The country of the United Arab Emirates is famous for its profitability and simplicity in setting up a business. It was understood that if it wants to prosper and wants to elevate the economy of the country, it must have more than a single source of revenue. The UAE is well known for its oil wells and its hydrocarbon sector, but now UAE does not want to rely only on this sector. Thus, it has started to diversify its economy by attracting people in business from all over the world.
In order to speed up the diversification process, the country has established various free zones which welcome not only foreign people in business with open arms but also have multiple benefits for the UAE. These free zones increase the employment levels of an area and affect the economy of the country positively. The free zones also alleviate the standard of living of the people and help them to gain financial freedom.
Let’s know about all the essential information about free zones in Abu Dhabi…
What Is a Free Zone?
Free zones are geographic regions within the United Arab Emirates which have their unique laws. These free zones are established to attract more and more people in business from all over the world. Usually, a free zone is formed with a specific industry in mind. A company can enjoy various features of the free zone, such as the locational advantages and the numerous financial and tax benefits by setting up a business in the free zones.
Free Zones in Abu Dhabi
In Abu Dhabi, there are currently there are eight free zones, namely:
- Abu Dhabi Airport Free Zone (ADAFZ)
- Abu Dhabi Ports Company Free Zone (ADPC)
- Abu Dhabi Global Markets Free Zone (ADGMFZ)
- Khalifa Industrial Zone Abu Dhabi (KIZAD)
- Higher Corporation for Specialized Economic Zones (ZonesCorp)
- Industrial City of Abu Dhabi
- Masdar City Free Zone
- Twofour54 Free Zone
These free zones help boost the economy of the country and help the economy to diversify. Along with this, they also help in the promotion of foreign investments and assist in driving financial growth.
Types of Companies in the Free Zones | Abu Dhabi
There are various alternatives available to a businessperson for the establishment of one’s company. In the free zone in Abu Dhabi, an entity can pursue the following types of legal entities:
1. Limited Liability Company
A Limited Liability Company (LLC) is a company which is an independent entity as per law. It has both individual and corporate shareholders. It can even have a mix of both kinds of shareholders. According to the type of business activity, the minimum capital requirement is decided.
2. Branch Company (Foreign)
A foreign company can carry out its primary business activity in the UAE, establish an office or a branch company after obtaining a license from the Ministry of Economy and Commerce. The only exception to this rule is if the foreign company has been licensed to operate from a free zone in the UAE.
3. Branch Company (UAE)
A company can open up its branch in the mainland and/or free zones. It can also try to establish an offshore company.
4. Freelance License
By obtaining a freelance license, an individual entity can conduct business in one’s birth name and will also identify him/her as the sole practitioner of that business.
The management of the company has to decide which type of legal entity will suit the business and will be profitable in the long run.
How to Set Up a Business in Abu Dhabi Free Zone?
The companies coming to the free zones are established as independent authorities and allow a foreign businessperson to own 100% of the company without the intervention of a local UAE resident or national. To get licenses for the companies in the free zone, you can contact the Abu Dhabi Free Zone Authority (FZA).
The complete process by which you can set up a business in the free zone is concise and straightforward. This process has been provided below:
1. Determination of the Business Activity
It is the first thing that the management needs to figure out. Determining the business activity is very important as it will be the deciding factor as to which legal entity will be used or designing the future strategies of the company.
2. Registration of the Trade Name
Registering the Trade name is also an essential step because once registered, this name will recognize the company all over the world. It should also be taken into consideration as to in which free zone the company name is registered.
3. Procurement of the Necessary Approvals
An investor must obtain the necessary permits and approvals. Without having the required permissions, the company may have to face difficulties.
4. Issuing of License
Once all the necessary permits and approvals have been taken, the company can apply for the legal business license which is issued by the Free Zone Authority of Abu Dhabi.
5. Commencing Business
Once all the licenses are obtained, you can begin your business operations.
Advantages of setting up a company in the Free Zone
Setting up a business in the free zone is very profitable as the management can avail many benefits, such as the following:
- Complete ownership of the company
- 100% repatriation of profits and capital
- No import and export duties
- World-class infrastructure and state of the art technologies
- Encourages friendly collaborations between similar companies
- Presence of business-friendly company laws and legal rules and regulations
- One-stop shop for all necessary permits and approvals
These benefits can be availed by setting up a company in Abu Dhabi Free Zone, but it requires much planning and strategizing before you set up a business. This can be a complex and time taking task, and thus it is always suggested that you take the help of a business setup consultancy.
If you are looking forward to set up a company in the Abu Dhabi Free Zone, do look at the services provided by Commitbiz. The specialized team of professionals at Commitbiz will provide its assistance and will ensure the maximum tax savings of the company. Contact us today for help in the company set up process.