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Located in the Arabian Peninsula, UAE is one of the most developed and progressive business hubs globally. Free zones are especially a unique feature in the UAE that attract many investors.
Free trade zones are typically positioned in critical geographic areas such as national borders, international airports, and large seaports to maximize commercial benefits.
Get in-depth knowledge about the UAE free zones in setting up a business overseas.
A free zone, also known as a free trade zone, is a tax-free zone with minimal trade barriers where goods can be manufactured, imported/exported, handled, or changed without paying customs taxes.
They were first implemented to encourage international business in the region by providing incentives such as 100 per cent foreign company ownership. As a result, there are more than 40 free zones in the UAE.
The free zones of the United Arab Emirates have evolved through time to give ever-increasing benefits to the businesses that operate within them. Many free zones are tailored to specific industries or companies; for example, Abu Dhabi Airport Free Zone (AFZA) is dedicated to aviation, engineering, electronics, logistics & cargo, and pharmaceutical firms.
Setting up a business in a free zone in the UAE offers a host of benefits.
The types of business structures in the UAE free zones are discussed below:
There are two or more stockholders in a Free Zone Company (both individual and corporate shareholders are allowed). For example, a limited liability corporation (LLC) is a firm that operates in a free zone boundary.
Free zone establishments are for companies that have a single shareholder. This type of establishment consists of a single secretary and two directors.
A branch might be owned by a foreign firm or a corporation based in the UAE. A branch office shares the same legal identity as its parent corporation and does business under the same name.
UAE free zones offer a wide range of business activities, among which the followings are the most popular:
The foundation of a firm in the UAE free zones is incomplete without acquiring a business license. Applicants in the UAE free zones can receive the following types of business licenses:
1. General Trading License: This license allows investors to trade in various items.
2. A trading/commercial license: authorizes you to engage in industrial, commercial or consultancy activities for a set period.
3. Service License Provides legal, accounting, and business consulting organizations with the ability to operate.
4. Industrial License Permits importing raw materials, manufacturing items, and exporting completed goods across international borders.
5. Warehousing Permit: This license allows investors to lease warehouse facilities for the distribution, packaging, and storage of commodities.
6. Manufacturing License: Applicants must have a manufacturing license to create items.
Every free zone in the UAE has its respective authorities where you have to obtain the license and company registration. However, you have to go through the process to set up the company, which is as follows:
Decide what kind of business you wish to start in one of the free zones. The capital requirement for such an organization is determined by the free zone you want to establish a business.
Choose a trading name for your firm after deciding on the type of legal organization. It's important to double-check the proper trade names with the relevant free zone administration and if the desired name has already been registered.
After selecting a trading name and registering it with the free zone authority's web page, you must apply for a business license. The following is a list of the various business licenses issued by the free zone authorities. Your company's core activity determines the sort of business license you need. When applying for a grant, you must submit supporting documentation.
To assist start-ups, free zone authorities offer a flex-desk office service. In free zones, you may either buy or lease office space. The size of your office is determined by the number of workers and the nature of your firm.
Obtain initial and relevant business permissions from the appropriate authorities, register your business on the site and obtain your license. This procedure will only take 2-4 weeks to complete. You are now ready to start your business after you have received your license.
The required documents for company formation in the UAE free zones are mentioned below:
The Gulf Cooperation Council (GCC) or the Arab Embassy must translate, authenticate, and notarize various papers into English.
A copy of the degree or diploma certificate that mentions the intended activities, or an experience certificate [any of these papers is required]
Dubai Free Zone: Starts from AED 9,999
Sharjah Free Zone: Starts from AED 4,999
Abu Dhabi Free Zone: Starts from AED 4,500
Ajman Free Zone: Starts from AED 5,600
RAK Free Zone: Starts from AED 8,200
UAQ Free Zone: Starts from AED 7,999
*The prices mentioned above are inclined to change based on the additional services.
UAE has tons of free zones in almost every emirate. Here is the list of a few:
Free zones provide a plethora of benefits to aspiring entrepreneurs and investors looking to get their firm off the ground. Starting a business here is a breeze if you have local support and know-how. From business registration through legal formalities and value-added services, we at Business Setup Worldwide put your company vision and objectives at the forefront of our care.
Our advisers handle all banking, visa, legal, and licensing formalities, allowing businesses to focus on their business formation rather than bureaucratic procedures. So don't hesitate to contact us if you decide to start a business in the UAE, even if it's only for friendly advice.
7-10 days depending on the free zones.
AED 2,000-5,000 depending on the bank.
UAE Free Zone Companies can be opened remotely and there is no requirement of a Residency Visa for the same
Free Zone licenses begin at around 4,999 AED.
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