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Tag: Dubai Free Zone Company Formation

  • Key Benefits of Free Zone Company in Dubai

    Key Benefits of Free Zone Company in Dubai

    Dubai has always led by example when it comes to setting standards in the economic market. The zero-tax policy and easy-to-navigate rules and regulations, set global benchmarks for online and offline businesses, be it LLC or Import/Export Business. Therefore, it is evident that the UAE came up with the concept of free zones to regulate a higher amount of business reaching the mainland via a free zone business setup in Dubai. The best part is that there are countless benefits of a free zone company in Dubai when you choose the right structure and jurisdiction.

    In fact, there has never been a better time for free zone company formation in Dubai. Over the years, the UAE has established itself as a hub for entrepreneurs to excel in the world of business. The UAE is now one of the top countries for business set up worldwide.

    Furthermore, the UAE has hit various milestones over the years. The IMD World Competitiveness Ranking 2021 ranks the UAE as the 9th most competitive economy in the world. Additionally, it also ranks 6th in Europe, Middle East and North Africa regions. Not to mention, UAE is one of the first countries to have bounced back since the onset of the pandemic.

    In addition, the country has gone through great lengths to adopt innovative methods to keep up with the ever-evolving industry of business and become a premier business hub itself. Furthermore, the UAE has set up free zones specifically to accommodate foreign investors by providing them with various free zone benefits for business setup.

    Let’s move ahead and get to know the concept of owning businesses in the free zone areas of Dubai better, the advantages of free zone business as well as the information on the Dubai free zone license cost, for those interested in setting up a business in one of the most profitable markets in the world, i.e., Dubai.

    This blog will enlighten you on everything you need to know about the benefits of a free zone company in Dubai.

    What is a Free Zone?

    Free zones are geographic areas within the UAE where goods, services and commodities are traded without the intervention of strict customs regulations. The objective of these special economic zones is to benefit expatriate investors in the UAE. These free zones provide 100% ownership to foreign investors, thus boosting international businesses. Additionally, free zone company formation costs are highly affordable, and this is among the most popular Dubai free zone benefits. 

    Jebel Ali Free Zone (JAFZA) is the first free zone to be established in the UAE in 1985. This free zone has been one of the key players in boosting the country’s economy and is, therefore, the flagship free zone of Dubai Ports (DP) World. It is strategically located near the 7th largest container port named Jebel Ali Sea Port. This makes it the ideal free zone for import and export of goods.   

    Most free zones generally deal with trading, service and industrial sectors. However, there are free zones in the UAE that are similar to JAFZA and cater to specialized industries or sectors. Some such jurisdictions include: 

    • Dubai Healthcare City (DHCC) for health and wellness industry
    • Dubai Internet City (DIC) for tech industry
    • Sharjah Publishing City (SPC) for printing and publishing industry
    • Dubai Multi Commodities Center (DMCC) for trade and commerce industry
    • Dubai CommerCity for e-commerce industry
    • Fujairah Creative City for creative industry
    • Dubai International Academic City for education industry
    • Dubai Outsource City for outsource and shared services industry

    Currently, there are about 45 free zones in the UAE. Free zones are also home to over 150,000 companies around the country. As time progresses, this number is on the rise with the UAE introducing new free zones almost every year.

    Free zones in the UAE and Dubai are governed by a special framework of rules and regulations which are applicable to a concerned free zone. The respective free zone authority manages and regulations various free zone operations in Dubai. These jurisdictions also operate outside the federal laws and regulations of the Ministry of Labor.

    Free zones in the UAE are usually attached to a port. Free zones are also ideal for freelancers looking to venture into the world of business but do not want to settle with a single company.

    Dubai Free Zone Company Benefits

    First and foremost, free zones in Dubai are basically geographic areas within a country. In these areas goods, services, and commodities can be traded without the intervention of stringent custom regulations. For most of the free zone business setup in Dubai, companies are taxed minimally or sometimes even fully exempted. 

