If you are considering starting a free zone business, then Dubai is the ideal place. As one of the most investor-friendly and lucrative destinations, Dubai offers free zone business owners ample opportunities. The diversity of the clientele makes the country a favourite destination for entrepreneurs.
The Meaning of Freezone Business
A business that gets classified as Freezone operates under free trade zones. These companies trade goods and services. Favourable taxes get levied on them for their trades. They get custom rates. Do not mistake Free zone and offshore companies for the same.
A Dubai freezone company formation takes place under the legal licenses of Dubai corporate. These companies carry out their work under specific terms and conditions. Setting up a freezone company in Dubai is a relatively straightforward process. It requires very little paperwork. The process is not as time-consuming as setting up an offshore trade business.
The Location of Zones
There are about 67 freezones in Dubai. A new zone is getting introduced each year—the freezones house over 150,000 companies in the country. The freezone companies operate mainly in the trade, service and industrial sectors.
Choice of Multiple Free Zones
As the corporate sector gets increasingly competitive, companies try to find land and clientele in the country. Firstly, to select a free zone, have an estimated budget. Your budget will determine which free zone your company can acquire to set up their business.
You can opt for port locations if the company deals with trading goods. However, the city space is more appropriate for companies specialising in business transactions and activities. If the selection of the business is online, then the business owner should set up in the small northern emirates.
The emirates offer great cost-effective license packages that help to maintain the operational costs to a minimum. The Dubai Freezone company formation allows for keeping the operating costs to a minimum, prioritising the company’s requirements.
Ways in Which Free Zone Company Is Beneficial
The UAE government has taken extensive measures to invite and encourage offshore companies to set up trade in the UAE. These companies and the novel and innovative government policies have attracted foreign customers and clients in crowds. A significant part of the UAE’s economy depends on the corporate sector’s entrepreneurial spirit.
The business-friendly policies encourage businesses to come and start their venture in the UAE. The 50 free zones of the UAE allow a business person to establish any one of the three following businesses-
- Free zone establishment (FZE)
- Free zone Company (FZCO)
- Branch of a foreign company
The Benefits ofthe Free Zone
Thefree zone company formation UAE in Dubai lies within the national boundaries. It does not include the inconvenience of customs regulations, services, commodities, and other trade goods in these areas. The companies in the free zone pay little to no taxes based on specific arrangements.
- High Tax Cut
The tax cut is highly beneficial to the growth of businesses. It promotes economic activity on the mainland. The companies have a higher rate of success. That is a guaranteed fact since they do not have to pay taxes. Each free zone in Dubai operates as a separate legal body within its authority. This authority is in charge of administration, registration and licensing within the boundaries of the respective free zone.
- 1005 Foreign Ownership
The business owner, in a free one, has full authority over their business. Foreign investors can fully own a freezone company in the UAE. There is no need for any local sponsor. Any nationality can own a business.
- Confidentiality Of Information
Free zone authorities are strict about maintaining confidentiality. They do not reveal information regarding the ownership of assets of freezone businesses.
- Zero Trade Restrictions
There are no trade limitations or business volume that such businesses can conduct with other companies outside and within the zone.
- No Currency Regulations
There is a lack of currency regulations in the free zones. Therefore, it makes business transactions so easy. The profit is soaring in the free zones due to the lack of currency regulations.
- Tax Exemption
Free zone jurisdictions get exempted from import and export taxes. Thus, they have enough capital for global trade.
- Easy Business Incorporation
The business incorporation process in the free zone is relatively hassle-free and easy. Some can find space for the business establishment without much difficulty. The business owners have a variety of warehouse and business office options. These processes make the incorporation of the business relatively more manageable than others. The licensing process lasts only a few days.
Ways to Incorporate Free Zone Company
The Free Zone Authority (FZA) issues the trade license for the business. The FZA is an independent body which governs the activities of the company. The company must adhere to the list of activities specified under the Free Zone business activities list. They understand how the free zone jurisdiction works and will select one that fits your business model.
Here are the rules to incorporate the business:
- Determine the Legal Structure of the Company- Select the legal structure you want for your company. Some free zone jurisdictions need a minimum capital. The capital prerequisite depends on the type of free zone. Some free zones do not meet the minimum requirement in the Emirates.
- Get A Trade Name- It is imperative to find a suitable and unique trade name that matches the company’s business service. The company will have to get registered with this trade name. Therefore, the name has to be new.
- Get A Trade License- To start the business; the company must have a trade license. The license enables the company to carry out trading onshore and even offshore. The company gets a permit based on its activity. There are many types of licenses-Industrial, Commercial, General Trading, Professional, Manufacturing and Warehousing.
For professional licenses, one can set up a business of law firms and consultancies. For the manufacturing one, the company can be a good factory. A general trading License covers multiple business ventures. The industrial one is to import and export commodities.
Establish An Office
The free zone company formation UAE allows the leasing or purchasing office premises. The business owner needs to consider the business type and labour force. After initial approval and registration, the company will get the business approval. Once they get all the licenses, they can commence their business.
Growing Economy
Due to the free zones and many business opportunities, Dubai has become a modern corporate hub. More and more companies are landing on the shores of the UAE, looking to commence their business in the land. The business sector and the growing economy play a role in the popularity of UAE among the company establishment owners.
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