Free zone company formation dubai is much better option for those who does not want the overhead of local partner. Free zone company setup allow investor and owner of the company to do business by their own style. Dubai Freezone company setup has come in action according to a specific business need, and offer licenses to companies and entities within those classifications. For each free zone there is a separate body structure or authority. This authority is called free zone authority, which is responsible for the management of that free zone. The authority is responsible for issuing licenses and employee visa. Free zone authority has their own rules and regulations to issue licenses. There are no taxes for free zone company setup, 100% foreign ownership and customs privileges. This makes the free zones the most favorable locations in the Middle East for international operations.
Shams Consultant provides a full range of certified services to client for their business setup in dubai free zone. We are giving all support which you may required for registration of your new company and employment visas. We are ready to get you from start up till the end of getting your license.
characteristics of Freezone Company Formation:
Dubai freezone company setup is best option for the expat. As there is 100% ownership is given to foreign investor in free zone. Therefor foreign investor loves to use this option for their business in UAE.
The second main reason for Dubai freezone company setup is the tax exemption. In UAE free zones are tax free or very low so it is also a very attracting factor for foreign investor to open their era in free zone.
No trade barrier
Dubai freezone company setup has no trade barrier. So any free zone company can has their own decision to trade with other companies all over the world with no limitation of trade quota.
Virtual office or flexi disk
For small business which does not afford the high cast of complete office secretory and directors, Dubai freezone company setup allow a flexi disk and virtual offices. This mean an individual can also start their business, by just to have their flexi disk.
No import and export duties
Dubai freezone company setup has no import and export duties. And has no limitation on hiring employee outside off their jurisdiction. So it makes the free zone option on the top of other for those who is just concern with importing and exporting goods to other countries.
Availability of workforce
U.A.E provide opportunity for skilled worker, so they love to work in U.A.E. for free zone company setup there is no worry to get the right worker for the right job.
Another important characteristic of free zone company incorporation is confidentiality. The assets are kept in confidential for all the owner of the free zone companies by the authorities of free zone.
Procedure of company formation in dubai free zones
There are thousands of company’s functions in Dubai free zones. Since the Formation of these Dubai free zones, over the years Dubai free zones has produced massive amount of employment opportunities for both Nationals and Expats in UAE. The main idea behind the formation of Dubai free zones is to offer companies, private business and government organizations to keep the 100% ownership in company formation in dubai free zones by himself without the need to have a UAE national partner. On the other hand in Mainland Company you require a local sponsor to setup a company. Free Zone Companies do not require a local sponsor as a partner.
Each Free Trade Zone has its own rules and regulations. Company formation in dubai free zones fluctuates between Free trade zones. In common, the procedure to setup a free zone company in Dubai can be summarized in the following steps (please note that some of these steps may not be required in some Free Zones).
- Determine a legal structure Free zone company formation in dubai
- Determine the type of license for Business setup in dubai freezone
- Confirm the business activities for Business setup in dubai freezone
- Confirm the business facilities for Business setup in dubai freezone
- Creating of business plan for Free zone company formation in dubai
- Verify the fees and other charges for Company formation in dubai free zones
- Submit application and documents for Business setup in dubai freezone
- Secure the preliminary approvals for Free zone company formation in dubai
- Payment for Company formation in dubai free zones
- Sign the agreements and other documents for Dubai free zones company
- Receive your License for Dubai free zone companies
Now let us have a close look at the above steps for Company formation in dubai free zones
Determine a legal structure Free zone company formation in dubai
The first step in free zone company formation is to select the legal structure. The legal structure of dubai free zone companies varies according to the number and nature of the partners involved. Documentation required, costs etc also dubai free zone companies change depending on the legal structure of the company. Documents needed for a corporate partner (or a branch entity) would be different from those required for a single shareholder.
Determine the type of license for Business setup in dubai freezone
The 2nd step in Business setup in dubai freezone is to decide the license type that permits your business activity. In common, Free Zones offer the following types of business license;
Free Zone Commercial License
Business activities such as repairing, workshops etc would need a commercial license.
Free Zone General Trading License
A General Trading license for Business setup in dubai freezone allows you to deal with almost all types of goods with the obvious exemption of banned goods and products that need special approvals. Normally the general trading license is relatively more expensive than the trading license.
Free Zone Consultancy / Service License
Service businesses such as consultancy, accountancy, legal firms etc may choose a consultancy license for Business setup in dubai freezone.
Free Zone Trading License
A trading license for Business setup in dubai freezone allows you to carry out trading activities (buying, import & export, selling) of limited number of goods and commodities. Most of the Free Zones allow trading in around 3 categories of items under a trading license.
