The UAE, with time, has turned out to be one of the best business hubs in the world. One of the main reasons for this industrial revolution is the free zones. These are the areas that allow complete foreign ownership by accepting foreign investors who set up industries in the areas offering tax concessions and duty benefits.
The UAE is filled with such free zones wherein Dubai is leading the charts with impressive numbers. They are a boon for many foreign investors as they can avail of services and concessions that are not offered in the other areas of the UAE.
Free zones allow you to operate your business in the area with no tax levied on the products or services. These areas make up to be the best place for foreign investments. This blog briefly discusses the essentials you must keep in mind before investing in the UAE.
Things to consider before registering your company in a free zone area
UAE is a growing market, and investing in its market is a no-brainer, but at the same time, business owners should focus on the positives and negatives of the same. Given below are some of the things you need to keep in mind before making any decision.
- Be legally strong
All the seven emirates of the UAE have their laws, rules, and regulations. The free zones in every region of the UAE have a different set of laws. It is very important to become legally strong by taking legal advice from some of the top advisors before investing in the UAE.
There should be an experienced legal expert on board throughout your business journey in these free zones. This might increase your overall budget, but it will help prevent any legal issues your business might face in the future.
- Know your free zone entities well
There are two main types of free zone entities in the UAE; The Free Zone Company (FZC) and Free Zone Establishment (FZE). Only one shareholder is required to set up a business in the Free Zone Establishment Entity. In contrast, two or more shareholders must set up a business in the Free Zone Company Entity.
These entities have different rules and regulations that might change from region to region in the UAE. It is very important to know the entities, their laws, and their rules before investing in the UAE to avoid future problems.
- Beware of the hidden charges
The free zones in the UAE are set up to provide business opportunities to investors at a low cost. While the cost might look low, hidden charges such as administration fees, card fees, etc. can still hound you.
- Business type-based selection
The UAE has numerous free zones providing different opportunities. It is very important to know the area based on your business proportion. It is important to choose a free zone depending on the type of business you are looking forward to venturing in.
Some of the most important factors to consider are the state, area, population, etc. There are also minor chances of companies facing geographical limitations. Still, it is extremely important to scout for the perfect area for your business.
- Know the prohibitions
UAE allows import and export on a large scale through the free zones. Some items are prohibited in different free zones. The UAE has prohibitions over weapons, narcotics, and imports and exports to an economically boycotted nation, etc.
- Designated free zones
There are certain free zones in the UAE designated to a specific set of businesses. There are special ones in Dubai for the healthcare and media industry. Having a fair knowledge of them will help you avoid any future problems in your business.
Set up your business with FlyingColour
Established in 2004, FlyingColour is everything you need to set up a business in the UAE. With top management advisory services in both government and private sectors, FlyingColour is one of the most trusted business advisory firms in the UAE. To get more information regarding investment in the free zones or to book our services, drop your queries on the email ID mentioned on our website or call us on our toll-free number.