to local companies.
In addition, shareholders must submit a banking reference from a personal bank, as this is an essential document to obtain the initial approval.
Conclusion
Establishing a company in a Free Zone is a process that involves following several steps and gathering specific documentation. Thus, if you want to make it simpler, you have to rely on experts who can provide a tailor-made solution.
Contact us now to let us help you set up your Free Zone company in the UAE. We have a team of specialists readily available to assist you in your journey to the Emirates. Trust in our expertise and knowledge to have a smooth incorporation
