Introduction
A free zone is a special area in the UAE made to bring in foreign investments. There are over 45 free zones in the UAE. Some popular ones are JAFZA, DMCC, TWOFOUR54, and SAIF Zone.
Setting up your business in a UAE free zone gives many benefits. The best ones are 100% ownership and zero taxes. This guide explains all you need to know about free zones.
What is a Free Zone?
A free zone, or free trade zone, is a one-of-a-kind area in the UAE. It aims to improve economic growth and bring in overseas investments. These zones are built with facilities and services to help businesses.
Each free zone focuses on certain business activities and licenses. For example:
- DMCC focuses on trade in gold, diamonds and other commodities
- JAFZA focuses on general trading and logistics
The government gives special benefits to companies in these zones to drive business activity.
Key Benefits of a Free Zone Company
There are many major benefits of setting up your company in a UAE free zone:
100% Business Ownership
Unlike mainland UAE, free zones allow 100% ownership by foreigners without needing a local Emirati partner. This gives full control in making business decisions.
Zero Taxes
Free zones provide a zero tax environment. This means:
- No corporate tax
- No income tax
- No import or export duties
Companies only pay a low yearly license fee.
Flexible Visa Options
It is easy to get visas for investors, staff, and family members. Below are the visa options:
- Investor visa – For company shareholders
- Employee visa – For skilled workers and managers
- Family visa – For spouse and children
Visa eligibility and fees vary across different free zones.
Fast Company Registration
Get swift approval on setting up your business and visas in as little as 2 weeks in some free zones. The process is very smooth and efficient.
Prestigious Address
Running your business from a UAE free zone gives a respected regional address. This builds trust with international clients.
Government Backing
Free zones provide an ecosystem supported by the UAE government. This includes world-class infrastructure. It gives an advantage over setting up independently.
Step-by-Step Process of Setting Up in a Free Zone
Below are the key steps to set up your company in a UAE free zone:
Choose a Relevant Free Zone
Research free zones in the UAE. Then shortlist one that focuses on your activity or industry. For example:
- For IT services, Dubai Internet City
- For consulting services, DMCC or Creative City
Select a Business Activity
Carefully select your business activity based on the free zone’s rules. Some zones have restrictions. Get expert guidance to pick the right license.
Apply for Trade License
Submit the trade license application to the free zone authority. This includes:
- Proposed company name
- Shareholder and director details
- Selected business activity
Get Approval and Office Space
Once approved, the free zone will issue:
- Trade license
- Lease agreement for office space or flexi desk
Apply for Visas
With the trade license, you can now apply for residence visas for:
- Company shareholders
- Managers
- Key staff
Commence Operations
- With the visas, license and office space in place – your free zone company can start operations!
Conclusion
Free zones make setting up a business in the UAE very appealing for foreign investors and entrepreneurs.
With benefits like 100% ownership, zero tax and government backing, free zones provide the ideal environment.
Carefully select a relevant free zone and permitted activity suited to your industry. With the right advice, your company can be up and running smoothly in just 4-6 weeks!
FAQs
A wide range of trading, services, tech and industrial activities are permitted across the 45+ free zones. Each one focuses on specific sectors.
The cost varies by free zone but expect between AED 10,000 to 60,000 for license fees, visas, workspace etc. Consultancy charges may apply.
Yes, most free zones allow you to sponsor work residence visas for owners, directors and employees. The eligibility criteria differs across each one.
