The label ‘Free Zone’ was initiated and used in Dubai to label tax-free zones. International investors seek out a platform to invest in to establish their business. One of the key factors that gets the utmost importance before investment decisions are made is tax. Different regions of the world offer different tax slabs for establishing business depending upon various parameters like nature and size of business. On the other hand, Dubai has come up with dozens of tax-free zones that enable the foreign investors to invest without worrying for the tax payment. An interesting step initiated by the UAE Government by the second half of 2018, is to issue a license to 163 companies to operate all over Emirates. In this article, you will get to know as to why this decision has been made and the benefits that international investors can get.
A Glimpse of the Free Zones in Dubai
One of the eye-catching parameter for a foreign investor to set up a business in Dubai is the availability of free zones. There are more than 30 free zones in Dubai that offer 100% foreign ownership along with several other benefits to its investors. These zones are exempted from Licensing, Agency, Emiratisation, and domestic regulations that benefit the investors and provokes them to invest more. Each of the Emirates has got their own respective free zones.
Let’s have a look at the different benefits that a free zone offers its investors.
Benefits of Free Zones
- 100% foreign ownership
- 100% repatriation of capital and profits
- 100% free transfer of funds
- A quicker process of incorporation
- Availability of inexpensive work force
- 25-year lease options, areas available for warehousing and assembling unit
The DED Initiative
Dubai, being one of the world’s fastest growing business platforms, has more than 34,000 business entities registered in more than 30 free zones available. Business setup in Dubai free zones grows extensively every year. The Department of Economic Development (DED), Dubai has taken an initiative by the second-half of 2018 to issue permits to 163 free zone companies to expand their operations in the Emirates Mainland with an aim to boost entrepreneurship rates in the Emirates. The decision became concrete when a Memorandum of Understanding (MoU) got signed between the DED and Dubai Free Zone Council.
How to Proceed?
If you have a company in one of the free zones, you can now easily operate in the Dubai Mainland just by submitting a No Objection Certificate along with a respective fee. Once paid you are all set to go.
Abu Dhabi’s Similar Move
Abu Dhabi, the capital of UAE, has also taken a similar initiative of allowing a dual license for its business entities to operate in both free zones and across the mainland. This turns to be a good move with an aim to diversify the economy, reduce the economic boost on oil reserves, attract FDI, and improves Emirates as well as the world economy.
Both these two initiatives will raise the demand of company set up in UAE as the companies registered in free zones can now bid for bid for business in the mainland zone. It has removed the limitation that restricts free zone companies from trading in the mainland market. This expands the business opportunities for the established as well as new business entities. If you are planning to set up your business in UAE, then this could be the best time to take your first move. Commitbiz has always been dealing with international clients helping them to establish their business units and will be your helping hand throughout the entire process of business setup. Our business experts are well-equipped with the legal laws in UAE and will cater to your needs accordingly. Apart from business setup we also help business entities to build their business pillars in the field of accounting, taxation, legal and visa services. For more information, do contact us. We’d be glad to assist you.