How to establish a company in a free zone? The free zones in the United Arab Emirates are among the most prominent destinations for companies wishing to expand and prosper, as they provide a suitable investment environment and multiple facilities. Establishing a company in a free zone requires following specific steps, starting with determining the type of business activity and choosing the most appropriate free zone, then submitting the required documents such as a business plan, passport, and submitting a commercial license application. Free zones are also characterized by flexibility in foreign ownership of companies and many tax exemptions. These simplified procedures and government facilities contribute to supporting investors, making the UAE an ideal destination for establishing businesses.
How to set up a company in the free zone
Establishing a company in a free zone requires following specific steps to ensure compliance with legal requirements and regulations. Here are the basic steps:
- Choosing the right free zone: There are several free zones in the UAE, such as Jebel Ali, Dubai South, and Ras Al Khaimah. Choosing the right zone depends on the type of business you are operating in and the market needs.
- Determine the business activity: Determine the business activity you wish to engage in, as each free zone offers specific licenses for certain types of activities such as trade, manufacturing, and services.
- Submitting the application: After selecting the free zone and business activity, submit an application to the Free Zone Authority. The application includes submitting documents such as a business plan, a copy of your passport, and filling out the required forms.
- Issuance of License: After approving the application, the Authority issues the commercial license. This license is what allows you to conduct business within the free zone.
- Renting an office or workspace: Depending on the business requirements, you must rent an office or workspace within the free zone.
- Opening a bank account: After issuing the license and renting the office, you can open a business bank account to manage the company’s financial operations.
- Completing residency procedures : If you need to hire employees or if you want to obtain a residency visa, you can complete these procedures through the free zone.
- By following these steps, you can easily establish a company in any of the free zones in the UAE and benefit from the facilities provided.
Establishing a company in the free zone
Establishing a company in the UAE’s free zones is an attractive option for investors looking to benefit from a favorable business environment and multiple benefits. Free zones allow foreign investors 100% ownership of the company, while providing tax exemptions including income and corporate taxes. The incorporation process begins with choosing the right free zone for the company’s business activity, as each zone offers different types of licenses such as commercial, industrial, and service licenses. After choosing the activity and zone, the investor must submit an application that includes the necessary documents such as a business plan and copies of passports.
Upon approval of the application, a trade license is issued, allowing the company to operate. It also requires renting an office or workspace within the free zone, as well as opening a business bank account. Companies in the free zones can also employ local or foreign employees and facilitate the issuance of visas for them. Free zones also provide advanced infrastructure, flexible commercial laws, and government support to attract foreign investment. These features make establishing a company in a free zone an ideal opportunity for growth and expansion in the regional and international market.
Free zones also provide investors with strong legal protection and simplified procedures for establishing companies, making the process quick and efficient. In addition, free zones allow the freedom to transfer profits and funds without currency restrictions, which enhances the flexibility of business operations. One of the most important advantages that attract investors is the absence of import or export duties within these zones, which significantly reduces operating costs. In addition, many free zones offer support and advisory programs for start-ups and small and medium-sized enterprises, which contributes to enhancing the chances of success. Also, the competitive environment in the UAE and the country’s strategic geographical location make it an ideal starting point to access global and regional markets. In short, establishing a company in a free zone provides investors with multiple opportunities to achieve growth and expansion in a favorable business environment, while providing the facilities and flexibility they need to succeed in a competitive global market.
Conditions for establishing a company in the free zone
Establishing a company in a free zone requires compliance with a number of conditions and procedures. Here are some general conditions that may vary depending on the specific country or free zone:
- Select the company type: Choose the company type (such as limited liability company, joint stock company, etc.).
- Submitting the required documents: Submitting a copy of the founders’ passport or ID card. Submitting personal photos. Preparing a detailed business plan.
- Compliance with local laws: Adherence to laws and regulations related to investment in the free zone.
- Location Selection: Choose a location within the free zone and apply for a permit.
- Capital: Determine the minimum capital required depending on the type of company.
- Hire a lawyer or consultant: It may be preferable to consult the experts of Itqan Company to assist you with the procedures.
- Registration: Register with the authority concerned with the free zone and obtain a commercial license.
- Open a bank account: Open a bank account in the company’s name.
- Obtaining the necessary licenses: Obtaining any additional licenses depending on the type of business activity.
Documents required to submit an application to establish a company in Dubai
To apply to establish a company in the free zone , you will typically need the following documents:
- Color copies of the founders’ passports or ID cards.
- A limited number of founders’ personal photos.
- A document that describes the nature of the business, objectives, target market, and organizational structure.
- Filling out the company’s registration form.
- A document reflecting the company’s details (such as name, type of activity, and each founder’s share).
- Documents proving the selection of a location for an office or facility within the free zone.
- Documents proving the availability of the minimum required capital (such as a bank statement).
- Any licenses specific to the required business activity.
- In some cases, you may need to hire an attorney to help you through the process.
Expected time to complete the establishment procedures
The duration of completing the procedures for establishing a company in the free zone varies according to several factors, including:
- Company Type: Some types may require additional procedures.
- Documents provided: If the documents are complete and correct, the process will be speeded up.
- Concerned Authority: Some free zones have faster procedures than others.
- In general, the expected time to complete the incorporation procedures can range from two weeks to a month.
- To get an accurate estimate, it is best to contact the relevant authority of the free zone in which you intend to establish the company.
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Advantages of establishing a company in the free zone
Establishing a company in the UAE free zone offers many advantages that make it an ideal destination for local and international investors. The most prominent of these advantages include:
- Full foreign ownership: Allows foreign investors to own 100% of the company without the need for a local partner.
- Tax exemptions: Companies in free zones enjoy exemption from personal and corporate income taxes, in addition to no value-added tax in some cases.
- Ease of transferring profits: Free zones provide complete freedom to transfer profits and funds outside the country without currency restrictions.
- Simplified procedures: The process of establishing a company in the free zone is quick and flexible, with simple procedures for registering the company and obtaining the required licenses.
- No import and export restrictions: Free zones provide exemption from customs duties on import and export, which reduces operational costs.
- Infrastructure Facilities: Free zones provide modern infrastructure and world-class facilities such as offices, warehouses, and logistics services.
- Residence Visas: Free zones grant residence visas to investors and employees, making it easier to move and work in the country.
- Strategic Location: The UAE is located in a prime geographical location, making it an easy access point to Asian, European, and African markets. These advantages make establishing a company in a free zone an attractive option for growth and expansion into global markets.