UAE Freezones

Dubai is now widely considered the world’s premier business destination for start-ups, investors, entrepreneurs, and corporations. Central to this transformation is the Emirati government’s steadfast commitment to introducing and developing UAE free zones.

The UAE hosts over 40 multidisciplinary Free Zones. These Free Zones cater to the diverse requirements of every sector, ranging from corporate services and creative design to IT and Software, commodity trading, and beyond. The UAE Free Zones provide a wealth of opportunities for entrepreneurs, investors, and businesses seeking to establish or expand their operations in the region.

Unlike mainland areas, free zones are independent business zones typically situated near a port or business hub. Each free zone operates under separate legislation from the government rules and regulations that govern onshore or mainland companies in the UAE. As a result, each UAE free zone has a distinct free zone authority, each focusing on a specific sector or industry.

The establishment of free zones in the UAE was a strategic decision by the authorities aimed at promoting the country’s economic growth. Free zones provide numerous incentives for business setup within their respective sectors, effectively attracting foreign companies to operate in the UAE.

With its strategic location, business-friendly environment, and comprehensive infrastructure, the UAE stands as an ideal jurisdiction for businesses in Dubai and the broader Middle East region. 

UAE Free Zones emerge as the perfect platform for businesses to achieve growth and success in a competitive market, making an excellent addition to your jurisdiction portfolio.

Advantages

Apart from the economic benefits, free zones offer a nurturing environment that encourages innovation and facilitates networking within a varied community of professionals who share similar goals. Whether you’re a startup, a small or medium-sized enterprise (SME), or a multinational corporation, leveraging the strategic advantages of a free zone can synergize with and enhance your business objectives. Choosing a free zone can be a wise decision for those looking to explore and capitalize on new markets and opportunities.

While each specific free zone in the UAE has its unique set of advantages, they all share the common feature of enabling companies to do business seamlessly across borders. In addition to this undeniable advantage, investors and entrepreneurs benefit from the following four key advantages:

  • 100% Foreign Ownership: Businesses in UAE free zones can enjoy full foreign ownership, providing international investors with a unique advantage.
  • 100% Repatriation of Capital and Profits: Companies operating in free zones have the freedom to repatriate 100% of their capital and profits, offering financial flexibility.
  • 100% Import and Export Tax Exemption: Free zone businesses are granted a complete exemption from import and export taxes, facilitating international trade activities.
  • 100% Exemption from Income Taxes: Entities within free zones enjoy a full exemption from income taxes, contributing to a favorable financial environment for business growth.

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In addition to the core benefits, free zones go the extra mile by providing registered companies with everything they need to elevate their business to international success. This includes:

  • Incredible Office Spaces: Businesses in free zones can benefit from impressive office spaces, fostering a professional and conducive working environment.
  • Storage and Warehousing: Free zones often provide state-of-the-art storage and warehousing facilities, catering to businesses involved in manufacturing, logistics, and trade.
  • Premium Connections: Being part of a free zone offers businesses valuable networking opportunities and connections, facilitating collaboration and growth within the business community.
  • Prime Location: The UAE Free Zones are strategically situated, ensuring easy access to crucial commercial and logistical points, including airports, seaports, and major road networks. This excellent location enables businesses to efficiently connect with local, regional, and global markets.
  • Business-Friendly Environment: The UAE Free Zones offer a conducive environment for businesses across various industries, including trading, consulting, IT, media, and more. The process of setting up your company is streamlined, providing cost-effective solutions and efficient services. This business-friendly environment makes it easier for businesses to establish and expand their operations.
  • World-Class Facilities and Amenities: The UAE Free Zones offer an array of premium facilities and amenities, including high-quality office spaces, retail outlets, hotels, and recreational centers. These world-class amenities contribute to a thriving business ecosystem that fosters innovation and collaboration among businesses operating in the free zone.

Before establishing a UAE Freezone company, several crucial considerations should be taken into account.

  • Physical presence is not required in most free zones during the company formation.
  • VAT (Value Added Tax) is not applicable for business done outside the UAE
  • Corporate Tax is applicable for Freezone companies from June 2023, which is expected to be 9%
  • The business type could be B2B anywhere in UAE and B2C in the free zone
  • Multiple business activities under 1 license

These considerations collectively make the Freezone setup an attractive option for entrepreneurs seeking a conducive business environment in the region.

