A Step-by-Step Guide to Start a Business in A Free Zone in the UAE.

Companies in the UAE's Free Zones

In the United Arab Emirates, there are approximately 40 free zones in existence, with more on the way. Each Free Zone is centred on one or more commercial sectors, and only those businesses that fall within such categories are permitted. In the UAE's Free Zones, there are no restrictions on foreign ownership, and businesses are overseen by an independent Free Zone Authority (FZA), which is responsible for the operating licenses issuance, and overseeing company activities. The UAE is becoming a major business hub that is ideal for establishing a company or a representative office. In the United Arab Emirates, there are now over 40 different "Free Trade Zones," making it easier to choose the best one for STARTING business. A common misconception is that a Free Zone Firm is the same as an offshore corporation; nevertheless, despite their similarities, they have major distinctions.

Apart from allowing owners, directors, and employees to get UAE residency visas, The following are some of the advantages of a Free Zone:

  • 100% foreign ownership (no requirement for a local partner/sponsor);
  • 100 percent capital and profit repatriation;
  • Exemption from business and personal income taxes of 100 percent;
  • Currency limitations are not present;
  • A wide range of activities that can be licensed;
  • Energy that is plentiful and affordable;
  • Communication that is both modern and efficient;
  • Efficiencies in logistics as a result of the business cluster effect;
  • Serviced offices and workstations for SMEs and start-ups;
  • Excellent assistance services.

The type of business activity you wish to engage in, will have a considerable influence on the Free Zone you select to meet your requirements. The primary Free Zones and their licensed activities are as follows:

  • "Dubai Multi Commodities Center (DMCC) – Commodities Trade and Exchanges;
  • Jebel Ali Free Zone (JAFZA) – Trading, General Trading, Service, Logistics, and Industrial; 
  • DIFC (Dubai International Financial Center) - Banking, Financial Services, and Legal Services
  • Dubai World Central (DWC) - Aviation, Logistics, Light Industry, and Supporting Services;
  • Dubai Knowledge Park (DKP) - HRM, Training, and Personal Development;
  • Dubai Internet City (DIC) - ICT;
  • Dubai Media City (DMC) - Activities relating to the media;
  • Dubai Silicon Oasis (DSO) - ICT, Telecommunications, Electronics, and Engineering
  • Healthcare, Medical Education and Research, Pharmaceuticals, and Medical Equipment are all part of Dubai Healthcare City (DHCC).
  • Ras Al-Khaimah (RAK) — Commercial, General Commercial, Service, Industrial, and Educational;
  • Fujairah Creative City (FCC) – Media, Consulting, Communications, Design, and Technology.

What Are the Steps to Get a Free Zone Business Off the Ground? The procedure for forming a corporation in a free zone authority is regulated by the appropriate free zone jurisdiction. The following are the steps to take, in order to start a business in a free zone:

  • 1.Determine the legal entity type:
  • Two of the most common legal entities in free zones are as follows:

    • FZ LLC (Free Zone Limited Liability Company) or FZ Company (FZ Co.)
    • Establishment of a free zone (FZE)

It's worth noting, though, that none of these legal forms is available in every free zone. As a result, you should always consult the targeted free zone authorities before registering your company.
You may also set up branch offices in free zones, which is a plus. Capital requirements also change from one free zone to another.

2. Select a business name

Naming your firm gives it a unique identity and is the first step toward building a strong brand. Consult the Department of Economic Development (DED) or the free zone body that oversees your business setting before naming your company. Inquiring into the legitimacy of the name you want might tell you whether it doesn't follow the regulations for trade names or if it's already been registered by another business. The following are some trade name naming conventions:

  • The name must be followed by the entity's legal form (LLC, FZE, FZC, etc.).
  • The name must not offend public morality or the country's public order.
  • No names of governmental authorities, emirates, the United Arab Emirates, or religions shall be included in the name.

3. Submit an application for a business license

After choosing a trading name and registering it on the free zone authority's website, you must apply for a business license.
A list of the numerous business permissions available has been supplied by the free zone authorities. The type of business license you require is decided by the primary activity of your organization.
You must supply the accompanying documentation while applying for the license.

4. Determine the location of your office

Free zone authorities provide flex-desk office space to help new enterprises get started. You can either buy or lease an office space in a free zone. The size of your office is determined by the number of workers you have and the type of your business.

5. Get Pre-Approval, register your business, and get your license

Acquire the initial approval, as well as any other essential business approvals, from the proper authorities, and then register your business on the site and obtain your license.

What kinds of licenses are available in the UAE free zones?

The foundation of a firm in the UAE free zones is incomplete without the acquisition of a business license. The following types of business licenses are available to applicants in the UAE free zones:

  • General Business License
  • Commercial/Trading License
  • Service License
  • Warehousing License
  • Manufacturing License
  • Professional License
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