Free trade zones are specifically designated zones which are aimed at enabling and promoting the growth of global businesses in the United Arab Emirates (UAE). They offer 100% ownership by foreign enterprises and there will never be any requirements for UAE nationals as local shareholders/partners along with other incentives like tax benefits/exemptions on applicable duties and more. With VAT (value added tax) being introduced in the United Arab Emirates (UAE), most free zones are classified as those providing exemptions to most business entities situated within them.
Non-UAE nationals looking to establish their business in the country should definitely consider free zones for their multifarious benefits. There are 35+ free zones spread throughout the country. Every free zone comes with its own regulatory authority and varying rules that have to be followed by all occupants.
Tips on Choosing Suitable Free Zones for your Business
- Business activity/operation type– Every free zone will have varying regulations for business operations that are allowed within the same. DMCC (Dubai Multi Commodities Centre) is one free zone for instance, offering 600+ activities including more than 20 sectors like commodities, gold, energy, diamonds, construction, FMCG, technology and more. DIFC (Dubai International Financial Centre) offers non-financial and financial activities alike. Choose your business nature carefully and then select a free zone which allows for the same.
- License Needs– This aspect is directly integrated with the business activity nature. Based on your business activity (primary), you will have to apply for the right license, choosing from a commercial/production/general trading/service license options. You may require applications for multiple such licenses, based on your business activities as well. The number of business activities permitted for your entity will vary from one free zone to another. DMCC for instance, permits 6 business activities with the same type of license.
- Capital Needs– For company registration in the country, share capital has to be deposited likewise. Minimum capital needs vary from one zone to another. You should learn more about this requirement before short listing a free trade zone. For example, Dubai Airport Free Zone requires AED 1000 as the minimum share capital threshold.
- Office Space Needs– You may lease/buy office space in these free zones. This depends on the employee count and business type. DMCC offers flexi desks between 20-30 square meters or 200-265 square meters along with offices covering several floors up to 2,000 square meters each for instance. Dubai Airport Free Zone offers various packages while Hamriyah free zone authority, for instance, provides more than 100 executive suites sized between 15 and 42 square meters with internet and conferencing amenities.
- Residence Visas– These visas will be issued by the requisite authorities to all those foreign nationals who wish to start their business in the UAE or join a company, etc. The number of residence visas applicable or any business will naturally depend upon the type of office facility. Every type has a limited visa number which may be obtained. This number will also vary across free zones in the UAE.
- Legal Entity Type– You may establish a business as FZ LCC or Free Zone Limited Liability Company or FZ Co (Free Zone Company) or even FZE (Free Zone Establishment). This legal entity will have specific restrictions pertaining to the shareholder count. Every free zone authority will have its own regulations on the legal entity types that are permitted for registration. For instance, the DMCC allows establishment of LLCs (limited liability companies) which may be newly setup organizations with multiple/single shareholders or fully owned subsidiaries of foreign/local companies.
These are some of the factors that you need to keep in mind while deciding on a free zone for your company in the UAE. For help with company incorporation, VAT registration, auditing, accounting, VAT filing and all other necessary procedures, GCC Filings is your best solution by all means.