What is a Dubai Freezone Company?
If you haven’t heard of what Dubai freezone is, chances are that you are missing out on a business opportunity of a lifetime. Think of these zones or areas as special economic regions that have been established with the sole objective of facilitating expatriate investors. Investors can enjoy a high degree of tax concessions along with custom duty benefits that are lucrative enough to attract any potential investor who wishes for company formation in the Dubai Freezone.
If you have a company established in Dubai freezone, it is hence referred to as a Dubai freezone company. Dubai Freezone Company formation is a systematic process that requires following a specialized set of rules and operating under the rule of relevant authorities and regulations that are put in place for freezone company formation in UAE. In this piece, we will try to cover the topic as briefly yet as clearly as we can so anyone can have a crystal clear idea of what it is.
Types of Dubai Freezone Corporate Entities
Before we get in the depth of forming a company in the Dubai freezone, we need to understand the corporate entities responsible for the management and governance of the said freezones. This includes:
- Freezone Establishment (FZE), and
- Freezone Company (FZC)
The main difference between the two is marked by the number of shareholders. A Freezone Establishment is a single entity (person or a company) that is the sole shareholder of the freezone. On the other hand, a Freezone Company could have multiple shareholders. Speaking from the vendor or the investor’s point of view, both have the same operational benefits to offer.
What is the Difference Between Dubai Freezone And Dubai Mainland?
It is here that we must help our readers understand the difference between Dubai Freezone and Dubai Mainland in terms of business. Forming a company in Dubai freezone may have its perks, but Dubai mainland is where the majority of the population lies. Not to mention business in Dubai mainland allows you to expand across the entire UAE, which is not the case with the freezones. Businesses in freezones are restricted to that particular location with certain zones having limits placed on the number of visas an individual can apply for.
Previously, it was a requirement for businesses on the main land where 51% is owned by UAE national partner and 49% is held by you which has recently been changed; so any and all businesses existing on Dubai mainland can have 100% foreign ownership which puts Dubai freezone and Dubai Mainland on equal planes. Additionally, businesses that wish to transition from freezone to mainland are provided support for their transition. Freezone allows ample opportunities for businesses to grow and strengthen their roots with a convenient single-window business setup system.
Benefits Of Forming A Company In Dubai Freezone:
There are a lot of perks of company formation in the Dubai freezone, some of which include:
- 100% foreign ownership – no local partners required
- 100% exemption from personal and corporate income tax
- 100% capital and profit repatriation
- Multiple types of licensable activities via one window
- No currency restrictions
- Communications facilities
- Cheap energy
- Perks of better logistic facilities due to business-cluster effect
- Support services are exceptional
- SME and startups can have offices and serviced desks although freezone offices don’t require any office space
- Secrecy of operations with flexibility to engage in international business
- You can liquidate anytime
- The cost of setting up a business is surprisingly affordable
How To Start A Company In Dubai Freezone?
In order to start a business in Dubai freezone, a business will require Dubai freezone company registration via a freezone establishment or freezone company. You require close to no paperwork and the process will take less time than you would expect. Below are the essential steps that will walk you through the essentials of how to start a company in the Dubai freezone.
The Steps Of Forming A Company In Dubai Freezone
The few steps you need to follow to start a company in Dubai freezone include:
- Determine the type of legal entity your business will be taking up (either an establishment, an LLC, or a Freezone company - FZE).
- Choosing a trading name – needs to be consulted with the freezone authority.
- Apply for a business license – this will depend upon your primary business activities.
- Choosing an Office Space – this varies as per your business requirements (number of employees, equipment, etc.).
- Get your pre-approvals and register your business to get your license.
Requirements To Setup A Company In Dubai Freezone
Setting up your company requires you to submit a license application where you will be required to submit the following documents:
- Color copy of passport and visa (if you have a shareholder, then they need to submit theirs as well)
- The completed application form
- Copy of trade license or registration certificate
- A complete business plan
- An untitled deed
- Board resolution
- A financial audit report
- Letter of intent
- Memorandums and articles of association
- NOC for current sponsors
Additionally, you need to set up a corporate bank account in the freezone where you wish to set up your business. The registration and licensing fee will have to be paid as per the type of license applied for. It is after this and final approval from the regulating authority of the freezone that you can assume to have laid the foundation of your business.
The Cost Of Company Formation In Dubai Freezone
The total cost for a Dubai freezone company formation can be divided into the following cost essentials:
- First, you will need a freezone license which can cost you anywhere from 10k to 50k AED per year depending upon the type of legal activity. the license needs to be renewed on a 3-yearly basis.
- Then you need to have an office space with relevant furniture that can set you back by as much as 15k to 20k AED.
- Then there’s the one-time registration fee with the freezone which can cost you around 10k to 50k AED.
- Then there’s the visa process to give the applicant the status of an investor and permission to conduct business on UAE soil. This can cost around 3k to 6k per person.
On the lower end, we end up at a figure of 38k AED and on the higher end, our costs can be around 126k AED.
List of Dubai Freezones
There are about 45+ active freezones operating in UAE. This includes:
Freezones In Abu Dhabi:
- Abu Dhabi Airport Freezone (ADAFZ)
- Abu Dhabi Global Markets (ADGM)
- ADPC - Khalifa Port and Industrial Zone (KPIZ)
- Industrial City of Abu Dhabi
- Higher Corporation for Specialized Economic Zones / ZonesCorp
- Masdar City Freezone
Freezones In Dubai:
- Dubai Airport Freezone
- Dubai Auto Zone
- Dubai Biotechnology & Research Park (DuBiotech)
- Dubai Car and Automotive City Freezone (DUCAMZ)
- Dubai Design District
- Dubai Flower Center
- 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 Logistics City
- Dubai Media City
- Dubai Multi Commodities Centre
- Dubai Outsource Zone
- Dubai Silicon Oasis
- Dubai Science Park
- Dubai Studio City
- Dubai Techno Park
- Dubai Textile Village
- Dubai Technology and Media Freezone
- International Media Production Zone
- International Humanitarian City
- Jebel Ali Freezone
- Jumeirah Lakes Towers Freezone
- Dubai South or DWC
- Dubai Production City
Freezones In Sharjah:
- Hamriyah Freezone
- Sharjah Airport International Freezone
- The U.S.A. Regional Trade Center (USARTC) Freezone
- Sharjah Media City Freezone (Shams)
Freezones In Ajman:
- Ajman Freezone
In Ras Al Khaimah:
- Ras Al Khaimah Economic Zone (RAKEZ)
- Ras Al Khaimah Investment Authority
- Ras Al Khaimah Free Trade Zone
- Ras Al Khaimah Media Freezone
Freezones In Fujairah:
- Fujairah Freezone
- Fujairah Creative City
In Umm Al Quwain:
- Umm Al Quwain Free Trade Zone (UAQFTZ)
How Avyanco Can Help You Setup a company in Dubai Freezones
With strong roots and connections across all freezones in UAE, Avyanco can help you establish your business in the freezone of your choosing. Forming a company in Dubai freezone has never been easier, as our highly skilled and professional agents will help you seamlessly complete the whole process to establish your business and get it running in no time. All we need is for you to reach out to us and leave the rest to us!