About Dubai Free Zones
Free zones in Dubai have always been the preferred jurisdictions for business setup in the UAE, owing to the numerous benefits they have on offer. The initiative of launching free trade zones in UAE was taken up with the aim of diversifying the oil-dependent economy and creating business and investment opportunities in Dubai and other emirates. It is safe to say that free zones have been largely successful in attracting foreign businesses and thus have become sought-after destinations for business registration in Dubai.
Dubai Free Zone Benefits
With a host of advantages on offer, free zones stand out as the preferred choice for obtaining a Dubai trade license. Here are the best advantages of setting up a free zone company.
- 100% foreign ownership
- Tax benefits*
- Cost-effective business setup
- Strategic geographical location
- Proximity to seaports and airports
- Business-friendly framework
- Industry-specific support
- Provisions for training and mentorship
- *Subject to certain conditions
Dubai Free Zone Business Setup
Industry-Specific vs General-Purpose Free Zones in Dubai
While most free zones in Dubai are industry-specific, a handful of them are general-purpose and are open to a diverse range of business activities. For instance, Meydan Free Zone is general-purpose while Dubai Media City (DMC) is an industry-specific free zone and is mainly preferred by companies from the media and advertising sectors. One must bear in mind that most industry-specific free zones are also open to business activities different from the ones they mainly focus on. For business setup in a Dubai free zone, you must also consider factors such as location, cost, and the type of facilities available.
Business Setup Costs in Dubai Free Zones
The cost involved in forming a company is one of the major concerns for anyone looking to take up entrepreneurship. It is crucial to understand that there are several factors at play in influencing the costs of your venture. The first of these factors is the free zone you select. Each of Dubai’s free zones has priced the trade license differently. Usually, licenses are offered as part of packages that include visas. This brings us to the second factor i.e. the number of visas you opt for. It is crucial to factor in the number of visa quotas you are looking to opt for.
The duration of your license is another factor affecting the overall setup costs. Also, if you have leased an office space, the leasing costs will also be added to the expenses. Again, the type of workspace you select will vary in price. As an example, a flexi-desk will cost way lower than a private office.
The license price also depends largely on the type of business activities you select. In certain free zones, the license cost inflates as you add more activities. Lastly, some free trade zones require a minimum paid-up capital from your end.
License-Types Available at Dubai Free Zones
Free trade zones in Dubai are known to offer varied types of licenses. Usually, the license types depend on the industry the free zone caters to. It is also possible that two different free zones have different names for a similar type of license. Below, we have explained the most common types of licenses that can be generally opted for at most free zones in the Emirate.
License-Types Available at Dubai Free Zones
Here are the steps for free zone company registration in Dubai:
1. Trade name reservation
As the first step in applying for a Dubai free zone trade license, you must reserve a trade name for your company. Every free zone authority has predetermined naming conventions that your company name must comply with.
2. Signing and submission of the application form
You will sign the application form and submit it along with the following: Documents for individual shareholders
- Passport copy of the shareholder(s) and manager(s)
- Latest UAE entry stamp/visit visa copy
- Residence visa copy and Emirates ID of the shareholder(s) and manager(s) (for UAE residents)
- Address proof of the shareholder(s) and manager(s)
- Passport-sized photo of the shareholder(s) and manager(s)
Documents for corporate shareholders
- Memorandum of Association (MOA)
- Article of Association (AOA)
- Business license (for an existing company)
- Board Resolution
- Certificate of Incorporation
Note: All documents for corporate shareholders must be attested by the UAE Ministry of Foreign Affairs (MOFA) as well as the UAE Embassy in the country of issuance. Also, additional documents other than those mentioned above may be required for both individual and corporate shareholders.
3. Issuance of trade license
Upon reviewing and approving your application, the free zone authorities will issue your trade license, and with this, your Dubai free zone registration process is complete. You may then proceed with the visa application process (if applicable).
Legal Structures for a Dubai Free Zone Company
The permitted legal structures vary from one free zone to another. However, the most common types of legal entities that a free zone business can take up are:
Dubai Mainland vs Free Zone
A free zone company is mainly defined by the ownership benefits it offers. These companies are mainly preferred as they allow 100% ownership for expats. This means that such a venture does not require an expat to partner up with a local sponsor for owning the company.On the other hand, a mainland company may require a local sponsor/partner to own 51% of the company shares. Until recently, a mainland company mandated the presence of a local sponsor. With the recent changes in laws, these companies can also be wholly owned by foreign nationals.
However, all mainland companies are not eligible for 100% ownership. Only companies engaging in specific business activities can be owned entirely by a foreign national. Also, a mainland business license is issued by the Department of Economic Development whereas a free zone venture is issued a permit by the free zone authority itself.
Can a Free Zone Company Conduct Business in Dubai Mainland?
In general, a free zone company in Dubai cannot conduct business directly in the mainland. In cases where a free zone company wishes to do business in the mainland, it becomes necessary to obtain approvals from the free zone authority first. This can be followed by securing permissions from the Department of Economy and Tourism. Some of the ways a free zone venture can carry out mainland business activities: Acquiring services of a logistics partner for managing the movement of goods within the UAE. Opening a branch of the free zone company in the mainland.
To learn more about how to open a company in Dubai,
Popular Free Zones in Dubai
Below we have discussed some of the most sought-after free zones in Dubai. These jurisdictions cater to a wide array of industries that include aviation, F&B, oil and gas, information technology, etc. As mentioned earlier, free zones can be either industry-specific or general purpose.
Hala Business, your partner for business setup in Dubai, the UAE, not only makes the process hassle-free, straightforward, and budget-friendly but also ensures that you are choosing the right legal structure and jurisdiction for your company objective to run your business in the long run. Find here 5 steps for setting up a business in Dubai and the UAE
Select The Right Jurisdiction
Choosing the right jurisdiction for registering a company is the most important step of the whole business setup process. There are 3 main jurisdictions: Mainland, Free Zone and Offshore. Let Hala Business help you choose the right authority for your business setup in Dubai based on your business’s requirements.
Prepare Your Documents
The documentation processes of business setup are a crucial part and can be scary if you are from abroad trying to set up a company in Dubai or any other UAE jurisdiction. Our company setup consultants will ease the process of incorporating your business by taking care of all the complicated paperwork.
Get Your Business License
The next step of business setup in Dubai is to get a trade license. There is a high probability of making mistakes while processing your license because of pre-approvals, or Government Department permits if you are not aware of all the do’s and don’ts that can affect your licensing process. Our business setup experts will assist you straight through to start your company seamlessly from the comfort of your home. We will do all the paperwork and get approval from the required departments so that you can focus on your business operations.
Process Your Visa
Businesses can apply for employment permits for their workers; this process requires employers to submit their residence visa status within a time period of 30 days after the employee’s entry into the UAE.
Opening A Bank Account
The initial process of opening a corporate bank account as an overseas expat can be a slightly daunting process. Before reaching out to the UAE bank, we need to be assured about the checklist of all the documents required to fill out the forms accurately. We will assist you in maintaining a document file with the required checklist so that you are all set before approaching any UAE bank to open your business account.