Free-trade zones (FTZs) are special economic zones established in Dubai to provide foreign investors with tax breaks and advantages related to customs duties. There are more than forty free zones in Dubai.
Indian investors and business owners can gain greatly from establishing a free zone company in the United Arab Emirates. These advantages include complete corporate ownership, reasonably priced company incorporation, tax-free reforms, and much more. Additionally, acquiring a business license in the Dubai free zone is easier and faster than for offshore and mainland enterprises.
This blog will cover all the essential details you need to know regarding free zone company formation in Dubai.
What are the benefits of a free zone company formation in Dubai?
With modern infrastructure, duty and tax exemptions, excellent business possibilities, and accommodating government rules, free zone company formation in Dubai offers the finest conditions to start your own business. The following are some advantages of establishing a business in the Dubai free zone:
- Benefits related to taxes: Businesses located in free zones are frequently excluded from paying corporation or personal income taxes for a certain amount of time.
- Benefits of Customs: Reduced import and export tariffs and streamlined customs processes increase the effectiveness and affordability of international trade.
- Business-Friendly Environment: Free zones provide streamlined, minimally bureaucratic registration and licensing procedures.
- Strategic Locations: To promote effective logistics and international trade, a large number of free zones are situated close to important ports, airports, and transit hubs.
- Modern Infrastructure: Free zones provide advanced infrastructure, such as industrial, warehouse, and office space.
- Skilled Workforce: These areas draw in a wide range of internationally qualified experts, which makes it simpler for companies to locate the personnel they need.
- Access to Investment Incentives: A few free zones also provide grants, venture money, and help for research and development.
- Global Expansion: Because of their advantageous regulatory environments and strategic locations, free zone enterprises enjoy a strong foundation for international commerce and global expansion.
What are the crucial steps for free zone company formation in Dubai?
The process of free zone company formation in Dubai is overseen by the relevant free zone authorities. Below is a step-by-step guide to establishing a business in a free zone:
1.Determine the legal structure of your company
The most sought-after legal entities in free zones are as follows:
- Free Zone Establishment (FZE)
- Free Zone Company (FZCO)
- Branch of a local or international company
2. Select a Trade Name
Selecting a name for your company that accurately represents your business activities is an essential step. Make sure the name you’ve chosen follows the naming convention used in the United Arab Emirates. You can check the availability of your chosen name by visiting the Department of Economic Development (DED) website.
3. Apply for a Business License
Launching a business in a free zone goes one step further: applying for the required free zone trading license. It’s an important step because improper licensing might lead to inadequate operations and might also have legal implications. Furthermore, you will have to keep renewing your free zone business license. If your trading license is invalid, your free zone firm might be put on a blacklist, suspended, terminated, or even fined.
4. Choose a Workspace
Businesses must have office space in the UAE-free zones. You have the option of operating from a virtual address or renting an office space, depending on your activity and available space.
The activities of your business determine the size of the workplace. You can initially start with a modestly priced small location and progress to larger ones as your business expands.
5. Register your company, acquire your license, and get preliminary approvals.
To register your company in the chosen free zone and secure visas for family members and employees, you need to receive the following approvals:
A. Initial Authorization
In a free zone, you first need the approval certificate in order to get a business license. Additionally, you can apply for initial permission by sending the necessary documentation to the appropriate jurisdiction:
- An application form
- Detailed business strategy
B. Registration
The next step is to pay the free zone business registration charge. To establish a business in a free zone, this fee must be paid by all Indian investors and other foreign nationals. Therefore, please ensure that the following is submitted:
- Application for Registration Form.
- The power of attorney given to the director that is notarized and attested.
- The notarized and authenticated copies of the Memorandum of Association (MoA) and the Articles of Association (AoA)
- Details regarding shared capital.
C. The Visa and Licensing Procedure
Lease agreements will be prepared by the free zone authority as part of the licensing and visa process. Once all the approvals are obtained, you will receive your business license.
It should be noted that depending on the free zone, kind of economic activity, and organizational structure, certain business activities may need extra permissions from relevant authorities and there might be differences in the documentation requirements and processes.
6. Open a corporate bank account:
After securing your business license, collect your corporate documents and open a corporate bank account. Choose a bank that meets your business requirements. Dubai hosts a wide range of domestic and international banks. You’ll need to provide your business license, shareholder’s passport copies and other documents required by the bank.
After completing all the necessary steps, you can officially operate in the free zone and take advantage of its benefits.
Documents required for Free zone company formation in Dubai.
The list of documents that you need to submit to the free zone government to register your business in the designated free zone is as follows:
- Trade name list
- A list of Business Activities
- A copy of the shareholders’ passport
- Visa page or entry stamp
- Passport-sized photo taken by the UAE guidelines (size, backdrop colour, etc.)
How much does it cost to start a free zone corporation in Dubai?
The biggest advantage of free zone company formation in Dubai is the opportunity to start a business at a relatively low cost. The Dubai Free Zone charges a yearly licensing cost starting from AED 14,900 for trading permits. This depends on several things, including the business activities and the visas obtained etc.
(Please note that these are just starting prices of a free zone company formation in Dubai and will vary as per your business activities and needs)
Free zone company formation in Dubai with Dubiz!
Free zone company formation in Dubai offers several advantages, such as lower operating expenses, more freedom, and access to international markets. This choice not only fosters growth but also enhances the overall expansion of your business venture. However, setting up a business in free zone in Dubai can be a tedious job. But no need to worry! DUBIZ is here to guide you every step of the way, from choosing the right free zone to securing your business license and beyond.
Take a first step towards your entrepreneurial success in Dubai’s thriving markets!
Contact DUBIZ today at +971 562986853 or WhatsApp us at +971 569973630. You can also drop an email at info@dubiz.co for any inquiries.
