Dubai is one of the most prominent global investment destinations, especially in the field of establishing companies. Among the many options available to investors, Dubai’s free zones stand out as an attractive and distinctive option due to the unique advantages they offer. Establishing a company in one of these zones allows investors to benefit from a sophisticated business environment, while providing facilities and tax exemptions that were not previously available.

Dubai’s free zones feature a special legislative system that makes it easy to set up and run a business. This system provides simplified and fast registration procedures, allowing new companies to start their operations efficiently and quickly. In addition, the 100% foreign ownership of companies in the free zones ensures investors have complete control over their investments, without the need for a local partner, which adds to the attractiveness of these investment environments.

Free zones also offer attractive tax exemptions including corporate and personal income tax exemptions, which improve profit margins and reduce operating costs. Customs facilities are part of this system, where investors enjoy exemptions from customs duties on imports and exports, reducing the financial burdens associated with shipping and logistics.

In addition to the financial benefits, free zones provide modern and advanced infrastructure and integrated commercial facilities, which contribute to creating a favorable business environment that supports innovation and growth. Through this article, we will review the basic steps for establishing a company in Dubai’s free zones , and highlight the benefits that can be achieved for your company in this distinguished investment environment.

Free zones available in Dubai for company formation

In Dubai, there are a number of free zones that provide a favorable environment for setting up companies in the free zone . Some of these free zones include:

1. Jebel Ali Free Zone (JAFZA): It is considered one of the oldest and largest free zones in Dubai and provides a suitable environment for industrial and logistics companies.
2. Dubai Technology and Media Free Zone (TECOM): Focuses on companies in the technology, media and creative sectors.
3. Dubai Aviation City Free Zone: Targets airlines and aviation-related services.
4. Dubai Industrial City Free Zone: Provides a favourable environment for companies in the construction and engineering sector.
5. Dubai Retail Free Zone: Focuses on companies in the retail and shopping sector.
6. Dubai Tourism Free Zone: Targets companies in the tourism and hospitality sector.

Steps to establish a company in the Dubai Free Zone

Here are the general steps to establish a company in a free zone in Dubai :

• Market Study and Business Plan: Conduct a market study to understand the competitive environment and market needs, and prepare a detailed business plan that outlines the company’s goals and how to achieve them.
• Choose the type of company: Decide what type of company you want to establish, whether a sole proprietorship, limited liability company, or partnership.
• Choosing a location and free zone: Identify the free zone in Dubai that suits your company’s activity and confirm the laws and regulations of that zone.
• Determine the required capital: Determine the capital required to establish the company and ensure that it is available.
• Choosing a company name: Choose an appropriate name and make sure it is available and complies with local laws and regulations.
• Submitting a company establishment application: Submit a company establishment application to the relevant authority in the free zone, fill out the required forms, and submit the necessary documents.
• Complete the legal procedures: Complete the legal procedures necessary to establish the company and officially register it.
• Obtaining licenses and permits: Obtain the necessary licenses and permits to operate the company in the free zone.
• Open a bank account: Open a bank account in the company’s name and deposit the capital into it.
• Hire employees: If necessary, hire the employees needed to start the business.
• Compliance with local regulations: Ensure compliance with all local regulations and laws related to doing business in the free zone.

Cost of establishing a company in the Dubai Free Zone

The cost of setting up a company in a free zone in Dubai can vary greatly and depends on several factors such as the type of company, the amount of capital, the company’s activity, and the services required. Here are some points that can affect the cost of setting up a company in a free zone in Dubai:

• Licensing fees: These include company licensing fees that vary based on the type of company and its activity.
• Capital Required: Some types of businesses may require a specific amount of capital.
• Registration fees: Includes company registration fees and varies depending on the type of company.
• Business fees: include the administrative and legal costs of establishing the company.
• Legal Consultation Costs: You may need legal advice to establish the company and this can be an additional expense.
• Rental costs: The cost of renting the office or space needed for the company.
• Additional service fees: such as consulting or logistics services.
• Visa and Residence Fees: If you are planning to bring in employees or managers from abroad.

Documents required to establish a company in the Dubai Free Zone

To set up a company in a Dubai free zone, you usually require a number of necessary documents. These documents may vary slightly depending on the type of company you wish to set up and the type of business activity you intend to engage in. Here is a general list of the required documents:

1. Company Incorporation Form: Contains company details such as company name, company type and proposed activities.
2. Copy of the founders’ passport: A copy of the passports of all the founders of the company.
3. Portraits: Recent portraits of the founders.
4. Bank Reference Letter: Proves the founders’ financial competence and ability to finance the company.
5. Tenancy Contract: A copy of the lease contract for the office that the company will take in the free zone.
6. No Objection Certificate: This may be required by the relevant government authorities in Dubai to confirm the legality of the company’s establishment.
7. Business Plan: A document that outlines a company’s future plans and business goals.
8. Shareholders Agreement: If the company is owned by several people, this form defines the rights and obligations of the shareholders.

Tax benefits in Dubai free zones

In Dubai’s free zones, businesses enjoy significant tax benefits that make it an attractive business destination. Here are some of the key tax benefits offered by these free zones:

• No Income Tax: In Dubai free zones, there is no income tax on companies for a certain period, and in some cases, tax exemptions are for life.
• No VAT: Some free zones in Dubai are VAT free zones.
• Freedom to transfer profits: Companies in Dubai free zones enjoy great freedom to transfer their profits without restrictions.
• No real estate tax: In some free zones, there is no real estate tax on commercial property.
• No fees on international transfers: Some free zones allow no fees on international money transfers.
• Facilities for foreign clients: Dubai’s free zones provide a favorable environment for foreign investments with administrative and tax facilities.

In conclusion of our article on establishing a company in Dubai’s free zones, it is clear that this business environment offers attractive investment opportunities for many entrepreneurs and investors. Dubai’s free zones enjoy unique advantages that make them a preferred destination for establishing companies, including 100% foreign ownership, tax exemptions, and customs facilities. These advantages not only enhance competitiveness, but also contribute to accelerating business growth and reducing operating costs.

By taking advantage of the favorable business environment provided by free zones, investors can focus on developing their business strategies and growth without worrying about administrative and financial hurdles. Free zones also provide modern infrastructure and advanced facilities, which enhance the efficiency of business operations and provide access to a wide network of partners and clients.

Working with specialized consultants such as Itqan can have a significant impact in facilitating the incorporation process. With its expertise in handling legal and administrative procedures, Itqan helps companies overcome challenges and enhance their success. Itqan provides integrated services that include registration, obtaining licenses, and managing legal aspects, ensuring that the incorporation process is accelerated and all requirements are met.

The most important frequently asked questions about establishing a company in the Dubai Free Zone