Last updated on March 15, 2022
Dubai freezone company formation
Free zone known as free trade zones; or special economic zone; or free tax zone. Free zones are special area within UAE; where expat investor can hold 100% of ownership of his business unlike mainland area. This make free trade zone the most hot site in the UAE; that is for business setup. The govt of UAE has given full authority to free zone to encourage expat; so that to bring their business in this region. UAE govt is doing the best to make their free zone area the most important trading hub of the globe.
In UAE there are almost 44 Free zones. Major Free zones are hosting more than 5000 companies. Even investors can consider Free Zones of UAE a treasure house around the world. Political stability, law and order, life security, fast economic growth; as well as tax haven status, and comfort to do business are the key charms of UAE.
Dubai freezone Company setup
As a leading business consultant in Dubai as well as UAE. Dubai business centers specializes in Dubai freezone company setup and in all free zones of UAE.
We are the business consultants; as well as advisers for corporate; as well as individuals round the world who want dubai freezone company setup; or want to expand their existing business in free trade zone. We have local expertise and global presence to advise on the best possible structure; reduce the risks and guide them with the right procedure; that is to start up a business in Dubai or any free zone.
We are not just providing incorporation services; but also offer business support service.
Type of Dubai freezone company formation
in freezone company the following legal forms are available.
- Branch of Foreign Company
- Free Zone Establishment
- Free Zone Company
Benefits of Dubai freezone company incorporation
- Dubai free zone allows 100% foreign ownership for all type of activity.
- No corporate tax for fifty years; that is 0% for any kind of activity.
- Company formation in Dubai Free zone is duty free entity; that is on goods importing into the free zone.
- Dubai freezone company formation offer you an easy procedures for work permits and Visa.
- Dubai freezone company incorporation enables you to own the properties
- Renewal fees for Dubai freezone company formation are very low.
- Business privacy is strictly maintain in free trade zone.
- Dubai free zone company are also allow to open bank account in Dubai.
- Also there is no restriction for doing more than one activity
There are thousands of company operate in Dubai Free Zone. So free trade zone has produce a lot of employment for both Nationals as well as for expat in UAE. The idea behind the Dubai free zone is to offer to keep the 100% ownership; that is in company formation in dubai free zone. And also free trade zone offer to form company without the need of a UAE local. And the most important thing is that each free trade zone has its own rules as well as regulations. Dubai freezone company setup procedure are vary between Free trade zones.
Dubai freezone company setup Procedure
- Determine the type of license for Dubai freezone company formation
- Determine a legal structure Dubai free zone company setup
- Confirm the business activities for Dubai free zone company formation
- Verify the fees and other charges for Dubai freezone company setup
- Confirm the business facilities for Dubai free zone company formation
- Creating of business plan for Dubai free zone company setup
- Submit application and documents for Dubai free zone company formation
- Secure the preliminary approvals for Dubai free zone company setup
- Payment for Dubai freezone company setup
- Sign the agreements and other documents for Dubai free zones company
- Receive your License for Dubai free zone companies
Now let us have a close look at the above steps for Dubai freezone company setup
Determine the type of license for Dubai freezone company formation
First of all in the first place; the first step in Dubai freezone company formation is to decide the license type. In common, Free Zones offer the following types of business license;
Free Zone General Trading License
This type of license for Dubai freezone company formation allows you to deal with almost all types of goods; with the exemption of bane goods and products that need special approvals. Normally this type of license is relatively more expensive than the trading license.
Free Zone Trading License
This type of license for Dubai freezone company formation allows you to carry out trading activities. Most of the Free Zones allow trading in around 3 categories of items under a trading license.
Free Zone Commercial License
This type of license allow you to do business such as repairing, workshops.
Free Zone Industrial License
This type of license allow you to do manufacturing, packaging, processing and assembling.
Free Zone Consultancy / Service License
This type of license allow you to do consultancy. Most of the legal firms choose a consultancy license for Dubai freezone company formation.
Determine a legal structure Dubai free zone company setup
The legal structure of dubai free zone companies varies according to the number and nature of the partners involved. Documentation required, costs etc also dubai free zone companies change depending on the legal structure of the company. Documents needed for a corporate partner (or a branch entity) would be different from those required for a single shareholder.
Confirm the business activities for Dubai free zone company formation
Not all Dubai free zones allow all type of activities. Some of Dubai free zones specialize in certain activities. So it is important that you check that your propose activities are allow in the Free Zone. Moreover, there are restrictions over the number activities allowed.
