Of all the countries in the Middle East, the United Arab Emirates is the best to do business in and of all the emirates in UAE, Dubai is the best to do business in, and of all the places in Dubai, free zones are the best to do business in and today we will explore why.
Dubai and UAE have been so successful in inviting so many foreign companies to set up in the country and so many new businesses to start thanks to the many free zones they have created not just in Dubai but also in other emirates.
Today we will look at what these free zones are, what are their benefits, and most importantly how you can have your own Free Zone Business Setup in Dubai . In this guide, we will explain it all in detail and help you get started with your business.
What are Free Zones in Dubai?
Free zones are designated zones not just in Dubai but all the other Emirates as well, that are created to attract foreign investment and companies through economic incentives like no value-added or corporate taxes and other such advantages that make it extremely profitable for businesses to operate in them.
Some common examples of free zones in Dubai are as follows.
- Jebel Ali Free Zone (JAFZA)
- Dubai Multi Commodities Centre (DMCC)
- Dubai Airport Free Zone (DAFZA)
- Dubai Internet City (DIC)
- Dubai Media City (DMC)
Dubai Free Zone Benefits
Free zones in Dubai, and UAE as a whole offer plenty of benefits to companies and businesses operating in them, and here are some of the main benefits.
Almost Nonexistent Tax Policy
UAE as a country has almost no taxes, like income taxes or sales taxes, etc. But it does have value-added tax and corporate tax, at 5% and 9% respectively which is quite low compared to the average, worldwide. But if you operate your business in one of the free zones then you are also exempt from these taxes.
These taxes mainly apply to the businesses operating on the mainland and under certain conditions if you are doing business with the mainland etc., then the tax might apply to you but in most cases, you are exempt from it.
Total Ownership
Historically if you wanted to start a business in Dubai, you needed to have a sponsorship or a 50% partnership with a UAE citizen and this was applicable to all foreigners. But in the free zones foreigners can have 100% ownership of their business, which gives them total control.
First Class Infrastructure
Dubai is economically strong and has a first-class infrastructure in which its residents can work and live. This allows businesses to operate at maximum efficiency and anything they might need to set up or run their business is available to them in the free zones.
Expedited Business Setup
In order to be more business-friendly and attract more foreign investment, the government has smoothened the whole business setup procedure. They have removed all the major bureaucratic hurdles that would otherwise disrupt the business setup procedure and slow it down.
Excellent Location
If you look at the map you will find UAE and Dubai to be perfectly located between three major continents, Asia, Europe, and Africa. Having such an excellent geolocation allows for plenty of trade to go through Dubai that both local and international businesses can take advantage of.
Business Flexibility
In the free zones, you have the maximum level of flexibility to conduct your business. There are very few restrictions as to how you operate your business and you can freely trade with other companies and businesses both locally and internationally and if anything, the government will help you with it.
This also extends to custom restrictions that you normally have to deal with when operating on mainland Dubai or in most other countries.
What is a Free Zone Company in Dubai?
A free zone company or business in Dubai, essentially means any business that is operating in one of the free zones created by the Emirate of Dubai and as such they are eligible for benefits provided by the government to the companies operating in the free zones.
How to Start Free Zone Company in Dubai?
The process of starting a company or business in one of the free zones in Dubai is not much different than on the mainland, except the process is much faster and streamlined and you don’t have to deal with sponsorship or partnership issues. Here is a breakdown of the steps involved in starting a free zone company in Dubai.
- Selecting a Business Activity: Whatever business activity you are going to take part in, you need to select it when registering with the free zone authority that you setting your business in.
- Finding the Right Free Zone: Next depending on the kind of business you are setting up you need to select the right free zone. For example, an IT business can go to the Dubai Internet City (DIC) and a trading business is best suited for Dubai Multi Commodities Centre (DMCC)
- Selecting a Name for the Company: Next, you need to select a name for your business, that falls in line with the standards set by the government.
- Choosing a Business Structure: Before registering your business, you need to submit a business plan, stating what kind of business structure it will have, like a Limited Liability Corporation, etc.
- Opening a Corporate Bank Account: To set up any business in Dubai, you need to have sufficient funds to run it and you will need to open a corporate bank account to host these funds.
- Renting Office Space: Next, you need to find an office space in your desired free zone and secure it with a lease as it is a requirement before getting your business license.
- Getting all the Licenses and Permits: Lastly, you will need to submit all the necessary documentation and get all the prerequisite licenses and permits before you can officially start your business.
Documentation needed for a Free Zone Business Setup in Dubai
These are the basic documents that you will need when setting up your business in a free zone.
- Copies of Valid Passports
- Copies of Visas
- A Detailed Business Plan
- Financial Documents
- Lease Agreement for Office
This is not a set list and the authorities may ask for additional documents.
