Establishing a company in the free zone The United Arab Emirates is considered one of the most dynamic economies in the world thanks to its facilitating investment laws, infrastructure that meets international standards, strategic geographical location, and the absence of taxes on personal and corporate income, which makes it a global destination for business investment. In order for investors to avoid any legal complications in the future, all legal aspects must be considered before making any investment decisions. We will learn about establishing companies in the free zone through this article.
Steps to establish a company in the free zone
Here are general steps for establishing a company in the free zone in Dubai in terms of choosing the appropriate free zone in that you search and choose a free zone that suits your company’s activity and your commercial requirements, such as Jebel Ali, Dubai International Finance Center, or Dubai International Media City, in addition to the rest of the following steps. :
- Determine the type of company: Decide what type of company you want to establish, such as a joint stock company, a limited liability company, or a sole proprietorship.
- Submitting a commercial license application: Submit your application for a commercial license in the selected free zone, fill out the required forms and submit the necessary documents such as the application form, a copy of the passport, and personal photos.
- Determine capital: Determine the company’s required capital and deposit it into the company’s bank account at the Free Zone Bank.
- Obtain an office: Obtain an office within the free zone, whether ready or under construction, and ensure compliance with requirements for a commercial address.
- Signing contracts and agreements: Sign the necessary contracts, such as the lease contract and any other agreements with local authorities or with legal advisors if necessary.
- Obtaining licenses and permits: After your application is approved, the necessary licenses and permits will be obtained to start the company’s work.
- Registering the company in the commercial registry: Register the company in the local commercial registry of the free zone and obtain a registration certificate.
- Opening a bank account: Open a bank account in the name of the company at the Free Zone Bank or at any other bank operating in the region.
- Obtaining residence visas: You may need to obtain residence visas for employees and shareholders, depending on the need and instructions of immigration and passports in the free zone.
Remember, these steps depend on the chosen free zone and the type of company, and it is always best to consult a legal or business management consultant to ensure full compliance with Dubai’s legal and regulatory requirements.
The cost of establishing a company in the free zone
It was announced that companies in the free zone differ from companies in any other region. The free zone has many advantages that make it different from other places, as it is characterized by:
- Establishment fees: Includes the costs of registering the company and issuing a trade license in the chosen free zone.
- Office costs: The company must have an office address within the free zone, and these costs can be high depending on the location within the free zone.
- Consulting Firm Services Fees: If you intend to use the services of a consulting firm or attorney to assist with the incorporation process, you may face additional fees for these services.
- Annual renewal fees: Includes the costs of renewing the business license, the office, and any other administrative fees related to the continuity of the company.
- Labor costs: If you intend to hire employees in-house, you will need to factor in the costs of salaries and other benefits.
- Taxes: Companies in a free zone are subject to the local tax system, and these taxes vary depending on the business activity and the free zone chosen.
Remember that costs may vary based on the type of company and the free zone selected. It is always necessary to verify the exact costs and fees by contacting the relevant authorities in the free zone or through local consultants to get a comprehensive and accurate estimate of the total cost of setting up a company in Dubai.
The best places for real estate investment in Dubai
In Dubai, there are several areas that are considered excellent places to invest in Dubai real estate due to the rapid growth and economic dynamism of the emirate. Among the best places for real estate investment in Dubai include:
- Downtown Dubai: Downtown Dubai is one of the most popular areas in the emirate, as it is located near Burj Khalifa and Dubai Mall. This area provides investment opportunities in luxury residential apartments and commercial units.
- Arabian Ranches: Arabian Ranches is a modern area that offers a wide range of luxury villas and residential complexes, making it attractive to families and investors in luxury real estate.
- Dubai Marina: Dubai Marina is distinguished by its charming views of the Arabian Sea, and includes a wide range of apartments and residential buildings, making it an ideal area to invest in apartments with amazing sea views.
- Al Barsha: Al Barsha is an integrated area that includes residential, commercial and entertainment complexes, and offers various investment opportunities in apartments, villas and commercial stores.
- Jumeirah: The Jumeirah area includes a group of luxury neighborhoods such as Jumeirah Beach Residence and Jumeirah Park. These areas are located in strategic locations and provide advanced infrastructure and integrated services.
Choosing the right area depends on your investment goals, whether you are looking for luxury housing or a high investment return. It is always important to consult with local real estate experts to get advice that suits your needs and aspirations in real estate investment in Dubai.
Advantages of establishing companies in the free zone
Establishing companies in the Dubai Free Zone comes with many features and benefits that attract investors and companies. Here are some of these features:
- Full Ownership: Foreign investors can take full ownership of their companies without the need for a local partner, allowing them to have full control over operations and decision-making.
- Tax exemptions: Companies in free zones enjoy full or partial tax exemptions on profits, usually for a period ranging from 15 to 50 years, which contributes to increasing the companies’ net profits.
- Easy access to the regional market: Free zones act as a hub for international trade, providing opportunities to access the Middle East, Africa and Asian markets with ease.
- Advanced business environment: Free zones provide advanced infrastructure and business-supporting services such as business centers, logistics spaces, and advanced technology, making it easier for companies to carry out their work efficiently.
- Administrative facilities: Free zones provide simple and easy procedures for establishing and operating companies, including facilities for obtaining the necessary licenses and permits.
- Legal Protection: Free zones offer a stable and advanced legal environment, with commercial and civil laws that protect investors’ rights and encourage investment.
