UAE Free Zone companies are governed by the rules and regulations of the Free Zone Authority where they are registered.
Cleverly designed to encourage foreign investment and start-ups establishments in a thriving business environment within a zero tax jurisdiction, UAE Free Zones grant attractive corporate set up and maintenance costs, fair immigration procedures and skilled workforce, availability of office facilities with convenient leasing terms and world class infrastructure.
As a rule of thumb, the main steps to set up a business in a Free Zone are enlisted below:
- determine the type of legal entity
- choose one or more relevant activities
- choose a trade name
- apply for a business licence
- choose an office space (flexi office, shared office, etc.)
- get approvals from the Authority
- register your business and obtain your trade licence
Among the numerous advantages of setting up a Free Zone company on the territory of the UAE there are:
- 100% foreign ownership
- no import and export taxes
- full repatriation of capital and profits
- no foreign exchange controls and currency restrictions
- full corporate tax exemption;
- no personal income taxes;
- no limitations on the citizenship of the company employees
Setting up a company in a Free Zone is an easy journey, requiring minimum paperwork and disbursements.
Another favourable feature is the potential provision of residence visas for members of the management board, shareholders and employees. Number of visas issued usually depends on the chosen license or the type of office premises leased (flexi office, shared office, etc.) and may vary among the different Free Zones.
Thanks to our knowledge about the UAE market and our experience in companies’ formation, we can certainly help you to find new business opportunities in the UAE and provide professional advice about the incorporation of your new Free Zone Company.
To learn more about UAE Free Zones contact us.
FAQs
- Free Zone Establishment (FZE – Sole Establishment), with single shareholder
- Free Zone Company (FZCO – Limited Liability Company), with 2 or more shareholders
- Branch or representative office of existing company, either registered in the UAE or abroad
- Offshore Company
- Commercial
- General trading
- Industrial
- Service
UAE Free Zones are often used for carrying on trade, investment, financial and other activities. The list of the permitted activities depends on the licence obtained and the concerned Free Zone Authority
These may vary depending on the business type and the concerned Free Zone Authority
Both Licence and Lease Agreement are valid for 1 year and must be renewed annually
A Free Zone company is allowed to carry out business internationally (outside the UAE) or within the Free Zone itself. It is not allowed to carry out any business within the UAE mainland. If the target market is mainland UAE will be necessary to establish an UAE Onshore Company
Depending on the nature of business, some external approvals may be required from certain Ministries or regulatory Authorities. If there are no external approvals required, the Free Zone Authority will carry out its own review of proposed business activity during the incorporation process
It is possible to apply for a Tax Residency Certificate for a Free Zone Company and this can be extremely beneficial if the intention is to take advantage of the wide UAE’s network of double tax treaties
The UAE levies a 5% Value Added Tax. Free Zone companies are exempt when trading between themselves within the same Free Zone and when trading with companies within other Free Zones. However, Value Added Tax is levied on goods and services traded onshore into the UAE
No requirement of a local service agent is present, unless the Free Zone company is used to carry out business activities outside the territory of the Free Zone and within the territory of the UAE. In this case, the Free Zone company will be subject to the UAE Commercial Companies Law, as well as to the licensing procedures and other requirements of the respective Emirate, and will be required to appoint a local distributor or agent