Dubai is arguably one of the best places to do business in. It has plenty of attractive business opportunities, including low tax benefits, the fastest emerging markets, as well as a strategic location. Another incredible thing that makes Dubai stand out is its free zones.
In this article, we are going to discuss everything you need to know about Free Zones in Dubai. Let’s delve into them!
What is a free zone?
A UAE free zone is a special economic zone where business owners get the benefit of keeping 100% of business ownership and they are spared from all kinds of taxation, such as Value Added Tax [VAT], Income Tax, Corporate Tax, and customs. The main objective of these free zones is to promote overseas investment and economic activities.
It is worth mentioning that all these free zones are governed by an independent Free Zone Authority [FZA] that issues operating licenses as well as regulates the activities of foreign-owned companies within the Free Zone.
While companies in these free zones generally benefit from operating in these regions, business owners must remember that to successfully register and run their businesses, having the right licenses and approvals is crucial.
The process of registering a company in the Abu Dhabi free zone includes determining the type of legal entity, selecting a name, applying for a business license, and finally, renting/buying an office.
Why should you choose a free zone to set up your business?
Here are some of the top reasons why you should consider setting up your business in Dubai Free Zones:
- Tax exemption
This is probably one of the top reasons why many investors prefer setting up their businesses in Dubai Free Zones. Free zone companies are exempted from VAT Tax, Income Tax, Corporate Tax, etc.
- Foreign Ownership
Another incredible reason that should prompt you to start a business in Dubai free zone is because of the complete foreign company ownership. This means that the foreigner doesn’t have to find a UAE national partner to form the company, which is usually the case when setting up a business in Dubai mainland. When you set a business in Dubai free zone, you will retain 100% ownership, regardless of your nationality.
- No currency restrictions
Currency restrictions are currency-related regulations imposed by the government on foreign currency transactions. When it comes to Dubai free zones, there are no currency restrictions. This, of course, makes financial transactions smoother.
- Import and export duty exemption
Import and export duties don’t apply to the free zone jurisdictions in Dubai. Of course, this helps in fostering international trade.
- Easy setup
Finally, another top reason is that process of setting up a company in a UAE free zone is straightforward. The application process generally depends on the nature of the business you want to venture into and the free zone you have chosen. In most cases, the business owner is only required to provide basic documentation, including business paperwork and passport copies. The application process can take one or two weeks.
How to choose a free zone in Dubai
With so many free zones in Dubai, how can you choose the right one for your business? Well, here is a step-by-step guide to choosing a free zone.
- Determine the business activity of your business
- Choose the facility type your business will require
- Determine how many Dubai Residence Visa your company will need
- Decide the location
- Check the licensing requirements
The free zone is one of the best things that have ever happened to foreign business owners in Dubai or people who are considering doing business in Dubai. However, before you choose a free zone, you need to do extensive research to know the amount of capital to be invested, the licensing requirements, and the application requirements.