Learn about 5 advantages when establishing a company in the Dubai Free Zone, because Dubai is considered a leading destination for establishing companies and commercial projects, thanks to its strategic location and the advanced services it provides to investors. One of the most prominent options available to entrepreneurs is to establish their companies in the free zones in Dubai, as these areas provide a set of unique features that make them an ideal environment for growth and success. In this article, we will review five main advantages of establishing a company in the Dubai Free Zone , starting from tax and customs facilities to continuous government support and advanced infrastructure. These features make Dubai an attractive choice for local and international investors seeking success in the business world.
5 advantages when establishing a company in the Dubai Free Zone
There are some advantages that every investor gets when starting a company in the Dubai Free Zone , which are as follows:
1. Tax exemptions
Dubai’s free zones are a tax haven for investors, as companies operating within them enjoy complete exemption from corporate income tax and value-added tax for periods of up to 50 years, which helps increase profits and reduce operational costs.
2. Full ownership by foreigners
Free zones in Dubai allow foreign investors to own 100% of their companies without the need for a local partner, which gives investors greater flexibility in managing their companies and making strategic decisions.
3. Commercial and customs facilities
Free zones provide advanced infrastructure and integrated logistics services, including customs facilities and transportation and shipping infrastructure, which facilitates commercial operations and accelerates the movement of goods and commodities.
4. A supportive regulatory environment
Companies in free zones enjoy strong government support and flexible and simple regulatory procedures, where investors can benefit from fast incorporation services and simplified procedures for registering companies and obtaining licenses.
5. Strategic location
Dubai has a distinct geographical location linking East and West, making it an international business centre. Free zones are located near major airports and ports, enhancing access to global markets and facilitating export and import operations.
These features make Dubai’s free zones an ideal choice for investors and entrepreneurs seeking to establish successful companies in an environment that supports growth and prosperity.
Types of companies in Dubai Free Zone
| Company type | Description |
|---|---|
| Sole Proprietorship | Wholly owned by one person, it is considered the ideal option for individuals who want to fully own a company. |
| Limited Liability Company (LLC) | It consists of two or more people and determines the responsibility of shareholders based on their shares in the company, and is considered flexible in some activities. |
| Private Shareholding Company | It consists of a limited number of shareholders, and its shares are not tradable in public markets. |
| Public Shareholding Company | They consist of a large number of shareholders, their shares are tradable on public markets, and usually require additional approvals. |
| Branch Office | It represents a branch of a main company, wholly owned by the parent company, and operates under the same trade name. |
| Limited Liability Company (LLC) | It provides limited liability to its owners, and is common in free zones targeting small and medium-sized activities. |
| Joint Venture | It consists of a partnership between two or more companies for specific purposes, in which the parties share the risks and profits. |
| Holding Company | It aims to own shares in other companies, and its role is focused on managing investments and monitoring performance rather than direct commercial activity. |
The available options vary based on the activities and scopes you intend to carry out in the free zone, so it is important to choose the type that suits your business goals and requirements.
Cost factors for establishing a company in the Dubai Free Zone
The cost of setting up a company in Dubai Free Zone varies based on several key factors. Here are the most important factors:
- Type of license and commercial activity
- Company license: The cost of the license varies according to the type of business activity, such as a commercial, industrial, or consulting license.
- Business: Activities with special requirements may require additional costs, such as activities that require special licenses or permits.
- Selected free zone
- Free Zone: Each free zone in Dubai has a different pricing structure based on its location, infrastructure and services it provides.
- Additional services: Some free zones may offer additional services such as logistics or business support, which can affect the cost.
- Company size and number of employees
- Number of visas required: The cost of visas for investors and employees may vary based on the number of visas required.
- Office Size: The cost of renting or purchasing office space depends on the size of the office and its location.
- Required capital
- Minimum Capital: Some free zones may require a minimum capital, which affects the overall cost.
- Registration and licensing procedures
- Registration fees: Includes application and company registration fees, which may vary depending on the free zone.
- Licenses and Certificates: Fees for obtaining the licenses and certificates required to start operation.
- Consulting and auditing services
- Legal and accounting consultations: Costs for legal consultations, accounting, and incorporation procedures may vary based on the type of services required.
- Office furnishing and work equipment
- Furniture and equipment: The cost of furnishing an office and its equipment depends on the size of the office and the quality of furniture and equipment needed.
- Government fees and taxes
- Government fees: May include fees related to government procedures, such as registration and document notarization fees.
- Taxes: Although there are tax exemptions in free zones, there are some fees that may be binding.
These factors vary from one free zone to another, and from one business to another, so it is always best to consult a local consultant to get an accurate estimate of costs based on your company’s specific needs and requirements.