    This encourages economic activity and a higher rate of doing profitable business without worrying about taxes and capital revenue to be paid to the administrations. Each free zone in Dubai Mainland is an autonomous entity with its own free zone authority. This authority governs, handles registration, and issues licenses within the premises of that free zone.

    The free zone business setup in Dubai was intended to act as international business hubs for companies conducting businesses outside the UAE since they were not initially licensed to operate within the rest of the UAE. Although during the initial phase, most of the free zone companies were involved in import and re-export, though now most of the companies run business within the UAE and GCC through local distributors and traders.

    Free zone business setup in Dubai offers the most fertile ground for setting up industries equipped with state-of-the-art infrastructure, duty, and tax exemptions, commendable business opportunities coupled with flexible government policies, and facilities that make the experience of running a business look seamless.

    To summarize, business investors enjoy the following free zone benefits:

    • 100% foreign ownership of business: Free zones permit foreign investors to get 100% ownership of their business.
    • 100% Repatriation of capital and profits: Free zone companies can repatriate all their profits to their home country. This gives them the freedom to transfer 100% of their capital to their country of origin without any requirements.
    • 0% Corporate Tax: The UAE law states that companies that set up a business in the UAE do not require to pay corporate tax out of their business revenue, thereby enabling you to keep all your profits.
    • 0% import or export tax: Unlike the mainland, free zones are exempt from all customs duties.
    • Strategic location: Dubai has world-class telecommunication, trailblazing financial intercessions, ultramodern industrial infrastructure, e-governance system, and service sectors. The location of the free zones makes for a highly cost-effective living.
    • Global Connectivity: Dubai has a multi-national community and provides opportunities for you to connect with a global business community.
    • Range of business activities: Free zones give you the freedom to undertake a range of business activities.
    • Time-efficient process: The entire process of obtaining a license is fairly swift and easy.
    • Convenient Registration: Dubai gives you the ability to register from the comfort of your home. You can send all the required documents to the free zone without being physically present for submission.
    • No Currency Restrictions: One of the critical benefits of a free zone company is no restriction on the currency. Currency rules are government-imposed limits on the exchange of foreign currencies. In UAE free zones, there are no currency restrictions of any type. Therefore, this facilitates hassle-free financial transactions.
    • No logistical Issues: Free zones in the UAE have several warehouses and sufficient office space. Free zones in the United Arab Emirates are great for SMEs and start-ups. In addition, the procedures for forming a company in a free zone are easy and straightforward. In comparison to other countries, you can complete the licensing procedures in a quick time. Moreover, the immigration facilities associated with UAE-free zones are efficient, saving time.

    Various company structures in the UAE: 

    • Free Zone Establishment (FZE)- Single shareholder 
    • Free Zone Company (FZC)- Two or more shareholders 
    • Branch of a foreign company  
    • Limited Liability Company (LLC) 

    How Much Does It Cost to Set Up a Free Zone Company in Dubai?

    One of the most salient features is that one can set up a business in return for an extremely low cost in the Dubai free zone. And, while the registration fees are relatively low, the cumulative value will not cross over AED 30,000 even once all the other expenses are added in. 

    The cost of the license in the Dubai free zone for attaining trading licenses ranges from AED 10,000 to AED 20,000 per annum. This is based on the number of activities or services that one wishes to enlist within its business model.

    Thus, these figures are subject to change and are only a tool to showcase the minimal cost of doing business in a Dubai free zone. Furthermore, these numbers encourage businessmen to set up business in the Dubai free zone. You can leave the headache of handling license costs and attaining them to the business professionals at Shuraa!

    Paperwork Required for Company Formation in the UAE Free Zone

    You must submit the documents mentioned below to set up a free zone company in the UAE without violating any compliance or legal norms: 

    • Trade name reservation document
    • Colored photographs of the applicant
    • NOC from the local service agent
    • Registration certificate and contract of association
    • Passport copies of all business partners
    • Business plan and personal information sheet
    • Lease agreement document
    • External approvals based on your business’s nature and legal structure

    Connect with Shuraa Business Setup 

    Free zone company setup is without a doubt one of the best decisions an entrepreneur can make. This is because UAE free zones offer several benefits to entrepreneurs looking to venture into the world of business in the country. In addition, the benefits of a free zone company in Dubai overshow a few limitations.