Free Zone Industrial License
Activities such as manufacturing, packaging, processing and assembling fall under the Industrial License for Business setup in dubai freezone.
Confirm the business activities for Business setup in dubai freezone.
Not all Dubai free zones allow all type of activities. Some of Dubai free zones specialize in certain activities. So it is important that you check that your proposed activities are allowed by the Free Zone of your choice. Moreover, there are restrictions over the number activities allowed.
Confirm the business facilities for Business setup in dubai freezone
Do not assume that all Dubai free zones offer all types of facilities. However most of the free zones offer office space, warehouse etc availability can be a key factor. So you need to consider the availability of the vital facilities provided by the Free Zone before starting Business setup in Dubai freezone.
Creating of business plan for Free zone company formation in dubai
A concrete business plan is required for Free zone company formation in dubai. As a matter of fact, your business plan will not just stay alive the purpose of providing guide line for you, but also it is the main part of your business setup. You would also be required to submit your business plan to the Dubai free zones authority for approval before you can be granted business license to operate. Many investors make the mistake of not preparing a business plan for Company formation in dubai free zones. A business plan helps you to set your business targets and milestones. A proper business plan assists you to keep trail of the performance of your business. So a business plan is a must not only for meeting the requirements of Free zone company formation in dubai, but also for efficient running of your business.
Verify the fees and other charges for Company formation in dubai free zones.
This is the most important step in Company formation in dubai free zones. Many investors, who want to incorporate their company in one of Dubai free zones go for the cheapest option available based on the clear costs. They don’t understand the hidden charges to be paid for the services that are essential for the survival of their businesses. The total cost of Dubai free zone companies can be classified into two parts.
- First year cost for Company formation in dubai free zones
- Yearly renewal costs for Business setup in dubai freezone
Some of Dubai free zones propose packages that are cheaper than the normal company incorporation costs. Investors fall prey to these packages offered by certain Free Zones and consultants without understanding that they have to pay the package charges every year. The normal yearly renewal charges could be cheaper than the cost of the packages. In addition, most of these packages consist of only a business license and not the cast of office sites. This may not be very useful if you are serious about your business. On the positive side, your efforts to decide the real cost of Company formation in dubai free zones is very limited in the case of Business setup in dubai freezone packages.
If you are ready to spend some time and resources to collect the data, discover the hidden charges and test the real costs for Company formation in dubai free zones, you can have considerable savings on your investment. It may take many resources, including many visits to various Free Zones, understanding the procedure followed by the Free Zones, asking the right questions, collecting the cost details etc. The most difficult part would be to discover the hidden cost. For starters, it would be ideal to appoint a business setup consultants in Dubai to do this job for you.
Submit application and documents for Business setup in dubai freezone
The application form and other legal documents are necessary to start Business setup in dubai freezone. Depending on the nature of the business (establishment / partnership, branch / subsidiary, trading /industrial /services), the documents required may fluctuate. In common you would need the following documents.
- Business plan.
- Visa copy (if you have an existing UAE visa).
- Passport copies of shareholder(s).
- Bank statements (to prove the capital amount).
- Free Zone application form.
- No objection certificate from the current sponsor (for UAE residents only).
To set up a subsidiary or branch of a foreign company in Dubai free zones, extra documents would be required.
Secure the preliminary approvals for Free zone company formation in dubai
Currently some free zones in Dubai may call for prior approvals from other governing departments to start the free zone company formation in dubai. These approvals could be from;
- Environment Department: For certain activities, particularly industrial activity, clearance certificate from the Environment Department is necessary.
- Immigration Department: Some Free Zones process this request for the clients; some requires the client to process it by themselves where some Free Zones do not need this approval at all. Though it beneficial to make sure that your visa application would not face any problems after the company formation, it would delay the entire process by a few weeks.
- Ministry of Health: certain cases require clearance certificate from the Department of Health to carry out activities related to food products, pharmaceuticals etc.
Payment for Company formation in dubai free zones
Now you are ready to make the payments. With some of Dubai free zones, you have the option of making the payments in installments; however, pay attention to the total cost in this case could be higher than the normal charges by a minimum of 10% and up to 50%.
Sign the agreements and other documents for Dubai Free Zone Companies
After you make the payments, the concerned free zone authority would prepare the suitable legal documents and you would be requested to sign them in the presence of an executive/official of that particular Dubai free zone.