Verify the fees and other charges for Dubai freezone company setup
This is the most important step in Dubai freezone company setup. Many investors who wish to set up their company in one of Dubai free zone; go for the cheapest option available base on the clear costs. They don not know the hidden cost; which is to be paid for the services that are essential for the survival of their business. The total cost of Dubai free zone company setup can be categorize into two parts.
- First year cost for Dubai freezone company setup
- Yearly renewal costs for Dubai freezone company formation
Some of Dubai free zone offer packages that are cheaper than the normal company set up costs. Investors fall victim to these packages offer by these free trade zones; because you have to pay the package charges every year. The normal yearly renewal cost can be cheaper than the cost of the packages. In addition, also most of the packages consist of only a business license and not office premises. This may not be very beneficial if you are serious about your business.
If you are ready to spend some time and resources to collect the data; as well as discover the hidden charges and test the real costs for Dubai freezone company setup. It may take many resources, including multiple visits to various free trade zones; asking the right questions, collecting the cost details etc. The most difficult part would be to discover the hidden cost. For starters, it would be ideal to appoint a business setup consultants in Dubai to do this job for you.
Confirm the business facilities for Dubai free zone company formation
Do not assume that all Dubai free zones offer all types of business facilities. However most of the free zones offer office space, warehouse etc availability can also be an important factor. So you need to consider the availability of the important facilities; that is provide by the Free Zone before starting Dubai free zone company formation.
Creating of business plan for Dubai free zone company setup
A proper business plan is requires for Dubai free zone company setup. As a matter of fact, your business plan will not just serve; the purpose of guide line for you. But also it is the part of your business incorporation. You would also be requires to submit your business plan to Dubai free zone; that is for approval before you get the license to operate.
We feel that the importance of a business plan needs to be mention here. Many investors make the mistake of not preparing a business plan; that is for Dubai freezone company setup. A business plan helps you to set your business targets and milestones. A proper business plan also assists you to keep trajectory of the performance of your business. So a business plan is not just only for meeting the requirements of Dubai free zone company setup; but also must for a smooth run of your business.
Submit application and documents for Dubai free zone company formation
Till now we have discuss a lot of thing about dubai free zone company formation. Now its time to submit documents. The application form and other legal documents are need it to be submit; that is to start Dubai free zone company formation procedure. Depend on the nature of the business the require documents may be vary. In common you would need the following documents.
- Free Zone application form.
- Passport copies of share holder.
- Business plan.
- Visa copy (if you have an existing UAE visa).
- Bank statements (to prove the capital amount).
- No objection certificate from the current sponsor (for UAE residents only).
To set up a subsidiary or branch of a foreign company in Dubai free zones, extra documents are requires.
Secure the preliminary approvals for Dubai free zone company setup
At this time let me tell you one thing that some free zone in Dubai; may call for prior approvals from other govt departments to start the dubai free zone company setup. So you need to take these approval before starting the process in free zone.
Payment for Dubai freezone company setup
Now you are ready to make the payments. With some of Dubai free zones, you have the option of making the payments in installments; however, pay attention to the total cost in this case; that is it could be higher than the normal fee.
Sign the agreements and other documents for Dubai Free Zones Company formation
After you make the payments, the concerned Dubai free zone authority; would prepare the legal documents and you will sign them; that is in the presence of an official of that Dubai free zone.
Receive your License for Dubai free zone company setup
Once you complete all the above steps; then it is time to receive your Dubai free zone company formation License. Along with the business license, some Free Zones give certificate of incorporation, share certificates etc. We alway select a best free zone for our client; depend on their requirements.
Comparison of Mainland and dubai free zone company formation
There are more than 20 free zones in Dubai and 44 all over in UAE. Each one is power to register company in their own line of business; and also each one of them has different set of rule, cost and legal structure. Choosing right free trade zone depends on short term; or on a long term objective of the firm and cost difference.
At this stage let me tell you one more point; that is rent for company formation in dubai Free Zone are some what lower than Mainland; the operational cost for company formation in dubai Free Zone is also lower as compare to Mainland. But a dubai free zone company formation are only allow to offer services within that free zone. Whereas, mainland company can offer services to local as well as global market. Operational cost, renewal cost and maintenance cost of dubai free zone company formation are low. Company Setup time frame is very low in free zone as compare to mainland.
Local sponsor or local service agent is requires for mainland Company; it is individual who plays a role of Local service agent.
To summarize the difference, the freedom of doing business internationally is more in free zone as compare to the Mainland.
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