    There are many agencies that are working hard day and night to provide the most dependable local sponsors that align perfectly with the goals and ambitions of the company. The best agency in Dubai is Shuraa Business Setup.

    Shuraa is one of the leading business setup companies in the UAE. For over 26 years we have been helping entrepreneurs form and maintain their businesses in the country. We assure you that the entire process of your company setup runs smoothly. Our expert consultants will guide you through the entire process from registering your business, understanding free zone license cost, all the way to the process of obtaining approvals from the authorities.

    Contact our expert consultants to learn more about free zone company formation in Dubai or the rest of the UAE. Call us at +97144081900 or send a WhatsApp message on +971507775554. Additionally, you can also drop in an email at info@shuraa.com and get your queries answered in no time.

  • A detailed guide on obtaining a free zone industrial license

    A detailed guide on obtaining a free zone industrial license

    Obtaining a free zone industrial license is a great way to enter the booming industrial sector in Dubai. Dubai has adopted various innovative methods to boost its economic growth. As each day progresses, the city takes 10 steps further, breaking new grounds in its economic sector. This is just one of the few reasons why starting a business in Dubai is an exemplary choice for both, budding entrepreneurs and established ones.

    Furthermore, company formation in free zones makes for a very ingenious choice. This is because the owner not only gets 100% ownership of their business but can do so at a cost-effective amount. 

    This blog will enlighten you on everything you need to know about obtaining your free zone industrial license in Dubai.

    All you need to know about free zone industrial license

    Let us begin with what a free zone industrial license actually is. Entrepreneurs who opt for a commercial activity that is of an industrial nature can obtain this license. For instance, any company that involves the use of factory equipment such as manufacturing chocolates on a commercial level will need an industrial license.

    Another example is a company would require an industrial license is when it is involved in the production or refinement of chemicals on a large scale.

    It is also important to note that the rules and regulations for obtaining industrial license may vary depending on the emirate your factory is based in. Such as in the case of Dubai, there is a requirement to have both, a physical office as well as a warehouse facility.

    The following are some sectors that require an industrial license:

    • Manufacturing of food and beverages
    • Manufacturing of textiles
    • Oil refineries
    • Chemical facility

    There are also various prerequisites that an investor needs to accomplish in order to apply for a Dubai free zone industrial license. These are listed below:

    • Office Space: You will require to have a physical warehouse and an office space in Dubai. A virtual office will not be acceptable in this case.
    • Number of employees: In an industrial space, you will require to have a certain number of employees in your company depending on where you set up.
    • Electricity & Water: Depending on which area your facility is located in, you will have to contact Dubai Electricity and Water Authority (DEWA) to upgrade the supply of water and electricity voltage for your facility.
    • Transport: If your factory is located on the outskirts of Dubai, it may increase the amount spent on transportation of the raw materials and products. Fortunately, most free zones in the UAE are strategically located near seaports and airports, aiding in any transportation needs.

    You can always renew your industrial license as long as your company’s lease agreement is valid.

    Advantages of obtaining a free zone industrial license

    • Full ownership of business: Free zones permit foreign investors to get 100% ownership of their business. 
    • Full profit repatriation: Free zone companies can repatriate all their profits to their home country. This gives them the freedom to transfer 100% of their capital to their place of origin without any requirements. 
    • 0% corporate tax: The UAE laws state that companies do not require to pay corporate tax out of their business revenue, thereby allowing you to keep all your profits.  
    • 0% import or export tax: Unlike mainland, free zones are exempt from all customs duties.
    • Strategic location: Dubai has world-class telecommunication, trailblazing financial intercessions, ultramodern industrial infrastructure, e-governance system, and service sectors. The location of the free zones make for highly cost-effective living.
    • Global Connectivity: Dubai has a multi-national community and provides opportunities for you to connect with a global business community.
    • Range of business activities: Free zones give you the freedom to undertake a range of business activities that fall under industrial license and more.
    • Time-efficient process: The entire process of obtaining an industrial license is fairly swift and easy.
    • Convenient Registration: Dubai gives you the ability to register from the comfort of your home. You can send all the required documents to the free zone without being physically present for submission.

