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How to Open Companies in UAE Free Zones

How to Open Companies in UAE Free Zones

Free zone companies are among the most popular business forms in the UAE. All Emirates have free zones in which foreign and local investors can operate under very advantageous conditions, however, there are several aspects that need to be considered when opening UAE free zone companies.

Among all Emirates, Dubai has the largest number of free zones, amounting to more than 40 special economic zones in 2019. Even if the other Emirates do not have that many free zones, the benefits in all UAE free zones are pretty much the same.

Our company formation agents in Dubai explain below the main requirements related to opening companies in UAE free zones. We would also like to mention that we can help you set up free zone companies in the UAE.

UAE Emirates and their free zones

The UAE is made of 7 Emirates: Dubai, Abu Dhabi, Ajman, Sharjah, Fujairah, Ras Al Khaimah, and Umm Al Quwain and all of them have free zones which offer great infrastructure and numerous benefits in terms of taxation.

Those who want to open free zone companies in the UAE will have plenty of such special economic areas in which they can operate.

Our Dubai company formation consultants can offer detailed information about all UAE free zones in order to help you choose the appropriate zone in which you can open a company.

Types of companies available in UAE free zones

There are several types of structures one can choose from when setting up a free zone company in the UAE. These are:

  • the free zone establishment or FZE which usually requires a single shareholder for registration;
  • the free zone company or FZC which differs in terms of shareholding structure from the FZE, as it required at least 2 shareholders;
  • the branch office which can be set up in all UAE free zones under specific conditions imposed by the local authorities;
  • the professional company which can be created in specific free zones in the UAE only – our agents can advise on these free zones.

Should you want to open a company in Dubai or a UAE free zone, you can rely on our local specialists.

Free zone companies are also required to obtain VAT numbers.

You can read about the advantages of UAE free zone companies in the scheme below:

What to consider when opening a UAE free zone company

Even if similar conditions are imposed when opening companies in UAE free zones, there are a few aspects to be taken into account by foreign investors. Among these, we mention the following:

  1. each free zone has its own authority which establishes the conditions for opening companies, and which handles the registration procedure;
  2. apart from respecting the national laws, each free zone also has its own rules and regulations;
  3. each free zone authority can impose a minimum share capital for setting up a company;
  4. UAE free zone companies are subject to various licensing conditions in accordance with the activities they undertake;
  5. each free zone targets at least one domain of activity, however, it can also allow the completion of other activities.

With respect to the licenses which can be obtained in UAE free zones, here are the most important ones:

  • the trading license;
  • the industrial license;
  • the service license
  • the professional license;
  • the warehousing license;
  • the manufacturing license.

All companies operating in free zones in UAE must have their main offices in the free zone they are registered.

Our company registration representatives in Dubai can offer more information on the requirements for setting up free zone companies in the UAE.

Steps for opening free zone companies in the UAE

Foreign investors who want to operate in UAE free zones by establishing companies here must respect the following steps:

  • select the type of structure of the company;
  • apply for the residence permit (if applicable)
  • reserve the company name;
  • apply for the business license;
  • obtain the legal address of the business;
  • obtain work permits for foreign employees (if required).

It is useful to know that the free zone authority in which the company will operate will handle all the visa applications and company registration procedures through a fast-track process.

Our advisors can handle the preparation of the documents required to open a free zone company in the UAE.

Advantages of UAE free zone companies

Those who want to open companies in UAE free zones will obtain the following benefits:

  1. no sponsor or local partner is required when setting up a UAE free zone company;
  2. the repatriation of profits and capital is free of charge in all UAE free zones;
  3. all free zones offer 100% exemptions from the corporate and withholding taxes;
  4. there are no import or export duties in UAE free zones;
  5. the residence visa issued to foreign investors has a 3-year validity period.

In numbers, FDI in the UAE indicate:

  • between 2016 and 2017, foreign direct investments in the UAE grew by 8%;
  • the total amount of money injected at national level at 10 billion USD, at the end of 2017;
  • in the first half of 2018, FDI had already grown by 26% compared to the previous year;
  • in the coming years, FDI is expected to increase by 15% across all Emirates.

For more information on the advantages of opening UAE free zone companies and assistance in registering such a company, please contact our company formation representatives in Dubai.