Free Trade Zones are regions in the UAE that have extraordinary tax, customs and imports benefits for companies established in there. There are many Freezones throughout UAE. They are planned to encourage overseas venture with easier start-up processes, employment and immigration processes, 100 percent proprietorship for Expatriates and other services. Each free zone has its own authority and its own rules, which are pertinent to venture capitalist looking to set up corporations in those zones.
Every free zone bids license to the firms as per their set of regulations. An independent Free Zone Authority (FZA) administers each free zone and is accountable for giving out Free Trade Zone (FTZ) operation license and supporting in forming their corporate.
There are many advantages of the Free zones:
- Permits 100 per cent expatriate proprietorship of company with no obligation of local sponsor or local service agent
- Abdication of corporate taxes
- Exclusion from personal taxes as well as import and export taxes
- 100 per cent repatriation of revenue and profits
- Credentials is less and more suited to foreign venture capitalist
- Long-term leasing options are obtainable at great terms to investors
- Employment and workforce procedures are simplified, quicker and inexpensive
- Easy accessibility of legal, housing, immigration, employment and other facilities
- Incorporation is quicker than when done outside free zones
A new enterprise can be registered by an investor in the form of a Free Zone Establishment(FZE) or simply establish a division or representative office of their prevailing or parent company established within UAE or overseas.
FZE is a limited liability company administered by the guidelines and principles of the Free zone in which it is established. The requirements of the Commercial Companies Law (CCL) do not apply to FZEs.
At present there are 45 Free zones operating in UAE.
How do you determine the right freezone for your business?
Decide the commercial activity of the business
For each free zone has its particular set of particular activities which are permissible to be executed within the jurisdiction. There are also different instructions in each free zone when it comes to how many commercial activities are permitted by means of one commercial license.
Check out the facilities the commercial will require
A corporate has numerous necessities to operate, which depends upon its commercial activities. For instance, if you are planning on hiring staffs, you should opt for an office. Take into account the convenience of the facilities you need as they may not be available in all Free Zones.
Select a free zone based on the capital to be invested
Major requirement for registering a company in UAE is to deposit a share capital amount, which differs in each free zone. Company registration charge is also a significant feature to ponder upon.
Select the freezone based on the Emirate
You may require locating your company in an Emirate which is recognized by your suppliers, clients or even your employees.
This blog is written by Ms. Anushka Singh, Partner Relation Executive at Flyingcolour Business Setup, VAT and Accounting Services, Dubai. If you have any question regarding setting up a business in any freezone across the UAE then please contact us at +971 4 4542366 or email us at info[at]flyingcolour[dot]com.