    Steps involved in acquiring an industrial license

    • Submission of the application with the business plan. 
    • Finalization of the preferred warehouse in line with the business activity. 
    • Environmental approval
    • Application of the license
    • Application for visa

    Documents needed to apply for Dubai free zone industrial license:

    • Business plan
    • Passport copy
    • Visa copy
    • Investor’s profile (depending on the activity)

    Obtain your free zone industrial license now with Shuraa

    Shuraa ensures that the entire process of obtaining your free zone industrial license runs smoothly. Our business setup consultants will guide you through the entire process from regulatory requirements, understanding free zone license cost, all the way up to the process of obtaining approvals from the authorities. 

    Contact our expert consultants at +97144081900 or send a WhatsApp message on +971507775554 to get started. You can also drop in an email at info@shuraa.com and get your queries answered in no time.

  • Why Dubai LLC structure in free zone is ideal for company setup

    Why Dubai LLC structure in free zone is ideal for company setup

    UAE has made a name for itself amongst all of the Middle East to be one of the countries with a large number of free zones for conducting businesses. With an abundance of opportunities and benefits, UAE has without a doubt attracted investors and entrepreneurs from all over the globe. 

    One of the most desirable factors of setting up a company in the UAE is the various structures of companies and benefits that come with it, particularly Free Zone Limited Liability Companies (FZ LLC). In this blog, we will explore what an LLC business structure is, its benefits all the way up to the differences between mainland and free zone to set up your company with the LLC structure in a free zone in Dubai and other emirates.

    What is a limited liability company in a free zone?

    A free zone establishment (FZE) or free zone company (FZC) is a limited liability company that is formed and governed by the rules and regulations of the free zone in which it is established. 

    There are two company structures for free zones businesses: Free zone establishment limited liability company (FZE LLC) and free zone company limited liability company (FZCO LLC). The feature of FZ LLC is that it has a single shareholder (single member LLC), unlike FZCO LLC where one can have multiple shareholders.

    Benefits of LLC structure in a free zone:

    One of the main benefits of having an LLC company structure is that it allows the shareholder of the company to be protected from personal liability, debt and more that may occur with the operations of the company.

    An LLC structure in a free zone in Dubai and other Emirates would also mean that you could only suffer losses up to the amount you have invested in your company and not any more than that. Therefore, LLC is a business that offers flexible ways to manage your profits and losses without being personally liable for the entire gains/losses. There are various other benefits of having an LLC business structure in a free zone including:

    • 100% foreign ownership: Foreign entrepreneurs can benefit from having complete ownership of their company with no local partner. However, you will need a local sponsor to whom you will be required to pay a mutually agreed annual fee.
    • Full repatriation of capitals and profits: Free zone companies can repatriate all their profits to their home country. Giving them the freedom to transfer 100% of their capital to their place of origin without any requirements.
    • No personal, corporate or income tax
    • Exemption from all import and export duty
    • Convenient recruitment and cost – effective workforce
    • Range of business activities: Free zones support a range of business activities. This makes it easy for individuals to connect and network.
    • Numerous options of facilities: There are various options for facilities you can choose for your business setup. This includes flexi-desk facilities, standard offices all the way to warehouse facilities.
    • UAE residence visa for 3 years 

    LLC company formation and licenses offered:

    When considering LLC structure in a free zone in the UAE, unlike mainland, it enables you to opt for an LLC structure regardless of the type of license you have. You will still have the protection of having a limited liability company LLC structure and not suffer any setbacks in terms of liabilities, unlike when you have a sole proprietorship where you could suffer 100% loss. The types of licenses you can have with LLC structure include:

    A free zone LLC structure is suitable for clients looking to provide services or obtain a professional license. Professional license in a free zone enables you to conduct business in local markets without the concern of debts or liabilities that could carry forward with your business.

