Why Establish a Company in Abu Dhabi Free Zone?

by Zaara 26, Nov 2020

Why Establish a Company in Abu Dhabi Free Zone?

The United Arab Emirates has long been an attractive destination for businesspersons the world over. Offering low tax, a strategic location at the heart of the world’s major and fastest emerging markets, and a government committed to fostering and supporting business, it’s not hard to see why.

Abu Dhabi, the capital of the UAE, has many things to offer to investors and entrepreneurs. The free zones are dedicated to different business activities and provide a wide range of benefits. The free zones are a significant business hub and ideal for setting up a business or a branch/representative office. But before you think of setting up a business in any of the Abu Dhabi free zones, you must know a few pros and cons.

Abu Dhabi Free Zones

Abu Dhabi is the largest emirate and capital of the United Arab Emirates, housing several prominent free zones. Some of the first preferred Freezone locations for business setup in Abu Dhabi are KIZAD, Masdar City, and TwoFour54. Let us have a quick look at these free zone before diving deep.

1.Masdar City

Masdar City in Abu Dhabi is yet another ideal Freezone region offering company registration in UAE. Masdar City in Abu Dhabi offers Freezone company setup mainly to technological-based setups, clean technology, and renewable energy companies.

2.TwoFour54

If you are a media company or an advertising company planning to expand or set up a new business in Abu Dhabi free zone – then Twofour54 is the right option for you. It has several national & international media companies.

3.Khalifa Industrial Zone

Khalifa Industrial Zone Abu Dhabi (KIZAD) is an ideal freezone in Abu Dhabi, encouraging entrepreneurship and offering an incubation center for SME’s. KIZAD also offers cost-effective workspaces as well as boasts world-class infrastructures.

Benefits of Opening a Business in Abu Dhabi Free Zone

There are plenty of reasons to open a business in Abu Dhabi free zones. They are –

  1. The business setup process in any of the Abu Dhabi free zones is simple and straight-forward. The application procedure depends on the type of business activity and the licenses you choose. The free zone authority will take care of the procedure.  The whole course often takes just a week or two. Many Abu Dhabi free zones also provide Flexi-desk and virtual packages allowing you to make use of the free zone address and amenities on an ad-hoc basis.
  2. The exemption on taxes is the premier reason why startups choose free zones. Set up in a free zone and as well as getting tax advantage from 0% corporate and personal tax, your business will also be exempt from VAT, currently at 5%. And that’s not all. Free zone companies are exempt from import and export tax, too, and can trade with no currency restrictions.
  3. Another major plus to set up in a free zone is foreign company ownership. Most businesspersons from foreign wanting to set up in the UAE mainland must work with a local partner to do business. This is not the case in the Abu Dhabi free zones – set your business up here, and you will retain 100% ownership.
  4. Abu Dhabi Free zone businesses are not permitted to trade directly with the local market in the UAE. However, this is easily overcome. One option is to work with a locally appointed distributor who can put your goods and services to market in return for a fee. Alternatively, it is possible to establish your free zone business and then open branch or representative offices of your free zone businesses throughout the Emirates at a later date. These branch offices can be used to market your offering and commence business within the UAE mainland.
  5. Free zone authorities are on hand to provide support during registration and beyond. Most free zones offer support with applying for visas for both shareholders and any applicable dependents such as spouses or local staff. Many also support opening corporate bank accounts, advising on the best bank to suit your needs, and even organizing meetings in-branch for you. In terms of current business support, it is not unusual for free zones to offer business guidance and networking services as well as access to startup hubs and growth initiatives to help new businesses get up and running.
  6. Finally, free zones are particularly popular with privacy-conscious entrepreneurs as there is no open directory of company ownership, and company data such as shareholder details are never disclosed to the public.

If you want to set up a business in any of the Abu Dhabi free zones, then we at Commitbiz can help you with it. Our experts have 13+ years of experience in this field and can make the process hassle-free. Contact us today for more information.