Learn how to set up a company in the Dubai Free Zone because in recent times, the UAE has become a major shopping center where people from all countries of the world flock to trade. Among the things that contributed to the rapid economic growth of the United Arab Emirates is the formation of companies in its free zones and the flexibility of the laws followed by the state. It helps organize and manage business and makes free zones the largest number of markets that everyone expects to go to. Free trade zones in Dubai and the United Arab Emirates in general are not subject to the laws of the Department of Economics that govern the operations of companies. The Dubai Free Trade Zone works to grant companies freedom of ownership, tax exemption, and exemption from fees. The benefits in free zones make it an ideal zone and an honorable face for international companies that do a lot of… Business. It is also useful that opening and establishing a business in Dubai and in the free zone does not require the presence of a partner or sponsor who is a citizen of the United Arab Emirates. Through this article, we will learn about establishing a company in the free zone in Dubai .
What is the free zone?
The Dubai Free Zone is a special commercial zone that enjoys customs and tax exemptions and facilities to attract investments. In free zones, foreign companies can own 100% of their shares without the need for a local partner, and benefit from privileged customs and tax treatment such as exemptions from corporate and profit taxes, and exemption from customs duties on goods. These areas also provide advanced infrastructure and dedicated government support, making it easier for international companies to do business and expand their activities. In the United Arab Emirates, there are many free zones such as “Jafza”, “Sharjah”, “Al Ain” and “Ras Al Khaimah”, each of which provides different benefits and facilities depending on the type of business activity and the company’s requirements.
Steps to establish a company in the free zone in Dubai
Establishing a company in the Dubai Free Zone includes basic steps to facilitate the process and ensure your compliance with legal and procedural requirements. Here are the general steps for establishing a company in the free zone:
- Determine the type of activity: Choose the type of business activity you want to engage in, as you will need to determine the activity that will reflect the nature of your company’s work.
- Choosing a free zone: Choose the free zone suitable for your business. Each free zone has its own features and facilities, and may focus on certain types of businesses.
- Choose the type of legal entity: Select the type of legal entity you wish to establish (such as a limited liability company or a branch of an existing company). Each type has different requirements.
- Prepare the required documents: You will need to provide basic documents such as passport, proof of address, description of the activity, and details of the founders and investors.
- Submitting a license application: Submit a license application to the relevant free zone authority, which may include submitting an application for commercial licenses and activity licenses.
- Choosing an office location: Choose the office location or office space that best suits your business. Free zones may provide different office options depending on the size and requirements of your company.
- Open a bank account: Open a business bank account in the company’s name, which you will need for money flow and financial transactions.
- Issuing licenses: After reviewing the application and documents, the Free Zone Authority will issue the necessary licenses to practice your business activity.
- Company Registration: Officially register the company with commercial registries and government bodies if necessary.
- Securing other licenses: If your activity requires additional licenses or permits, obtain them from the relevant authorities. If you need assistance with any of these steps or would like to know specific details about a particular free zone, I can provide more information.
Costs of establishing a company in the free zone
The costs of establishing a company in the Dubai Free Zone are affected by several key factors, which can vary based on the type of company, the specific free zone, and the size of the activity. Here are the main factors that affect setup costs:
- Limited Liability Company (LLC) : Often less expensive than joint-stock companies or branches of international companies.
- Branch of an international company : Costs may be higher due to additional registration requirements and costs associated with the parent company.
- Sole Proprietorship : Usually less expensive as costs are limited to the basic license and office.
- Choosing a Free Zone : Each free zone in Dubai has a different cost structure. Some areas offer incentives and discounts, while others may be more expensive based on their location and infrastructure.
- Zone Equipment : Free zones with advanced infrastructure may impose higher costs.
- Office Space : Office rental costs depend on its size and location. Smaller offices cost less, while larger or strategically located offices are more expensive.
- Equipment : Some free zones provide ready-made and equipped offices, which may affect the cost.
- Type of business : Some activities require special licenses or additional permits, which may increase costs.
- Number of activities : If the company includes more than one business activity, there may be additional costs for obtaining licenses for each activity.
- License fees : vary according to the type of company and activity. May include company registration fees and business licenses.
- Consulting Services : Legal and accounting consulting costs can affect total costs.
- Insurance : Some companies require additional insurance, such as civil liability or property insurance, which can increase the overall cost.
- Government fees : These include government licensing fees, company registration fees, and any other fees required by regulatory bodies.
- Operating expenses : include salaries, utilities, and administrative services, which can affect a company’s overall costs.
- Support services : such as translation services, legal consultations, and storage, which may be necessary depending on the company’s activity.
Determining the final costs depends on a combination of these factors, and it is important to conduct a comprehensive feasibility study and communicate with specialized consultants to obtain accurate cost estimates.
Advantages of establishing a company in the Dubai Free Zone
Establishing a company in the Dubai Free Zone offers many advantages that make it an attractive option for investors and businesses. Among these advantages:
- Full foreign ownership: Foreign investors can own 100% of the company’s shares without the need for a local partner.
- Tax breaks: Investors enjoy corporate and dividend tax breaks, which reduces operational costs.