    There are about 45 free zones that offer a structure of LLC in Dubai and other emirates.  The free zone that is most suitable for LLC structure for your company would depend upon the nature of your company such as the business activities, nature of the facility, number of visas and more. 

    LLC formation on mainland and on free zone:

    LLC company formations are usually formed on the mainland. Mainland companies with LLC structure would require 51% ownership to be given to a local sponsor while 49% is owned by the foreign expat.

    This is however not the case with free zones LLC company structure where the expat has the opportunity to have 100% ownership of the company without the need of a local sponsor. If you choose to have more partners in an LLC structure in a free zone, you are given the choice to choose how your shares are divided and do not need any other individuals in your business that you do not require.

    The similarities between a mainland LLC company and a free zone limited liability company is that you will still have the same protection of the LLC structure that would enable you to have. However, not all free zones have LLC structures.

    What’s the Difference between LLC and FZE in the UAE?

    Limited liability companies and free zone establishments have their set of benefits and limitations. Here, we compare them on various grounds to make it easier for you:

    1. Business Scope

    A key difference between LLC and FZE is that each has authorities that have its own set of rules and protocols. One common restriction imposed on businesses is that they’re only permitted to have an operating agreement within their designated free zone. It mainly refers to commercial licensing. Professional licenses can still work in the local market if they want to. 

    LLCs are free to trade independently with the local marketplace, any free zone, or even outside the UAE. The same applies to all commercial and professional business licenses.

    2. Office Space

    A free zone limited liability company license can be applied for with or without a physical address. For a minimum of 5 hours per week, administrations authorize the use of flexi desks or smart office spaces. Business Bay, Media City, and JLT are all good places to look for offices. 

    A minimum of 200 square feet of office space must be leased out yearly to qualify for an LLC license. Upon registration, the certified tenancy contract must be given to the Department of Economic Development (DED). The DED will then grant the LLC license.

    3. Authority Approvals

    A free zone limited liability company is managed by the authority in charge of it. By presenting the required documentation, you must obtain the necessary authorization from relevant departments. External approvals are usually not required unless a specific activity necessitates them. Standard permits from agencies such as the Department of Economic Development, the Ministry of Labor, and the Ministry of Immigration (MOI) are required for an LLC license. 

    Individual and corporate shareholders may have different documentation. It is occasionally necessary to obtain approval from external authorities. Education-related licenses, for example, are to be approved by the Knowledge and Human Development Authority (KHDA).

    4. Visa Eligibility

    Another vital aspect of free zone vs. LLC Dubai is visa eligibility. The number of visas available to free zone enterprises is limited. They are usually limited to one to six visa packages. If a corporation requires more, they must rent a physical area within their designated free zone. 

    The Ministry of Labor (MOL) issues LLCs a digital quota for visa candidacy. The quota is determined by the size of the office. One visa is granted for every 80 square feet of office space, with the number of visas available growing as the size of the office grows. Companies might request a separate quota for employees who don’t work in the office. 

    Get started in the world of business with Shuraa

    Getting your company formed all by yourself can be quite taxing and time-consuming. When starting a business in the UAE, there are various factors and steps that are involved in the process of business setup. For more in-depth information about the business structure of free zone LLC in Dubai, contact Shuraa Business Setup – one of the leading providers of company formation solutions.

    Our free zone specialists at Shuraa will guide you through the entire process and get you started with setting up your company in the UAE. You can get in touch with our specialists by contacting us on +971 44081900 or drop a WhatsApp message on +971 507775554. You can also email your query to info@shuraa.com.


    Author
    Seema Sasidharan
    Corporate Advisor | Free Zone Specialist