Economic areas where goods and services are traded tax-free are free zones. As for free zones in Dubai, there are business zones where companies are exempted from tax such as Value Added Tax (VAT), Corporate Tax, Income Tax and Customs.
To put it simply, free zone areas are tax-free zones that promote various business opportunities and trade. Among other factors, top reasons to start a business in Dubai free zone include:
- Tax Exemption
- Ease of setting up a company
- Top-class infrastructure
- Shareholding pattern
- 100% ownership
- 100% profit repatriation
- Logistics support for trading companies
- Networking opportunities
- No foreign exchange controls
- Residency visas available
Dubai free trade economic zones encourage foreign markets to invest in Dubai. Tax exemption is a big factor that contributes to foreign investment. Moreover, foreign investors can have complete ownership of their companies in the free zone. They don’t need a sponsor or locals to set up their companies.
Dubai Free zones have a great infrastructure, business-ready solutions, business support facilities, sophisticated offices and high-speed connectivity infrastructure. These free zones also offer exclusive discounts for start-ups looking to set up their business in the UAE.
How to Start a Business in Dubai Free Zone
Setting up companies in Free zone areas of Dubai is easy, requires minimum paperwork and can be done in a short time duration. Following are the key steps or requirements to start a company in Dubai free zone area include:
- Determine the type of legal entity that would suit you
- Choose a trading name
- Apply for a business licence
- Choose a space to set up your office
- Get pre-approvals, register your business and get the licence to operate
Let’s go through the process of the Dubai Free Zone Company Formation in detail.
Step 1 – Determine the type of legal entity
There are two types of free zones in Dubai:
- Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.) – A Free Zone Company has a single shareholder (an individual or a company)
- Free Zone Establishment (FZE) – A Free Zone LLC is a business entity that is neither a sole proprietorship/partnership nor a true corporation, but a unique structure with two to
five shareholders.
Step – 2 Pre-approval Stage
Application to register a company with a free zone in Dubai has to be submitted through the free zone’s registrar. Some Dubai free zones like DMCC have their own online portals giving clients the option to process the initial application instead of going to the registrar for submission.
The pre-approval stage includes completion of application forms, company name reservation, registering the shareholder and officers’ details, and activity, management and compliance approvals.
Step 3 – Registration
In this step, the invoice issuance, submission and verification of the original legal documents for company registration takes place. During this stage, most free zones need the shareholder or the authorised signatory to visit the registrar to sign and verify various essential documents, including passports and IDs.
Step 4 – Licencing
The final step is the signing of the lease agreement and finalising of the licence by the registrar. After the management approval is granted, the licence and corporate documents of the company are issued.
These are fairly simple steps, but you can also hire professional consultancy firms to help you with Dubai Free zone company formation. These firms charge a fee for their services.
Popular Free Zones in Dubai for Company Formation
There are more than 30 different free zone areas in Dubai, and the number keeps growing. Following is a list of some popular Dubai free trade zones.
- Dubai Airport Free Zone (DAFZA)
- Dubai Design District
- Dubai Healthcare City
- Dubai International Academic City
- Dubai Internet City
- Dubai International Financial Centre
- Dubai Knowledge Park
- Dubai Media City
- Dubai Gold and Diamond Park
- Dubai Multi Commodities Centre (DMCC)
- Dubai Silicon Oasis (DSO)
- International Media Production Zone
- Jebel Ali Free Zone
- Dubai Production City
- Dubai World Central (Dubai South)
- Dubai Studio City
That is all about starting a company in the Dubai Free zone.
On another note, if you’re looking for properties near the free zone areas of Dubai, here’s a list of offices for sale in Dubai. Besides, if you’re in search of warehouses, go through these warehouses for sale in Dubai.
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