Setting up a business in Dubai’s Free Zone has become an attractive opportunity for entrepreneurs due to the benefits of the Free Zone authorities. These benefits include minimal paperwork and duration, tax reliefs, full foreign ownership, 100% return of profits and capital and optimum location.
As the name suggests, entrepreneurs are free to expand their companies without any restrictions from Free Zone Authorities. These zones are the most renowned free trade zones in the world.
The investors get remarkable networking chances, UAE residence visas and trade with no barriers. Let us discuss in detail the key steps to open a Free Zone company in the UAE and its benefits.
What is a Free Zone Company in Dubai?
A Free Zone company is a legally registered business in one of the free trade zones in UAE. There are two main categories of free zone companies, a Free Zone Establishment (FZE) and a Free Zone Company (FZ CO.) The Free Zone Establishment (FZE) is the most popular business setup in the UAE.
Steps to Start a Freezone Company in Dubai
The process of starting a free zone company in the UAE is quick due to the less paperwork and time required. There are some key steps that you need to follow in order to complete this procedure, which are discussed below.
Select Business Activities
The first step in starting your company in UAE’s free zone is to select the business activities that you want to do. The business activities you choose are related to the type of license and free zone for your company.
A company setup or Freelancer Permit
If you set up a free zone company, it will offer you more options in trading and get staff members. While a freelance permit in UAE-free zones is economical, there are only a few free zones that issue freelance permits to entrepreneurs.
Type of License
The type of business license issued is according to the type of business activities you select, whether you select trading, commercial or professional activities. You can select multiple activities under one license, except you cannot combine commercial activities and services under one license.
Select the Type of Legal Set up
The next step is selecting a legal setup for your company. There are two types of setups available for Dubai free zones companies.
- Free Zone Company (FZ Co. ) or a Limited Liability Company
- Free Zone Establishment (FZE)
In a Free Zone Company (FZ CO.) setup, there are multiple shareholders, while in a Free Zone Establishment (FZE) setup, there is only one shareholder.
These setups may only be available in some free zones in the UAE. It is better to consult with the free zone authorities before selecting a legal entity.
Choose a Free Zone
For Dubai Free Zones companies, choosing a Free Zone according to the business activities you selected is important. Keep in mind the importance of location, infrastructure and other facilities. There are several free zones specific to different sectors, such as Dubai Maritime City Authority (DMCA) and Dubai Outsource City (DOC), which are made specifically for the healthcare industry, finance, ICT, and maritime.
While selecting the free zone, make sure to keep in mind your requirements from the workplace to security facilities. Additionally, select a location near main roads, seaports, airports, etc.
Select a Company Name
While selecting a name for your company, make sure it is unique, appealing and complies with regulations set by authorities. If you want to use a personal name, that person must be a partner in the company, and his full name should be used. After selecting the name, it must be registered with the local authorities.
Get Your License
To legally run your company in a free trade zone in UAE, you need to get a license first. The documents required for license application are,
- Photocopy of shareholder’s passports
- Application from
- Memorandum of Association
- Business plan
- Audit report of current business
- Capital information
Apply for Visa
After submitting documents and getting your license, apply to get a visa for yourself and company workers. For visa application, you’ll need to get an entry permit, health test, Emirates ID and visa Stamping. The process of immigration and visa can be streamlined with the help of an experienced accountant.
Open a Bank Account
To keep track of the financial transactions of your free zone company, you’ll need a corporate Bank Account. Select a bank that is suitable to the requirements of your company, such as charges, balance requirements, and banking services.
There are different eligibility conditions in different banks. Some banks may require all the shareholders to have residence visas. With the help of a consultant, you can easily determine how to select an appropriate bank.
These are all the necessary steps for opening a company in the free trade zone in the UAE. Consider hiring an expert business consultant to help you navigate through all the necessary steps, like determining the Dubai Freezone company setup cost, documentation and registration process.
Documents required for Dubai Free Zones Companies
The required documents for Dubai free zones companies are
- Application form
- Business License
- NOC from present sponsor (for individuals only)
- Copy of existing trade license
- Passport Photocopy of the company’s directors
- Certificate of incorporation
- Letter of intent
- Specimen signature of the company’s directors
- Photocopy of existing trade license
For the preparation of necessary documents, it is also necessary to seek the help of a business consultant, as they will properly guide you through this process.
Dubai Freezone Company Setup Cost
The minimum cost requirement for Dubai free zones companies depends upon the free zone you have selected. The charges are typically between AED 15,000 to AED 50,000.
License Costs
A company must get its license according to the business activities it has selected, such as a trade license, industrial license, or services license. The cost of these licenses ranges between 15,000 to 50,000 per year.
Registration Costs
The registration costs of a free zone company are between AED 10,000 to AED 25,000. The registration fee is only paid once.
Visa Costs
If the shareholders want to stay in the UAE and hire staff members, they’ll need to plan their finances accordingly. The cost of getting an Emirates ID, medical tests and application fee can range from AED 3,000 to AED 5,000.
There are other costs as well, such as getting an office, health or property insurance, and utility charges. Plan your budget carefully while keeping all of these in mind.
Business Activities in Free Trade Zone in UAE
Dubai free zones companies get a lot of opportunities to grow their business, and it is one of the best options for foreigners to invest their money. There are several business activities we have discussed that you can select for the growth of your business.
- Telecommunication
- Marketing Services
- Health Services
- E-commerce
- Sustainable technology
- Trade and Logistics
- Accounting Services
- Creative Services
- Media Services
- Educational Services
- Information Services
- Tourism services
There are more than 600 business activities available to choose from in the DMCC Free Zone. It is crucial to select the business activities carefully before applying for your license.
Benefits of Dubai Free Zones Companies
There are multiple benefits of opening your company in free trade zone in UAE.
- Full foreign ownership
- Tax exemptions (corporate and income)
- Residence Visa in UAE
- No trade restrictions
- 100% return of profits
- Minimum Documents requirement
- Excellent Infrastructure and services
- No custom duty on imports
- Easy access to seaports and airports
- No prohibition on hiring foreign workers
Additionally, the free zone provides warehouse facilities for the companies to store and manage their inventory easily.
Final Thoughts!
In order to start a successful Freezone business setup in Dubai, start by following the necessary steps mentioned above and plan your budget with the help of a business consultant expert in the legalities of free trade zone in UAE. In this way, you can keep track of your Dubai Freezone company setup costs and utilize your finances effectively.
Our expert team at Al-Riyady can help you with the smooth setup of your company in Dubai’s FreeZone. We also provide services including Accounting & Auditing Services, Tax Consultancy, Business Liquidation, Bookkeeping and many more.
