Many overseas investors hesitate from investing in the UAE because of the compulsion of having a UAE local sponsors as a partner with 51% shares owned by them. That is why free zones have become a good option for the investors in the UAE, where 100% foreign ownership is allowed. A free zone is an specially approved economic zone which has tax-free status and have low trade barriers where goods can be manufactured, imported/exported, handled, or reconfigured without paying any customs duty. Free trade zones are generally located in strategic geographical locations like national borders, international airports and major seaports, to maximise trading advantages.
UAE free trade zones offer many facilities to overseas corporates, like the facility of single-window operations, no lengthy processes of documentation, and 100% foreign ownership. There are about 44 free zones located all over UAE that have attracted overseas investors and corporate personnel in the form of 200,000 companies contributing to the GDP growth of UAE. The free zones differ in their nature of business, incorporation costs and documentation requirements, but the basic requirements are the same.
All the UAE Emirates have set up free trade zones to boost the economy in the region to get foreign direct investment, and drive growth. Free trade Zone Authority is the government body that issues business licenses to overseas companies and investors in UAE free trade zones. The total number of free zones across the UAE are mentioned below:
There are many advantages of starting a business in the UAE. But the UAE free trade zones offer some additional benefits if an investor decides to set up a company in one of the free trade zones. They are:
Company setup in UAE free trade zones is easy and stress free process, as the UAE government has eased the business formation process to draw maximum overseas investors with the minimum investment.
There are mainly three types of entities one can set up in the UAE free trade zones, namely,
Business formation in UAE free zones is incomplete without procuring a business license. Following types of business licenses can be obtained by applicants in the UAE free zones:
Allows investors to trade in all kinds of commodities.
Only single trade activity is granted under this license ie. Foodstuff trading, hardware trading etc.
Under this license company can carry out numerous kind of services depending upon the activity taken by the company ie. Management consultancy, corporate services, accounting services, auditing services etc.
This license grants us the permission to import raw materials, manufacture goods, and export products, across the world.
Investors can get this license to get warehouse on lease for distribution, packaging, and storage of goods
Free zones are outside the jurisdiction of the UAE Mainland and have rules and regulation set by free zone authorities. These free zones give an excellent business opportunity for overseas investors and provide a free working environment and smooth business setup process. The process is very simple.
Determine which type of company you want to set up in any of the free zones. The capital requirement for such company depends upon that particular free zone where you want to setup a company.
After deciding the type of company, choose a trade name for your company.you have to cross-check with the free zone department about the permitted trade names.
After registering a trade name in the free zone authority, you have to apply for a trade license. The type of trade license depends on the activity of your business. You need to submit the valid documents while applying for the trade license.
Free zone authorities give numerous options when it comes to choosing office space.You can buy or lease office in free trade zones.
After getting the initial approval and name approval, register your company at the online portal, and get your trade license. It will only take 1-2 weeks to complete the process. Once you get the trade license, you are good to start your business activities.
Businesses registered outside the UAE free zones cannot be owned solely by a overseas investor as there will be a local sponsor who will have 51% stakes in the company , which is one of the primary reasons why investors opt for UAE free zones for business investment. Apart from this, there are many benefits for investors setting up their company in free zones. There are a few reasons listed below as to why one should set up company in the UAE.
A company in the UAE free zone is permitted to engage in a variety of business activities with multiplicity in the type of licenses. The only thing is UAE free zone companies are not allowed to engage in is the insurance business.
A free zone company is protected by the privacy adopted in the UAE about the identity of its investors and board members.
A free zone company is allowed to have a registered office at the location of the free zone area it is licensed under. Additionally, one can open a bank account anywhere outside the UAE.
It takes 3-4 days to complete the UAE free zone company setup process, and approximately 10 working days to obtain a UAE residence visa when an applicant contacts agility global consulting for further assistance. We are a experienced organization , well informed of the company formation procedures and regulations in the UAE, and have been Assisting companies gain a foothold in the United Arab Emirates since 2006.
Free zone business set up in the UAE is benefitting, with tax exemptions, lower setup cost, business-friendly policies, and hassle-free processing. If you are in search of a honest and reliable consultation to smoothen your company formation process in the UAE and launch your dream business into action, contact us for assistance – we’ll be glad to help!