Dubai Freezone Company Formation

Dubai, one of the seven emirates of UAE is drawing the attention of entrepreneurs given its growing economy, friendly policies, and strategic location. Do you also wish to start a company in Dubai freezone but lack proper knowledge on how to get started?

Among all the jurisdictions, setting up a company in a freezone is the talk of the town because of tax benefits, investment opportunities and much more. Let’s dive deeper and understand the advantages and procedures involved in UAE freezone company formation to make better decisions.

What is a Freezone?

A Freezone is the designated economic area within the country. They operate under a set of regulations issued by the Free Zone Authority, which has certain advantages and procedures compared to mainland jurisdictions.

Freezones were specifically started with the motive to expand the country’s economy and attract foreign investors. Free zone companies in Dubai facilitate strong networking, collaboration, and opportunities which support business growth.

Dubai has various free zones thereby welcoming various activities for business setup. They are listed below –

• Dubai Biotechnology & Research Park (DuBiotech).
• Dubai Airport Free Zone Authority (DAFZA).

• Dubai Commerce City (DCC Free Zone).
• Dubai World Trade Centre Free Zone.
• International Free Zone Authority (IFZA).
• International Humanitarian City.
• Dubai Gold and Diamond Park.
• Dubai Internet City (DIC).
• Dubai Knowledge Village.
• Dubai Healthcare City.
• Dubai Design District.
• Dubai Maritime City.
• Jebel Ali Free Zone.
• Meydan Free Zone.
• Dubai Media City.
• Dubai Auto Zone.
• Dubai Expo City.
• Dubai Studio City.
• Dubai Outsource Zone.
• Dubai South Free Zone.
• Dubai Internet City (DIC).
• Dubai Silicon Oasis (DSO).
• Dubai Science Park Free Zone.
• Dubai Financial Services Authority.
• Dubai International Academic City.
• International Media Production Zone.
• Dubai International Financial Centre (DIFC).
• Dubai Multi Commodities Centre or Jumeirah Lakes Towers Free Zone.

Benefits of Dubai Freezone Company Formation

When it comes to the formation of a company in Dubai Freezone, you get to enjoy the below-listed benefits –

• Tax Benefit
• Easy Incorporation
• Duty Free Privileges
• Modern Infrastructure
• 100% Foreign Ownership
• Building a Strong Network
• Easy Access to Major Markets
• Flexibility in Business Activities
• Intellectual Property Protection
• Recovery of Profits and Capitals
• 100% Foreign Exchange Repatriation

Types of Business Entities Applicable for Dubai Freezone Company Formation

Just like there are different jurisdictions for business setup in Dubai free zone, there are certain entities, such as the ones mentioned below –

i) Free Zone Establishment (FZE):

A free zone establishment is a single shareholder limited liability company (LLC) which can be incorporated in all UAE Free Zones. 

ii) Free Zone Company:

A free zone company requires two or more shareholders and a maximum of five shareholders. 

iii) Branch Office:

Branch office in Dubai are business entities that allow foreign companies to establish a presence in the emirate. However, they are not a separate legal entity from their parent company, which retains 100% liability for the activities carried out by the branch’s activities. 

Types of Licences Required for Dubai Freezone Company Formation

To open free zone company Dubai, entrepreneurs need to obtain the appropriate licence which acts as the government’s approval to carry out desired business activities in the emirate. The types of licences which can be availed are –

a) Commercial  Licence:

A commercial licence allows a company to trade, import/export products, and sell some services within UAE. This licence enables strong trading relationships with countries around the world.

b) Professional  Licence:

A professional licence authorizes people to practice any profession in Dubai while complying with the local laws. They are permitted to work in industries as independent auditors, accountants, consultants, engineers, etc. 

c) Industrial  Licence:

An industrial licence permits the manufacturing and production process.

Documents Required for Dubai Freezone Company Formation

The list of documents that are required to be submitted to the authorities for easy business setup in Dubai are as follows –

• Application form.
• Letter of Intent.
• Existing company brochure (if available).
• Annual financial report or the bank statement of the last 6 months of the shareholder(s).
• Copy of the manager's passport and CV.
• Copy of shareholder(s) passport and CV.
• Original bank reference letter (for each shareholder).
• A No Objection letter from the current sponsor for the manager (if the manager is a resident of the UAE and a UAE employment visa holder).
• Business plan.
• In case your business activity requires such approval, you will need to obtain initial approval(s) from third-party authorities. Examples are the media, IT, and Pharmaceutical sectors. 

Steps for Dubai Freezone Company Formation

The steps involved in setting up a company in Dubai freezone are listed below–

Step 1 – Determine Your Desired Business Activities 

You as an entrepreneur must plan, research, and gather knowledge about the business. This helps to choose the appropriate business activities you wish to run. The chosen activity needs to complement the business's purposes and objectives.

Step 2 – Pick an Appropriate Free Zone

Once you finalize the business activity, the management needs to figure out the right free zone. As there are various free zones in UAE, selecting the best one will only benefit the company. When incorporating a business, finalizing the correct business entity and location is essential.

Step 3 – Choose a Business Name

The next step involves the management choosing a business name. The name must be unique and adhere to legal regulations. Moreover, it must signify the company’s purpose and objectives.

Step 4 – Register for Licences and Visas

You need to apply for the required licences and visas by submitting the necessary documents to the respective free zone authority. 

Step 5 – Open a Bank Account

Lastly, you need to open a bank account to facilitate business transactions, maintain multiple accounts, access multiple currencies, etc.

Now that you know what is needed for free zone company formation in Dubai, you must be excited to begin your entrepreneurial journey. Commitbiz can guide you with business setup in Dubai free zone. Do contact us to know more and help you build something huge.