Conditions for establishing a company in the Dubai Free Zone
Establishing a company in the Dubai Free Zone requires compliance with a set of conditions and requirements that vary slightly from one free zone to another. Below are the most important general conditions that must be taken into account:
- Choosing a business: The type of business activity that the company will undertake must be carefully determined. The activity must comply with the activities permitted in the free zone you choose.
- Availability of personal documents
- Passport: A colored copy of the passport for each founder and investor.
- Birth Certificates: You may need to provide birth certificates to investors if required by the free zone.
- Personal photos: Recent photos of founders and investors.
- Provide proof of address: Documents proving the residential or business address of the founders and investors must be provided, such as an electricity or water bill.
- Preparing a business plan: Some free zones may request the submission of a business plan that explains the company’s objectives, target market, and planned activities.
- Choosing a trade name: The company’s trade name must be compatible with local laws, and not be similar to the names of existing or previously registered companies.
- Minimum capital: Some free zones may require setting a minimum capital, which varies based on the type of activity and type of license.
- Appointment of a general manager: In some cases, a general manager must be appointed for the company who will be responsible for day-to-day management. May be asked to submit a CV and previous experience.
- Compliance with Local Laws: Compliance with local laws and regulations related to trade, labor, and taxes. Occupational safety and health requirements must also be complied with if relevant.
- Obtaining work visas: After establishing the company, work visas must be requested for employees and investors if necessary.
- Establishment and registration procedures: filling out and submitting the required forms to the responsible authority in the free zone, paying fees, and obtaining the necessary licenses and certificates.
Each free zone may have its own requirements, so it is always preferable to review the specific requirements of the free zone in which you intend to establish, and it is preferable to consult a legal advisor or a specialized company such as Itqan incorporation company to ensure compliance with all conditions.
How to establish a company in the Dubai Free Zone
Establishing a company in the Dubai Free Zone requires following a set of basic steps to ensure compliance with all local laws and regulations. Here are the main steps for establishing a company in the free zone:
- Choose the appropriate free zone
- Activity requirements analysis: Determine the business activities you intend to undertake and check which free zones suit your type of activity.
- Compare benefits: Compare different free zones based on the benefits and facilities they offer such as tax exemptions and logistics services.
- Determine the type of license
- Choosing the appropriate license: Select the type of license that is compatible with your activity, such as a commercial, industrial, or consulting license.
- Choose a company name
- Submitting a company name: Choose a name that is in line with the free zone registration standards, and avoid reserved or banned names.
- Name confirmation: Obtain name approval from the responsible authority in the free zone.
- Submit the required documents
- Prepare documents: Prepare the necessary documents such as passport, proof of address, and CV of the founders.
- Submitting the application: Submit the documents to the competent authority in the free zone along with the company establishment application form.
- Open a bank account
- Choose a bank: Choose a local bank and open a company bank account to facilitate financial transactions.
- Providing documents: Provide the required documents to the bank, such as articles of incorporation and licenses.
- Receiving licenses and certificates
- License review: After submitting the application and documents, receive the necessary licenses and certificates to conduct business activity.
- Office furnishing
- Choosing an office: Locate the office and see the rental options available in the free zone.
- Preparing the office: Equip the office with the necessary equipment and furniture to start work.
- Registration with government agencies
- Completion of registration: Register the company with the relevant government agencies and apply any additional procedures if necessary.
By following these steps, you can successfully establish your company in the Dubai Free Zone and benefit from the advantages it offers.
Establishing a company in the Dubai Free Zone represents a strategic step towards success and growth in a distinguished business environment. Thanks to the advantages offered by free zones, such as tax exemptions, full company ownership by foreigners, and customs facilities, Dubai provides an ideal platform for businesses seeking growth and expansion. In addition, free zones provide advanced infrastructure and integrated support services that contribute to facilitating establishment and business management processes. By understanding the steps and conditions associated with establishing a company in a free zone, investors and entrepreneurs can make informed decisions to ensure that their business goals are achieved efficiently. Benefiting from local expertise, and consulting specialists in this field, can have a significant impact in accelerating the establishment process and avoiding any potential obstacles.
Frequently asked questions about establishing a company in the Dubai Free Zone
What are the basic requirements for establishing a company in the free zone?
Basic requirements include submitting personal documents, choosing a business activity, obtaining the appropriate license, specifying a business name, and proof of address. Details may vary based on the selected free zone.
Can foreigners fully own companies in free zones?
Yes, in most free zones in Dubai, foreigners can own 100% of companies without the need for a local partner.
What types of licenses are available to establish a company in the free zone?
The types of licenses available include commercial, industrial, consulting, and service licenses. The type of license depends on the type of business activity you intend to undertake.
What are the costs of establishing a company in the free zone?
Costs vary based on the type of license, free zone chosen, company size, and number of employees. Costs include registration fees, licenses, office rental, and visas.
