Why UAE Free Zones are More Attractive to Start Your Business?
UAE Free Zones Benefits
In the UAE Free Zones, Free Zone Company (FZC) is a limited liability entity and can be incorporated by natural persons or legal entities. A new limited liability company with a single shareholder is incorporated as a Free Zone Establishment (FZE); while a multi-shareholder entity is a Free Zone Company (maximum up to 50 shareholders).
UAE free zones are free to trade zones where there is no duties or taxes which helps the investors to promote their business or trade. There are different UAE free zones in all seven emirates of the UAE. Also, in UAE free zones, the expatriates can hold 100% ownership in his business. So, most of the investors are interested to incorporate their business in UAE Free zones. Also, as a start-up, the initial investment will be less compared to mainland license.
The main benefits of UAE free zones being more attractive to start your business in UAE are mentioned below:
- 100% Foreign company ownership is allowed.
- 100% Import and Export tax exemption.
- 100% Exemption from all commercial levies.
- 100% Repatriation of capital and profits allowed.
- No Corporate Profit Tax and no Personal Income Tax.
- Less time consuming to form the company.
As I mentioned UAE free zones are there in all seven emirates, but investors are very much interested to form their companies in different emirates like Dubai, Sharjah, Ras Al Khaimah. As we all know Dubai is a business hub, people are more interested to incorporate their business in Dubai free zones like Dubai Multi Commodities Centre (DMCC), Jebal Ali free zone ( JAFZA), Dubai Airport free zone (DAFZA) etc.
Also, people are interested in free zones in northern emirates like Sharjah Media City (SHAMS), Sharjah Airport Free Zone (Saif Zone), International Free Zone Authority (IFZA) etc.
Once the client decided to incorporate the company in any of the UAE Free Zones, there are certain steps or procedure the client has to follow.
5 Steps to incorporate a company in the UAE Free Zones?
- Step 1: The client has to decide the legal type of their company like FZE / FZCO / LLC.
- Step 2: Client has to select the name for their company.
- Step 3: Client has to select an appropriate free zone for their business according to the business viability and feasibility.
- Step 4: Once the client decided the free zone, the client must submit the documents as per the Free Zone requirement.
- Step 5: As the last stage, the Free zone authority has to approve the application and provide the business license to the client.
Deciding the legal type.
As the initial step to form the company the investor has to decide the legal entity like;
- Free Zone Company (FZC).
- Free Zone Establishment (FZE).
- Limited Liability Company (LLC).
Only a few of the UAE free zones have the options to form Limited Liability Companies.
Trade Name Registration
Once the client has decided about the legal entity of the company which he wants to form, then he has to register the name of the company which is known as trade name registration. The suggested name should be approved by the UAE free zone authority also. While selecting the name, it should not be related to the name of a country or name of religion or name of any GOVT bodies etc. The name should not violate any morals of the public.
Application for a business license
Once the UAE free zone authority approves the trade name for the business, then the client can apply for the trade license. The documents required to incorporate the company differs from different UAE free zones. The basic documents required are the passport copy of the shareholder, which should be at least valid for more than six months. Some UAE free zones require a detail business plan and external approval which depends upon the business activity.
Once we submit the application, the UAE free zone authority will provide an application form where the shareholders have to sign and submit back. In some free zones, we can form the company remotely and in other free zones, the physical presence of the shareholders is required.
The UAE free zone authority will approve the application within 10 days and the concerned authority will issue the business license along with share certificate and memorandum of association.
Once the company is formed the shareholder can apply to the establishment card for the company. Establishment card means the link between immigration department and the company. Once the establishment card is ready, the client can apply for e-channel registration. Only a few UAE free zones require an e-channel registration. After completing the registration of e-channel, the shareholder can apply for visa or resident permit for the shareholders or for the staff. And once the shareholder receives the business license, they can open the corporate bank account with any banks in the UAE or outside the UAE.
Emirates Chartered Accountants Group houses Company Formation experts that deal with setting up businesses in the UAE Free Zones by assisting the clients to set up their businesses. Our Company Formation Team handles the complete process with strategic recommendations and negotiations with local stakeholders along with documentation formalities which shall be progressed in accordance with the UAE laws and its regulations.
To Set Up Business in UAE Free Zones
Mr. Viju Divakaran
Asst.Manager – Company Incorporation
Mobile: +971 55 4028899
Phone: +971 4 2500 290