- Customs exemptions: Goods and raw materials entering the free zone are exempt from customs duties, which reduces import costs.
- Ease of procedures: Free zones facilitate administrative procedures and licensing, which speeds up the process of establishing and operating a business.
- Advanced infrastructure: Free zones provide modern infrastructure that includes offices, warehouses and logistics facilities, which supports operational efficiency.
- Banking facilities: Free zones provide facilities for opening commercial bank accounts and providing appropriate financial services to companies.
- Suitable work environment: Free zones provide a professional and safe work environment, with various support services such as translation, legal consultations, and administrative support services.
- Free movement of capital: Companies can transfer profits and capital freely without restrictions on exporting or importing.
- Presence of an international community: Free zones provide an international community of companies and investors, facilitating business networking and cooperation between companies.
- Flexibility in expansion: Free zones facilitate expansion and growth, with the possibility of obtaining additional space or new investments according to the company’s needs
Types of companies in the free zone
Here is a table showing the different types of companies that can be established in Dubai’s free zones, with some basic details about each type:
| Company type | Description | Incorporation requirements |
|---|---|---|
| Limited Liability Company (LLC) | A wholly foreign-owned company with flexibility in operation and growth. | – Defining the business activity <br> – Submitting landlord documents <br> – Renting an office in the free zone |
| Branch of an international company | A branch of a parent company located outside the Emirates, operating under the same name and activity. | – Parent company registration documents <br> – Authorization to establish the branch <br> – Appointment of a local manager |
| Sole proprietorship | A company owned and operated by one individual. | – Submitting sole proprietor documents <br> – Submitting a license application <br> – Renting office space |
| Private joint stock company | A company owned by a limited number of shareholders, which requires a commitment to specific financial reporting. | – Submitting shareholders’ documents <br> – Drawing up a bylaws for the company <br> – Appointing a board of directors |
| Partnership company | A company managed by two or more partners, which can be international or local. | – Partnership contract <br> – Submitting partners’ documents <br> – Establishing a bylaws for the company <br> – Renting an office |
| Private limited liability company | Similar to an LLC but offers greater flexibility in ownership and operating structure. | – Submitting landlord documents <br> – Submitting a license application <br> – Renting an office <br> – Determining the activity |
These types represent the most common options in free zones in Dubai, and each type has different requirements and procedures depending on the type of activity and the size of the company.
The best company for establishing companies in the free zone
Itqan Company is considered one of the most prominent companies specialized in providing company establishment services in free zones in Dubai. Thanks to its extensive experience and in-depth knowledge of local regulations and legal procedures, Itqan provides integrated services that include all aspects of establishing companies, from providing advice on choosing the most appropriate free zone and legal entity, all the way to preparing documents, obtaining licenses, and providing logistical support. The company ensures a smooth and comfortable experience for its clients by efficiently handling all legal and administrative requirements, which helps speed up the incorporation process and avoid complications. Thanks to its commitment to providing high-quality services and strong infrastructure, Itqan is the ideal choice for investors seeking to successfully launch their projects in Dubai’s free zones.
Itqan Company focuses on providing customized solutions that suit the needs of each client, ensuring that all company establishment requirements are met accurately and effectively. Through its professional team, Itqan provides in-depth consultations on the required licenses, helps in selecting and registering suitable business activities, in addition to providing ongoing support after establishment. Itqan also contributes to facilitating the procedures for obtaining commercial licenses through its close dealings with government agencies and concerned bodies in the free zones. Thanks to its comprehensive and reliable services, Itqan guarantees its clients a suitable business environment conducive to growth and innovation, making it the ideal partner to achieve success in the UAE market.
In conclusion, establishing a company in the Dubai Free Zone is a strategic choice that has many benefits that enhance the chances of success and growth for the business. Free zones provide a favorable business environment through tax exemptions, customs facilities, and 100% foreign ownership, allowing investors to achieve their goals flexibly and efficiently. With specialized support from companies such as Itqan, which provides comprehensive services from legal advice to licenses and facilities, establishing a company becomes a smooth process built on strong foundations. Choosing the free zone in Dubai not only provides an ideal business environment, but also contributes to opening new horizons for expansion and growth in the regional and global market. So, if you are thinking of setting up a business in Dubai, free zones provide you with the perfect platform to launch yourself towards success.
Frequently asked questions about establishing a company in the Dubai Free Zone
What are the free zones in Dubai?
Free zones in Dubai are special commercial zones that provide customs and tax benefits, such as tax exemptions on profits and customs duties. These areas aim to attract foreign investments by providing a flexible and encouraging business environment.
How long does it take to establish a company in the free zone?
The time it takes varies depending on the type of company and free zone, but usually ranges from a few weeks to two months from submitting the application until obtaining the necessary licenses.
Is it possible to modify the company’s activity after incorporation?
Yes, the business activity can be modified after establishment, but this requires formal procedures and updating of licenses and documents related to the new activity.
Is it possible to rent an office in the free zone?
Yes, most free zones provide office and office space rental options that suit the size and nature of your business. You can choose from ready-made offices or customized facilities.
