Free zone company formation in UAE refers to setting up a company in one of the free trade zones located across the country. Free zones in UAE are specific business zones that have been established to offer business opportunities to investors in all major sectors under the friendly economic policies of the government.
The most amazing aspect of setting up a company in free zones is the fact that free zone companies are exempted from taxes. Additionally, the free zone company set up fee is also extremely low, which makes the UAE free zones a major attraction for investors from across the world. There are around 40 free zones located in the UAE, most of which are present in the cosmopolitan city Dubai.
Getting Started with Free Zone Company Formation
A free zone company in UAE is a company that can be established in a specific free trade zone with the minimum requirement of paperwork. Each free zone in UAE offers business opportunities to investors in selected categories and investors need to identify the potential of a specific trade zone in line with requirements and objectives of their business. There are different types of free zone trade license that can be issued to the investors and this is again a crucial choice that needs to be made while getting started with the free zone company set up in UAE.
Free Zone Areas in UAE
With around 40 free trade zones located nationwide, United Arab Emirates brings amazing opportunities for international investors to invest in one of the fastest growing economies in the world. The free trade zones in UAE are a major attraction for global investors and play a primary role in improving the scope for international trade in the country.
The cosmopolitan city Dubai is the hub of all business and commercial activities in the Middle East region. Dubai has the highest number of free trade zones in UAE. There are more than 20 free trade zones in Dubai that offer several business opportunities to investors. Free zones in UAE are also located in Abu Dhabi, Fujairah, Sharjah, Ras Al Khaimah, Ajman and Umm al-Quwain.
Here are some of the biggest free trade zones in UAE:
- Jebel Ali Free Zone Dubai
- Airport Free Zone Dubai
- Dubai International Financial Center
- Dubai Multi Commodities Center (DMCC)
- Dubai Outsource Zone
- Abu Dhabi Airport Business City
- Masdar City
- Industrial City of Abu Dhabi
- Sharjah Airport Free Zone Authority
- Ajman Free Zone
- Fujairah Free Zone Authority
- Ras Al Khaimah Free Trade Zone
Free Zone Trade License Types in UAE
A variety of options are available for investors to set up their free zone company in UAE. The flexibility in choices allows the investors to make the right decision according to their business capital and requirements. Besides all the other advantages of setting up a free zone company in UAE, investors also get an opportunity to select from three different license options to start their free zone company. The three license types for starting a company in UAE’s free zones are:
- Industrial License
- Commercial License
- Professional License
Types of Free Zone Companies in UAE
Different types of free zone companies can be established in UAE as per the preference and business requirements of investors. The wide variety of options available for setting up a free zone company makes UAE an ideal country for foreign investors to expand their business. Here are the details of the two major types of companies that can be established in the UAE free zones.
FZE Company
FZE stands for Free Zone Establishment. This is basically a limited liability partnership that can be established in a specific UAE free zone. In an FZE, the liability of an individual shareholder remains limited to one’s share in the capital of the company.
Requirements
Investors have to complete all the legal requirements and essential procedures to set up their Free Zone Establishment in UAE. Here are the documents required to complete registration procedure of an FZE:
- Application form to register for FZE company set up
- Shareholder’s original passport and its copy
- NOC from the current sponsor for a shareholder who is a UAE resident
- Business/Project plan
- Business profile of the shareholder
- Specimen signature of the designated manager or shareholder
If the setup of an FZE includes a corporate shareholder, the documents required are:
- Registration Certificate
- Memorandum of Association
- Articles of Association
- Specimen Signature
- Passport copy and UAE entry visa of designated manager
All of the above-mentioned documents are needed to be legally verified if a foreign company is the corporate shareholder.
FZCo Company
FZCo is also a limited liability partnership that can be established in a selected free trade zone. According to rules of the Free Zone Authority, the liability of the company remains limited to the assets of the company. An FZCo company can be formed with 2 or more shareholders and these shareholders can include individuals, companies or even a combination of both.
Requirements
The requirements for documents and the overall procedure for setting up a free zone company differ in different free zones across the UAE, however, the basic requirements remain the same. Following documents are required for setting up an FZCo in a UAE free zone:
- Application form to register for FZCo set up
- Original passport and copy of a shareholder or the designated manager
- Original passport and copy of all shareholders
- NOC from the current sponsor for a shareholder who is a UAE resident
- Business/Project plan
- Business profile of all shareholders
- Specimen signature of the designated manager
For companies looking to establish an FZCo, following documents will be required:
- Registration Certificate
- Memorandum of Association
- Articles of Association
- Specimen Signature
- Board resolution to set up an FZCo
- Passport copy and UAE entry visa of designated manager
All the above-mentioned documents need to be legalized if the corporate shareholder is a foreign company.
Free Trade Zone License Cost in UAE
The trade zone license cost and the company registration cost UAE vary from free zone to free zone. The license cost in free zones located across Dubai is slightly higher than the license cost in other emirates. The starting price for a free trade zone license in UAE is around AED 7,000 that can go as high as AED 40,000 based on the nature of business, business activity and the specific free trade zone selected.
Benefits of Setting up a Company in UAE free Trade Zones
There is a long list of benefits that can be availed for setting up a free trade zone company in UAE. Apart from the complete ownership of one’s business, investors also get an opportunity to grow their business in a friendly economic environment by starting their company in UAE free trade zones. Let’s explore all the major benefits of setting up a free zone company in UAE:
- No Corporate Tax
- No Income Tax
- No duty fees on exports or imports
- 100% foreign ownership of the business
- Ease of doing business
- Friendly government policies and support services from authorities of free zones
- Low-cost business set up
- Minimum paperwork required to start a business
- No restriction on visas of staff and family members of company shareholders
- Three years visa validity for shareholders
Jebel Ali Free Zone is the leading free trade zone in UAE for free zone company formation. The proximity of the Jebel Ali Free Zone to the Port of Jebel Ali makes this Free Zone an ideal zone for investors looking to obtain a general trading license in UAE. This amazing free trade zone is also one of the major zones in the UAE for international trade.
