The Simple Guide to Dubai Free Zone for Company Setup UAE

Setting up a company in Dubai free zones has many benefits. The free zones offer 100% ownership and no taxes. There are over 30 free zones to pick from. Choosing the right one can be tricky. This guide will help you pick the best free zone for your business.

What to Look at When Comparing Free Zones

When picking a Dubai free zone, there are a few things to look at:

Type of License Activities

Each free zone allows certain businesses and activities. You need to pick one that matches what your company will do.

• For example, the Dubai Multi Commodities Center (DMCC) allows trading of gold and diamonds.
• The Dubai Internet City (DIC) allows tech companies.

Ownership Rules

• In general, free zones allow 100% foreign ownership.
• Two exceptions are the DMCCA and DAFZA.
• The DMCCA requires a majority UAE partner.
• DAFZA allows 100% ownership only for certain licenses.

Share Capital

• Most free zones have a minimum share capital requirement to register.
• Share capital just stays invested in the company. It determines fees.

Office Space

• Every license needs work premises.
• You can rent or buy offices in the free zone or go for flexi desk options.
• Prices and sizes differ across zones.

Visas

• With a free zone license, you can sponsor residence visas for owners and staff.
• But some cap the number of visas.

Costs

• License registration and renewal fees vary starting from AED 1,500 per year in Academic City.
• High costs zones are DIFC and DMCC.

Tax Benefits

• All free zones offer zero tax on income and profits.
• Some also exempt duties on imports and re-exports.

Top 5 Dubai Free Zones Compared

Now let’s look at the top 5 Dubai free zones in more detail:

JAFZA

• Permitted Activities: Trading, manufacturing, services, consulting
• Foreign Ownership Allowed: Yes, 100%
• Share Capital Requirement: None
• Office Spaces: Flexible choices from shared desks to large warehouses
• License & Renewal Cost: Competitive, from AED 16,000 per year
• Tax Incentives: Full corporate tax exemption, no import duties
• Types of Visas: Investor, employee, dependent

JAFZA is popular for trading, manufacturing, consulting, marketing, IT, and more. It offers flexible office options.

DMCC

• Permitted Activities: Commodities like gold, diamonds, tea, oil
• Foreign Ownership Allowed: 51% local partner needed
• Share Capital Requirement: AED 50,000
• Office Spaces: Serviced & virtual offices available
• License & Renewal Cost: High, over AED 20,000 per year
• Tax Incentives: Full tax exemption
• Types of Visas: Company shareholders and staff

DMCC focuses on commodity trading of items like gold, diamonds, metals and oil. It needs 51% local ownership and has high license fees. But it offers excellent purpose-built infrastructure and facilities for traders.

DAFZA

• Permitted Activities: Trading, logistics, warehousing, distribution
• Foreign Ownership Allowed: 100% for certain activities
• Share Capital Requirement: Varies based on license type
• Office Spaces: Warehouses, flexi desk, and offices
• License & Renewal Cost: Average, around AED 16,000 per year
• Tax Incentives: Full tax exemption, no import or export duties
• Types of Visas: Max 5 visas per company

DAFZA allows trading, logistics, transport, freight, distribution, and warehousing companies. 100% ownership is allowed only for certain activities. It offers visa restrictions but has customs duty benefits.

DHCC

• Permitted Activities: Healthcare, hospitals, and medical services
• Foreign Ownership Allowed: 100%
• Share Capital Requirement: AED 500,000
• Office Spaces: Commercial spaces available
• License & Renewal Cost: Starts from AED 11,000 per year
• Tax Incentives: Full tax exemption
• Types of Visas: Flexible, based on office size

DHCC caters to the healthcare industry like hospitals, clinics, medical education, and allied services. It requires half a million AED capital but offers custom-built medical infrastructure.

DWC

• Permitted Activities: Transport, logistics, aviation, and aerospace
• Foreign Ownership Allowed: 100%
• Share Capital Requirement: None
• Office Spaces: Warehouses, offices, staff accommodation
• License & Renewal Cost: Competitive pricing
• Tax Incentives: Full tax exemption
• Types of Visas: Flexible visa options

Dubai World Central focuses on freight, logistics, air transport, aviation, and aerospace sectors. It has no minimum capital needs and competitive license fees. DWC offers excellent purpose-built transport infrastructure.

Key Takeaways

Choosing the right Dubai free zone depends on your industry and objectives. Seek expert advice from a company formation consultant. They will guide you through picking the best free zone, business activity, and license type tailored for your needs. With over 30 zones to pick from, get personalized guidance to make the best choice!

Conclusion

Choosing the right Dubai free zone for your business setup can be a game-changer in terms of capitalizing on the emirate’s strategic location, business-friendly environment, and favourable policies. With over 30 free zones catering to various industries, the options can seem overwhelming. However, by carefully evaluating factors such as the type of business activities, ownership rules, capital requirements, office space options, visa allocations, and cost considerations, you can narrow down your choices to the free zone that best aligns with your company’s objectives.

It’s important to remember that each free zone has its unique strengths and specializations, catering to specific sectors like trading, manufacturing, logistics, healthcare, or technology. By selecting the appropriate free zone, you can benefit from industry-specific infrastructure, tailored regulations, and a community of like-minded businesses, fostering potential collaborations and networking opportunities.

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