What are free zones? Free trade zones are areas in the United Arab Emirates (UAE) that have a special tax, customs and imports regime. These zones work under their own regulations. There are several UAE free zones across Dubai, Abu Dhabi, Sharjah, Fujairah, Ajman, Ras al Khaimah (RAK) and Umm Al Quwain.
Each free zone in the UAE cater to a specific type of business category. Business owners who want full ownership can choose a license and location in one of the many free zones in the UAE. These areas were created to encourage foreign investors with easier start-up process, labour and immigration procedures. Each zone has its own rules and governed by its own authority.
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Table of Contents
What are the Types & Functions of Free Zone in the UAE
Each free zone offers licenses to companies within those categories. An independent Free Zone Authority (FZA) governs each free zone and is responsible for issuing FTZ operating licenses and assisting companies with establishing their business in the FTZ.
Some of the exemptions of free zones are:
A new company can be registered by an investor in the form of a Free Zone Establishment (FZE) or simply establish a branch or representative office of their existing or parent company based within the UAE or abroad.
What is an FZE? It is a limited liability company governed by the rules and regulations of the Free Zone in which it is established. The provisions of the Commercial Companies Law (CCL) do not apply to FZEs, except for acquiring nationality in the UAE.
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Free Zones per Emirate
At present, there are 45 Free Zones operating in UAE.
You can view the complete map of UAE free zones here
How to setup a business in the UAE?
The UAE offers a lot of opportunities for foreign investors. However, investors need to know the basic rules in setting up a business in Dubai to avoid problems.
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FAQS about Business Setup in UAE Free Zones
1. What are the requirements regarding capital investment?
The requirements vary depending on business type and authority governing the free zone.
2. What are the types of businesses I can do in a free zone?
From financial, educational, retail, media to hospitality – you can do any business in any field. You must check with respective authorities for business permitted on their premises.
3. What is the process of setting up a business in UAE Free Zone?
Generally, free zones require minimum paperwork and duration. Here are the steps to set up a business in a free zone:
4. What are the different types of legal entities in UAE Free Zones?
There are two different types of legal entities in the UAE Free Zone:
5. How much is the capital requirement?
Depending on free zone, capital requirement may vary.
6. How do you choose a trade name? Are there rules?
A trade name should be chosen while choosing the type of legal entity for your business. It is advised to check with the respective free zone authority or with the Department of Economic Development (DED) if the name is already registered.
For example, twofour54 Abu Dhabi doesn’t allow the use of ‘Abu Dhabi’ and/or ‘United Arab Emirates’ in the name of the FZ-LLC or the branch
List of restricted trade names (DMCC):
DED will approve the proposed trade name if the following requirements are met:
7. Which type of business license should I apply for?
This will depend on the primary activity of your business. Here are some types of business license:
8. Which types of business activities can I open in free zones?
Here are some of the business types you can open in twofour54 Abu Dhabi:
Other types of business include:
Publishing and broadcasting
Similarly, you can choose from over 600 business activities ranging from over 20 sectors such as energy, commodities, gold and diamonds, technology, constructions, FMCG, healthcare, aviation, shipping, education, media, professional services, financial services and personal and community services in DMCC.
On the other hand, you can conduct financial and non-financial businesses in DIFC . Financial businesses include banks, insurance, wealth management and capital markets. Non-financial businesses include retail shops, restaurants, five-star hotels, art galleries and academic institutions.
9. How to lease an office space in free zones?
You have two options in acquiring an office space – buy or lease. The office requirement depends on the number of employees and type of business activity of your company.
In DMCC, you have the following options:
The following options are available in Dubai Airport Free Zone:
Meanwhile, Hamriyah Free Zone Authority provides over 100 executive offices suits ranging in size from 15 m2 to 42 m2 with conferencing and internet facilities.
10. What are the requirements for initial approval, registration, and licensing and visa process?
Each free zones have their own rules and companies established in these free zones are bound to follow these rules. The list of documents and requirements varies on the type of business activity, company and free zone authority requirements.
Here’s a guideline of documents required:
A. Initial approval
For freelancers, you need to submit the following document:
C. Licensing and visa process
SEE ALSO: 8 Answers About UAE Employment Contract
As per the UAE’s Federal Tax Authority (FTA).There are 20 designated free zones exempted from Value Added Tax (VAT). This means that the transfer of goods between designated zones, which are defined as specific set geographic areas with security measures in place to monitor the movement of goods and people, are tax free.
Abu Dhabi:
Dubai:
Ajman:
Umm Al Quwain:
Ras Al Khaimah:
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I need free zone smart office for corporate services a to s
By Kishore kumar (Oct, 2018) |
Twitter
An awesome and informative read. Thanks. One point that interested me was wherevyou mentioned about flexible employment process. So my question is, as a Bangladeshi citizen is not provided employment visa (unless its a high-end profession) can they get a visa if they get a job in a free zone company? Thanks.
By Suranjan Das (Apr, 2019) |