Types of Licenses in UAE Freezones

  • General Trading License: Allows investors to trade in all kinds of products.
  • Trading/Commercial License: Grants a time-limited authorization to perform industrial, commercial, or consulting activities.
  • Service License: Allows law firms, accounting firms, and business consultancy firms to operate.
  • Industrial License: Permits importing raw materials, manufacturing goods, and exporting finished products, across global boundaries.
  • Warehousing License: Investors can avail this license to access warehousing facilities on lease for distribution, packaging, and storage of goods.
  • Manufacturing License: Permits applicants to manufacture products.

Steps / Process

Entrust your business set-up to Octa Consult and capitalize on our expertise in the intricacies of each and every free zone in the UAE. We will conduct a comprehensive analysis of your business requirements and identify the best free zone for your company. Our aim is to strike the right balance between access to local markets and tax efficiency, ensuring that your business is set up for success in the UAE.

Step 1
Selecting Your Business Activity

In the UAE, you have a wide range of business activities to choose from. Some activities may require additional approvals or licenses, depending on their nature. It’s common for companies to select multiple activities under one license.

Step 2
Choosing Your Company Name

The UAE has specific rules regarding company names. Avoid Country or City Names, religious references, and names similar known organizations.

Step 3
Submit Your Documents

The standard documents usually required include shareholder passport copies, contact information, and sometimes a business plan.

Step 4
Choose an Office Space

If an office space is not a requirements for your business, the Free zone authorities often provide flex-desk office services to support start-ups. If office space is a requirement, you can either buy or lease office spaces in free zones. Office requirements depend on the number of employees and the type of business activity of your company.

Step 5
Apply for the business License
Step 6
Visa Processing

The final step involves immigration and visa processing, which Octa Consult, as a company setup specialist, will manage. There are different types of visas available (e.g., investor visa, employee visa) and note that the number of visas you can apply for may depend on factors like the size of your office space. Octa Consult will conveniently liaise with the right government departments and authorities to expedite your visa approval.

Step 7
Opening a corporate Bank Account

After receiving your business license, collect your corporate documents and receive your Emirates ID and Residency, we can proceed to open a corporate bank account. Different banks will have varying requirements for opening corporate accounts. We understand that Corporate Banking is an imperative part of business operation, which is why we will assist with the corporate bank account process on your behalf.

Step 8
Ongoing Support and Operations

Once you have your license, visa, and corporate bank account, there will be additional needs for your business to operate efficiently and lawfully. Octa Consult will assist you with ongoing support for any license upgrades, additional visa requirements, accounting and bookkeeping, tax requirements, office upgrades, relocation assistance, and more.

Frequently Ask Question

Can I trade outside the free zone if my company is registered there?

Trading within the UAE is not allowed for companies in Dubai’s free zones. But, if they want to do business outside these zones, they must appoint local distributors. All companies registered in the mainland can operate anywhere in the UAE.

The process includes
1. Finalize the business activity and name for your business
2. Gather all the documents
3. Get your license
4. Avail added services like visa, office space, etc
5. Open a bank account

Registering a company in Dubai has many perks. Some of them are 100% foreign ownership, tax exemptions, and the ability to repatriate profits. You can also enjoy the perks of having a strategic location for business expansion, smooth processes, and access to modern infrastructure.

Trading, Service, General trading, Industrial license.

It usually takes 1-2 weeks. The time needed can change based on the chosen free zone or Mainland setup, business type, approvals needed, document completion, and more.

Can I register a business in Dubai on my own?

Yes, it is possible. However, it is a tedious and tiresome process. Octa Consult can effectively incorporate your business in no time.

No, foreigners can benefit from 100% ownership in UAE

The cost of setting up a business in both areas is based on many factors. It includes license fees, office space, government charges, and visas. Your business activities and company size also affect costs.

Free zones don’t have to pay customs taxes, they offer smooth and organized import/export processes for goods and services.

Yes. A company developed in a free zone will require to register and file a corporate tax return in UAE.

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