- Local employment and government support: Free zones facilitate the recruitment of local workers and provide job opportunities for the local community, in addition to ongoing government support for emerging and medium-sized companies.
To sum up, Dubai’s free zones are an ideal environment for establishing and operating companies, as they provide advanced infrastructure and a favorable legal framework, along with tax and financial incentives that enhance opportunities for growth and prosperity for companies.
Working in Jebel Ali Free Zone
Located in the Jebel District of Dubai, Jebel Ali Free Zone is the world’s largest and fastest-growing free trade zone, home to more than 7,000 international companies. Operating since 1985, each year it contributes more than 21% to Dubai’s GDP and is a pioneering model of a thriving economy.
Being a business hub, Jebel Ali Free Zone is the best place for investors, as it has facilitated the way for endless business opportunities that provide every need of all investors and stakeholders including customers and employees. And if you are planning to start a business in Dubai, Jebel Ali Free Zone is the perfect place to meet your needs.
In our company and as a business consultant in Dubai we help entrepreneurs to start all types of companies in Jebel Ali Free Zone JAFZA and all UAE. Because in our company we have the strongest team of Arab and non-Arab specialists who have excellent and renewed knowledge of the laws and regulations of the United Arab Emirates government and they have the experience and skills that make running your business and obtaining the required approvals from government agencies in the Emirate of Dubai easier, which saves you time, effort and money as well, and to start establishing your business in Jebel Ali Free Zone, you first need to obtain a license.
Types of license available in Jebel Ali Free Zone
- General Business License: This license allows the owner to import, distribute and store all items in accordance with the rules and regulations of Jebel Ali Free Zone. Being expensive, it provides access to a wider range of activities and a greater range of items.
- Commercial License: This license allows the holder to import, export, distribute and store items specified in the license.
- Service License: This license allows the investor to implement the services specified in the license within the free zone.
- National Industrial Licence: This license is designed for manufacturing companies that have at least 51% ownership or shareholding with Gulf Cooperation Council (AGCC) nationals.
- Industrial License: The owner has access to import raw materials, carry out the manufacture of specified products and export finished products.
Types of companies in the Jebel Free Zone
Jebel Ali Free Zone (JAFZA) is one of Dubai’s leading places to set up companies, and offers a wide range of types of companies that can be established there. Here is a table showing the main types of companies in Jebel Ali Free Zone:
| Company type | a description |
|---|---|
| Joint stock company | A company established with a capital contribution divided into shares, the shareholders bear responsibility in proportion to the capital. |
| Limited liability company | It provides protection to shareholders as they are not personally liable for debts and losses in excess of their share in the company. |
| Sole proprietorship | A business owned by one individual who is personally responsible for all debts and liabilities. |
| Company in a joint venture | A partnership between local and foreign investors, where the company enjoys the advantages of foreign direct investment. |
| Consolidated company | A grouping of several companies operating in the same industrial or commercial sector under one management of costs and resources. |
| New company | A small company established to experiment and test a new concept or product without the need for a large organizational structure. |
These types represent part of the options available in Jebel Ali Free Zone, and allow the company structure to be tailored according to the business needs and financial strategies of investors
What documents are required to establish in FZCO free zones
To set up a FZCO (Free Zone Company) in Dubai, the following documents are usually required:
- Application form: The free zone company application form must be filled out and signed. This form specifies the type of business and details of shareholders and directors.
- A copy of the passport: Every shareholder and director of the company needs to submit a copy of their passport, with additional photos as needed.
- Personal photos: Recent personal photos of each shareholder and director.
- Business Plan: Submit a detailed business plan explaining the company’s proposed activities and financial projections.
- Bank certificate: confirmation from the bank that the required capital has been deposited in the company’s bank account.
- Lease contract or ownership certificate: If renting a business space within the free zone, the lease contract must be submitted. If the company owns the business location, it must provide a certificate of ownership.
- Professional Certifications or Qualifying Certifications: Some activities may require professional certifications or special permits, which must be submitted with the application.
- Authorization if required: If there are agents or other employees applying on behalf of shareholders or directors, a valid authorization document must be provided.
Remember that the required documents may vary based on the type of free zone and the type of business activity. It is always advisable to check the exact requirements of the specific free zone before starting the company formation process.
The cost of establishing companies in Dubai’s free zones constitutes a strategic investment for the future, as these places provide advanced infrastructure and opportunities for strong economic growth. In addition to tax breaks and government support, relatively low set-up costs help attract investors and enhance the chances of sustainable profitability for startups and medium-sized companies. Thanks to this enabling environment, entrepreneurs can build a prosperous and sustainable future for their companies in Dubai.
Frequently asked questions about the cost of establishing companies in free zones
What are the free zones in Dubai and what is the difference between them?
Free zones in Dubai are areas designated for commercial and industrial businesses, such as Jebel Ali, Dubai International Finance Centre, and Dubai International Media City. The difference between them lies in the activities allowed and operational features available.
What are the tax advantages for companies in free zones?
Companies in free zones enjoy tax exemptions on profits, and the duration of these exemptions usually ranges from 15 to 50 years, which contributes to increasing the net profits of companies.
What are the legal guarantees and protection for investors in free zones?
Free zones provide an advanced legal structure that protects the rights of investors, with a legal framework that provides stability and encourages international investment.
What additional services can companies benefit from in free zones?
Additional services include government support, integrated logistics services, access to international business networks, and facilities in commercial and industrial activities.
