5 Things You Need to Know About Freezones
Situated along the Arabian Gulf coast, the UAE was traditionally known for its oil trading industry but in this modern era, it has emerged as one of the biggest global business hubs and a favorite destination for foreign investors, consumers, and tourists.
The UAE offers more than 40 multi-disciplinary and economically savvy Freezones, where new investors can have full ownership of companies, independent laws and regulations, sophisticated infrastructure, and easy access to global markets.
However, as effortless as it is to start a Freezone company, there are a few fundamentals that you need to know before setting up your business in Dubai.
Mentioned below are the five main prerequisites that will help you in understanding company incorporation/formation in the UAE.
1. Selecting the type of business activity
Three main legal entities can be set up in the Dubai Freezone –
- Branch of a foreign or local company
- Freezone Limited Liability Company (FZ LLC) or Freezone Company (FZC)
- Freezone Establishment (FZE)
A Freezone Company (FZC) can be registered with two or more shareholders, while a single shareholder can establish a Freezone Establishment (FZE). These shareholders can be an individual or a company.
2. Choosing a business activity and a trade name
After selecting the business entity type, the foremost step is to choose your business activity. Most Freezones allow multiple business activities under one license, depending on what best suits your needs.
After choosing your activities, you must register the name of your company, known as trade name registration. The UAE has specific rules regarding the names chosen for a business. The following points should be kept in mind –
– Avoid using offensive language
– The name should not refer to any religions or beliefs
– Should not be related to any government bodies
3. Choosing a Freezone
The business activity you choose determines the business license, which further defines which Freezone you can choose from to set up your business. It is also imperative to know that not all Freezone in Dubai allows acquiring the same kind of licenses.
4. Apply and submit documents for approval
Once you have decided on the Freezone, you must submit the necessary documents as per the Freezone requirements. The basic documents are the passport copy of the shareholder, contact information, and phone number. Some Freezones may also require a detailed business plan and external approvals.
Once you apply, the UAE Freezone Authority will provide an application form that the shareholders will sign and submit back.
5. Freezone License and opening a bank account
After the document approvals, the concerned authority will issue a Freezone license along with a share certificate and Memorandum of Association (MOA). The following licenses are offered by the Freezone Authority for Freezone company set-up:
- General Trading License
- Commercial License
- Professional License
- Industrial License
- Service License
- E-Commerce License
After receiving the Freezone license and other approved documents, you can apply for a corporate bank account. The registered Freezone usually assists in finding a suitable bank that fulfills your requirements and accordingly provides a full suite of financial services.
Benefits and Opportunities of a Freezone Company in the UAE
- 100% foreign ownership of a company
- Low start-up and operational cost
- Businesses are exempted from import and export taxes
- No currency restrictions and 100% repatriation of capital and profits
- Tax exemption on personal income
- Easy Freezone company formation procedures and labor recruitment
- Provision of sophisticated and world-class infrastructure and communication system
Freezone Visa
Freezone visas are one of the many benefits of operating in a Freezone, directly linked to the licensing packages, and can be applied for by business owners, along with their employees and domestic staff.
A Freezone visa costs nearly AED 5,000, however, it all varies on the Freezone through which you will apply. The visas usually take two to three weeks in total, and entry permits are issued within 15 days, which can be fast-tracked if necessary.
How can INCORP help you?
INCORP will guide you to all the unrivaled benefits and techniques of setting up a business in the UAE Freezones. Speak to us to find out more.