complete guide to dubai free zones company foundation in 2024

Many businesses all across the globe fear investing in the UAE, as it imparts the compulsion of having a partner with 51% of their shares. But thanks to the Free Zones, which became super popular for business registration in the UAE, the venture grew. The free zone or free trade zone is the area with special tax-free status and also entitled to low trade barriers where the manufacturing of the goods takes place, import/export activities, or reconfiguration of everything without paying any customs duties.

Generally, strategic geographical locations like national borders, international airports, and major seaports are the hubs for the free trade zones, which also provide the best trading advantages. The government of the UAE has made multiple free zones in the Emirates specifically for particular business activity and domains. They offer lucrative offers and appealing deals to all the non-resident corporates, like single-window administration, no bureaucratic red tape, and 100% ownership here. 

In total, there are about 44 free zones spread all over the UAE, attracting FDI (foreign direct investment), where 2,00,000 companies contribute to GDP growth. There are a variety of factors that affect the free trade zones, like focus, setup costs, and the paperwork required, but in all of them, the requirement is the same.

Content Overview:

• Free Zones Company Foundation.
• Benefits of Business Setup in Free Zones in UAE.
• Types of entities allowed in free zones in UAE.
• Types of Licences Available in Free Zones in UAE.
• Setting up your business in free zones in UAE.
• Process of setting up business in free zones in UAE.
• The documents required in free zones in UAE.

What are the benefits of setting up a business in the free zones of the UAE?

• 100% foreign ownership.

• 100% return on capital and profits.

• 100% exemption from corporate, personal, and income taxes.

• 100% free transfer of the funds.

• There are no foreign exchange controls.

• Exemption from all import and export duties.

• The low fright charges.

• Abundant and inexpensive energy.

• The inexpensive workforce and easy recruitment process.

• Efficient communication procedures.

• The single-window administration.

• The Liberal government policies and the legal framework.

• a timely and streamlined immigration process.

• Sponsorship and visas for an affordable, skilled workforce. 

• Operation Flexibility: 24/7.

• The freehold offices are available for sale or lease.

• Ready-made offices, factories, and warehouses.

• The easy start-up and the licencing procedures.

• The unique industry clustering and the infrastructure are built according to your business purpose.

• UAE 3-year resident visa.

• There are no restrictions on hiring workers.

What are the types of entities that are allowed to set up businesses in the free zones of the UAE?

The UAE Free Zone business setup is super easy and hustle-free. Thank the UAE government, which made the company's foundation and formation process very easy so that foreign investors could take maximum benefit with a minimum capital investment. 

• Branch of a foreign or local company.

• Free Zone Establishment (FZE), with a single stakeholder.

• Free Zone Company (FZC), with 2 to 5 stakeholders.

What are the types of licences available in the free zones of the UAE?

• General Trading Licence: This allows you to trade in the domain of all kinds of products.

• Trading/Commercial Licence: This grants you a limited time of authorization for performing industrial, commercial, or consulting services.

• Service Licence: This allows the operation of all the law firms, accounting firms, and business firms.

• Industrial Licence: This allows the import of raw materials, manufacturing goods, and the export of finished products across all global boundaries.

• Warehousing Licence: This allows all the investors to avail of the warehousing facilities on lease for goods distribution, packaging, and storage.

• Manufacturing Licence: This allows all the applicants to manufacture the goods.

How you can set up your business in the free zones of the UAE?

The companies that are set up in the free business zones of the UAE do not relate to the effect of the commercial company’s law. 

These free zones are outside the control and proper jurisdiction of the UAE government. Their particular rules and regulations are governed by the free zone authorities.

These free zones particularly offer investors from all across the globe the best opportunity to connect and stay in a liberal work environment. 

What is the process for setting up your business in the free zones of the UAE?

• You have to determine the type of legal entity.

• First, you need to make sure that the type of entity of your business you need to set up in the free zones of the UAE.

•  Also, it depends on the particular free zone where you want to set up your company.  

• Then you have to choose your trade name.

• After you decide on your legal entity, you have to choose the trade name of your company.

• You need to check the respective free zone authorities for the same that provide the particular trade permit names.

• They’ll also inform you about the already-registered names.

• Then you have to apply for the business licence.

• After choosing your trade name and then registering the name in the free zone authority’s portal, you get to apply for the business licence.

• The type of business licence completely depends on the primary activity of your business.

• Then you need to submit the supporting documents when you apply for the business licence.

• You have to choose the space for your office.

• The free zone authorities provide you with flex-desk office services if you are a startup looking for a business setup.

• You have two options: either you can buy the office space or take it on lease in the free zones.

• Those office requirements completely depend on the total number of employees and the type of business activity.

• Then you have to get the pre-approval, register your business, and then get your licence.

• Then you need to get initial approval for the licence and setup from the specific authorities.

• Then you need to register for your business at the portal provided by them.

• Finally, you’ll get your licence.

• Within 2-4 weeks, the process will be done.

• And then, after getting the licence, you can start with your business.

What are the documents required to set up your business in the free zones of the UAE?

You have to translate many documents into English, attest to them, and finally notarize them by the Gulf Cooperation Council (GCC) or the Arab Embassy.

• The General Documents:

• The duly filled-out application licence form.

• The business card of the contacted person.

• A copy of the business plan.

• The notarized and attested Memorandum of Association (MOA) and the Article of Association (AOA).

• The passport copies of the partners and the business managers. 

• The original bank reference letters and the licence of the partner’s existing company, if applicable.

• Documents for the Consultancy Licence:

• A copy of the degree or diploma certificate that mentions the desired activities, or the particular experience certificate.

• Documents for the Industrial Licence:

• The business feasibility study.

• The existing company profiles.

• The duly filled-out form for the investor's project profile.

• Documents for the Branch of the Company:

• The attested copy of the registration certificate, incorporation certificate, the Memorandum, and the Article of Association (MAA).

• The original board resolution guarantees the financial commitment of the company branch.

• The original power of attorney of a legal representative, as well as their copy of the passport. 

• The last three month’s bank statements of the parent company.