Located along the coast of the Arabian Gulf, Dubai was earlier renowned largely for its oil industry, but the scenario has changed in the last 2 decades. Dubai is now a global city and a popular business hub at par with western nations, due to its diverse business model that drives the economy in the region. In order to attract foreign investment and empower the economy, free zones have been set up in Dubai that reward foreign nationals with lucrative incentives for setting up their business in the Emirates.
The Free Zone Authority in Dubai is the government organization that handles registration formalities and issues business licenses to non-resident companies or foreign-owned businesses for company formation in Dubai free zones. Business setup in Dubai free zone brings a sea of opportunities for networking, collaborating and extensive growth in the business. The appealing tax regime and many incentives offered by the free zone authorities make Dubai the most preferred nation by an investor for company formation.
Benefits of Setting up a Business in Dubai Free Zone
Free zones are the most favourable locations for business setup equipped with state-of-the-art infrastructure, duty and tax exemptions, world-class business amenities, flexible government policies, and unmatched facilities.
These are not the only factors that drive Dubai free zone company formation; there are many more benefits of forming a Dubai free zone company, like:
- 100% ownership for investors, regardless of their nationality and country of origin
- 100% tax exemption on personal or corporate income or gains
- 100% repatriation of capital and profits
- Exclusion from all import and export duties
- Handy office and warehouse facilities
- Option for a company set up by an individual
- Exemption on corporate tax for 15 years, renewable for another 15 years
- Complete secrecy of operations
- Flexibility to engage in international business
- Fewer renewal charges
- Flexibility to hold properties, participate in multiple activities, and open a bank account in Dubai
- The option of liquidating anytime
- Assistance in housing facilities, staff visas, and other support services
List of Free Zones in Dubai
Dubai has more than 20 free zones offering a wide range of activities for company formation:
- Dubai Academic City
- Dubai Airport Free Zone Authority (DAFZA)
- Dubai Biotechnology & Research Park (DuBiotech)
- Dubai Car and Automotive City Free Zone (DUCAMZ)
- Dubai Design District
- Dubai Gold and Diamond Park
- Dubai Healthcare City
- Dubai Industrial City (DIC)
- Dubai International Academic City
- Dubai International Financial Centre
- Dubai Internet City (DIC)
- Dubai Knowledge Village
- Dubai World Trade Center Free Zone
- Dubai South Free Zone
- Dubai Logistics City
- Dubai Media City
- Dubai Maritime City
- Dubai Multi Commodities Centre or Jumeirah Lakes Towers Free Zone
- Dubai Outsource Zone
- Dubai Silicon Oasis
- Dubai Studio City
- Dubai Creative Clusters Authority (Dubai Technology and Media Free Zone Authority)
- International Media Production Zone
- Jebel Ali Free Zone
- Economic Zones World
- Dubai Flower Centre
- Meydan Free Zone
- International Humanitarian City
Types of Licenses Available for Business Setup in Dubai Free Zone
It is important to be aware of the various incentives that free zones in Dubai provide for license holders like Dubai Airport Free zone is allowing a dual license for its investors. The following licenses are offered by free zone authorities for Dubai free zone company setup:
1. Trading License
This type of license, if acquired, allows one to carry out trading activities like buying, import & export, and selling of a limited number of commodities.
2. General Trading Activities
One can deal with the trading of all types of goods, with an exemption on a few banned products which need special approval with this license.
3. Service License
Companies that want to deal with activities like consulting, accountancy, etc. can acquire this license.
4. Industrial License
A company can carry out manufacturing, packaging and processing activities after obtaining this license.
Types of Business Entities Allowed in Dubai Free Zone
1. Free Zone Establishment (FZE)
This type of company can be registered with 1 individual or corporate shareholder.
2. Free Zone Company (FZC)
This type of company can be registered with 2 or more shareholders. A shareholder can be an individual or a company.
3. Branch Office
A business that has a company in the UAE or a foreign land can have a branch in one of the free zones of Dubai.