Receive your License for Dubai free zones company
Once you complete all the above steps it’s time to receive your Business setup in dubai freezone License. Along with the business license, some Free Zones give related documents such as certificate of incorporation, share certificates etc. Deciding on the best free trade zone in Dubai for your business requirements depends on many factors. So it is important that you spend large amount of time on calculating the options available for your business and your business requirements.
FAQ | Dubai freezone company setup
Q: What is a Free zone?
A: A free zone is called a tax free zone or a free trade zone sometime its called a free economic zone.
Q: What is the difference in Dubai freezone company and in Mainland company?
A: In a Dubai freezone company setup an expatriate can earn 100% share, while in Mainland expatriate can only hold 49% and a local sponsor will get 51% of share. In a Dubai freezone company setup the company cannot allow to open office outside the Free zone while Mainland Company is free to open their office in anywhere in UAE.
Q: Which Free zone is best for freezone company formation?
A: As we know each free zone carry its own unique characteristic which distinguish it from other free zone, to decide which free zone is best suitable for your free zone company formation is depend upon the following factors :-
- Nature and size of your company.
- Activity & Facility required for your Dubai freezone company setup.
- Visa required for your staff.
- Location and office space required
Q: Can a person be a partner in more than one Dubai freezone company setup?
A: Yes. A person can be a partner in multiple Dubai freezone company setup.
Q : Is there any income tax for freezone company formation in UAE?
A : For freezone company formation there is no corporate or personal tax.
Q : What are the legal forms available in Dubai freezone company setup?
A : In freezone company incorporation Dubai the following legal forms are available.
- Branch of Foreign Company
- Free Zone Establishment
- Free Zone Company
Q : The selection of free zone for freezone company formation Dubai?
A : Dubai is rich of free zones, each one serve a specific purpose, and fulfills a specific need of the client. So for Freezone Company formation Dubai the selection of the right Free Zone is subjected to the type of activity the company wants to employ. Our team at Shams Consultant can assist you to choose a suitable and beneficial free zone for your business.
Q : Documents required for freezone company formation?
A : The documents required for frezone company formation depend on the type of activity and the type of License and on the jurisdiction of free zone. There are three main type of freezone company incorporation
- Free Zone Establishment (FZE)
- Free Zone Company (FZCO)
- Branch Office
All these types of freezone company formation may not be offered to every free zone; but if it’s available to a free zone then the common list of document required for it is following.
Freezone company formation (FZE)
- Application form duly filled
- Profile or business profile of the proprietor
- Passport (PP) copy of the owner
- Original bankers reference Letter
Freezone company formation (FZC)
- Business profile of Shareholders
- Passport copy of Shareholders
- Original banker’s reference letter
- Board Resolution
- Passport (PP) copies of Manager’s
- Sampling signature of the manager
- Original FZCO application
Freezone company formation (BRANCH)
- Certificate of Registration
- Memorandum and Articles of Association (MOA)
- Board Resolution
- Passport (PP) copy and attested signature of the Manager’s
- Profile of the Parent company‘s
Q : What is the difference between freezone company formation (FZE) and freezone Company formation (FZCO)
A : The main difference between freezone company formation (FZE) and freezone Company formation (FZCO) is the number of shareholders required for Establishment of the company. FZE requires only one shareholder either a single person or a corporate, while FZCO is requires 2 or more shareholders.
Q : What is the difference between offshore and freezone company formation Dubai?
A : Both offshore and freezone company formation Dubai are permitted to give 100% ownership to foreign investor, both are allowed to own a bank account and invoice his clients.
However freezone company setup Dubai has some extra advantages over an offshore company.
- In Freezone Company Incorporation investor can own his own office in freezone area, and offshore are not allowed to take office.
- In freezone company formation company are allowed to get visa for his employees.
- Invester and other employee are allowed to sponsor their families unlike offshore company.
- Freezone company setup allowed to trade in uae free zone, while offshore is not allowed to trade.
Advantages of Freezone Company formation:
- Dubai Freezone company setup has zero corporate and personal tax.
- Freezone company setup Dubai has full range of business activities licensed
- In Free zone Company expat has 100% business ownership.
- It has Simple export & Import conditions.
- Freezone company formation has 100% capital repatriation
- In Free zone Company formation has no trade barriers or quotas
- Free zone Company can be setup by New companies, branches, subsidiaries, representative offices, etc.
- In dubai freezone company setup Sole shareholders and corporate are permissible
- in Free zone Company Formation has no restrictions on hiring expatriates
- Free zone Company formation has Freehold offices for sale or lease
- Free zone Company Setup has Flexi desk/serviced offices
- Unique industry clustering and purpose-built infrastructure
- 3 years UAE residence visa