Introduction
At present, Dubai houses twenty-eight specialized free zones. All promoting free trade thus allowing distant investors to set up businesses with full ownership and huge tax benefits. Every free trading zone is focused on a specific industry and offers distinct business licenses to companies operational within that industry.
What Is a Free Zone Company?
A free zone company in Dubai or Qualifying Free Zone Person (QFZP) is a standard company set up within a free zone. Such a commercial entity is entitled to hundred percent foreign ownership and a zero percent tax rate. Unlike companies set up by international investors in the mainland UAE that require registering with the Department of Economic Development (DED) of the Emirate of Dubai, companies in the free zone need to register with the independent Free Zone Authority (FZA) of the respective zone.
Companies registered in the free zone can spontaneously trade within the free zone and the global market. Even though there are limitations of trading with the UAE mainland, Moreover, unlike offshore companies set up in the free zones, owners of free zone companies can apply for numerous residence visas.
Formation of a Free Zone Company
- Deciding on the legal structure of a business is crucial. Hence, the foremost step towards free zone company formation is defining the legal framework of the company’s business activities. Depending on the business type and number of shareholders, the organization can fix whether to opt for a Free Zone Establishment (FZE), or Free Zone Limited Liability Company (FZ LLC), or Free Zone Company (FZ Co.). It can be a subsidiary or division of a prevailing local or overseas company in a free zone. It is important to note that not all free zones offer each type of company. Thus, consultation with the specific FZA may be required. The same applies to freelance permits.
- It is important to choose the most suitable zone for the company as there are several different types of free-trade zones specializing in diverse business activities in Dubai. Most free zones are focused on a specific industry type. However, some like Dubai Airport Free Zone and the Jebel Ali Free Zone support multiple sectors.
- Finalizing the company name is straightforward unless the trade name is already registered with the DED or it violates the “public morals” of the country.
- The next logical step towards business setup in the UAE free zone is applying for a business license, which requires submitting the filled application form and other required documents like copies of passport and business plan, depending on the chosen FZA. It might be necessary to submit further documents to obtain certain pre-approvals.
- If required, the applications for visas for the shareholder(s) and the employees can be initiated at this stage.
- As having a dedicated corporate bank account can be crucial to many free zone companies, this can be an essential final step to setting up business in the Dubai free zone.
- Selecting an office space may not be required, as many free zones allow businesses to run virtually. According to the Federal Telecommunications Regulatory Agency of the UAE, setting up a free zone company is quick, hassle-free, and requires minimal paperwork.
Why seek the help of A&A Associate Business setup service in Dubai?
Having professionals like an A&A Associate on your side makes Company formation in Dubai free zone easy. From the initial consultation through filing paperwork and license issuance, A&A Associate offers end-to-end solutions covering all aspects of company formation in any Free zone in Dubai.