How to Open a Company in Dubai Free Zone?
Dubai offers rewarding options for company formation to investors, to set up their business anywhere in the Emirates depending on the type of their business, location (free zones, mainland or offshore), budget, ownership preferences (100% ownership or local sponsorship), and other such factors. There are certain formalities and procedures to be completed in order to set up a business in Dubai free zones. These need acute planning, knowledge of local culture and government norms, and elaborate decision-making, through different business setup phases.
Procedure to Set Up a Business in Dubai Free Zone
There are 6 simple steps included in the Dubai freezone company setup.
- Choose a Business Activity
- Find a Suitable Free Zone
- Choose a Trade Name
- Gather Important Documents
- Apply for a License
- Open a Business Bank Account
The steps are explained as under -
1. Choose a Business Activity
Decide a business activity you wish to carry out, as the type of license you apply for will depend upon the nature of the business activity. Many Dubai zones allow for multiple business activities, so have many options to explore.
2. Find a Free Zone
Once you have decided on a business activity, the next step is deciding which free zone is right for you. Basically, there are sector-specific zones like IT, healthcare, commerce, trading, etc., therefore, research before choosing one particular zone.
3. Choose a Company Name
Before finalizing a name, you need to ensure that your business name is available to be registered on the Dubai free zone authority portal. There are also certain standards that the name must adhere to, including avoiding any blasphemous language or references to religious or political organizations.
4. Gather all the Documents and Apply for a License
After deciding the business activity and registering the trade name at the portal, the next crucial step is to apply for a license. The type of license depends on business activity. To apply for the same, you need to first fill the application form and gather the documents, as mentioned in the form. Also, you can make a visa application during this process.
5. Open a Corporate Bank Account
Opening a bank account is an easy process. But to do so, you have to again gather the documents as well as your business license and provide it to the chosen financial institution.
After the 4th step, you will get a valid license within 2-4 weeks, and you are good to go.
Documents Required for Dubai Freezone Company Formation
For a business license:
- Colour copy of shareholder(s)’ passport and visa, if applicable
- Application form
- Business plan
- Board resolution
- Memorandum and Articles of Association (MAA)
For opening a bank account:
- A corporate account opening form
- A board of directors’ resolution sanctioning the opening of the account, and the signatories to the account
- A copy of your company’s certiﬁcate of incorporation
- A copy of your share certiﬁcate
- A copy of the company’s Memorandum and Articles of Association (MAA)
- Copies of passports for all partners in the company
Dubai Free Zone License Cost
It is not easy to tally the total cost of Dubai free zone company formation as the final figure is made up of several components. Along with the cost of the free zone license itself, one also needs to consider the cost of premises if required as well as visa costs.
It is possible to pay all of these costs at once, however. Most Dubai free zones offer packages that include a trade license, the use of workspace and one or more visas for you and your employees. A company formation expert can help you in your search, understanding your needs and your budget before finding a package that fits the bill.
Why Set Up a Business in Dubai Free Zones?
Dubai's free zones are extremely popular among entrepreneurs and business owners for company setup due to their reputation of being tax-free zones with free trading ports that can be solely owned by the person who sets it up (irrespective of the nationality). Additionally, Dubai free zone company formation does not have a restriction that mandates the presence of a local sponsor to act as a point of liaison, which acts as a catalyst for increased foreign investment. Dubai free trade zone company registration process is quite smooth and requires only that the share capital arrangements are made prior to applying for a license.
Set up a Business in Dubai Free Zone with Commitbiz
Freedom of doing business, huge tax savings, and favourable government policies lead investors and businessmen to set up their operations in Dubai free trade zones. Commitbiz has the experience and resources to help you realize your company setup dreams without worrying about the red tape, visa applications, documentation, and licensing formalities, residence permits, banking details, etc., as our experts take care of all these requirements.
Contact us for free zone company registration in Dubai and our specialized team will be glad to assist you with all the details.