FREEZONE LICENSE
A Free Zone is a designated jurisdiction in the UAE for specific trading activities. Setting up a Dubai Free Zone business requires an activity-specific license. These licenses are issued by the Free Zone Authority (FZA) and tailored to the company's business activity. New Free Zone regions are being developed, increasing their numbers.
Operating under Free Zone regulations, mainland UAE laws don't apply to Free Zone companies. Notably, foreign investors can wholly own their businesses in Dubai Free Zones, benefiting from tax exemptions, complete profit repatriation, and no foreign exchange constraints.
Upon approval, businesses receive Dubai Free Zone licenses like Trade, Industrial, Service, or National Industrial licenses. Renewals are possible yearly with active lease agreements. Choosing the appropriate Free Zone aligns with your business activity. Offshore companies share some benefits with Free Zone entities but have distinctions.
The investors and entrepreneurs can rely on 3 different business entities to form a company in any of the Dubai Free zone jurisdiction. And those entities are:
Free Zone Company (FZC) – A Free Zone company is a business entity that has 2 or more shareholders.
Free Zone Establishment (FZE) – A Free Zone Establishment is a business entity that has a single shareholder.
Branch Office – the investors can also form a business entity that serves as a branch office of a parent-concern. The parent-concern can be in the UAE or an overseas company.
Select the business entity of your preference – Understand the business category of the Free Zone jurisdiction and choose your desired business or legal entity.
Select an appropriate and relevant trade name – Select an appropriate trade name for your business concern. Contact the Free Zone Authority of the concerned Free Zone jurisdiction and verify the trade name. You are not allowed to select an already listed trade name. Register the trade name via the concerned Free Zone Authority.
License application – Based on your business activity, determine the category of license that your business needs. The documentation required for license application varies with the type of license. For example, documentation required for acquiring a Professional License is different from that of an Industrial License. Apply for the relevant license.
Get sufficient office space – the number of staff and the category of business determines the area of the office space. There are multiple options like flex spaces, office space for lease, etc. for startup investors.
Initial Approval – Now you are in a position to apply for the Initial Approval. Get the approvals from all the concerned departments and agencies.
Registration – After you get all relevant approvals, you may undertake the registration of your business on the official website of the concerned Free Zone Authority.
Acquire the business license – you may get the business license within a couple of weeks, or a month provided the official formalities are accomplished on time.
Free zone companies are ideal for foreign investors who seek 100% foreign ownership.
Free zone regions have tax exemption benefits. They are devoid of Corporate tax, Income tax and personal tax.
Free zone jurisdictions do not have foreign exchange restrictions.
Hassle-free employee recruitment formalities
Investors can enjoy complete repatriation benefits in terms of profit and capital.
Free zone entities are devoid of export and import charges.
Enjoy logistic advantage
Ideal for start-up ventures, small and medium business establishments. Free zones regions are equipped with full-fledged offices and work-spaces.
Well-equipped and ample communication facilities
There are around 40 Free zone jurisdictions that are currently operating in the UAE. Around 28 Free zones operate in the Emirate of Dubai alone. And yes, Dubai is the most preferred Emirate for Free Zone company formation in the UAE. The major Free zone jurisdictions are listed below.
Dubai South Free zone – the Dubai South Free zone is located close to the Al Maktoum Airport and Jebel Ali port and hence it has both strategic and logistic importance. The Dubai South is the proposed venue for the international event – Dubai World Expo 2020. The Free zone serves as an aviation, SME and logistics hub.
Jebel Ali Free Zone (JAFZA) – JAFZA offers licenses for a variety of business activities like general trading, trading of machinery, equipment, electrical and electronic items, construction and building materials, jewelry, logistics, aviation, manufacturing etc.
Dubai Silicon Oasis – DSO, the internationally known Free zone serves as a technology hub that caters to the requirements of telecom and the IT sector.
Dubai Healthcare City – caters to the entire needs of the Healthcare sector like medical research facilities, clinical and non-clinical services, medical equipment etc.
Business establishments irrespective of their legal structure and size requires a valid trade license to conduct their operations in any of the UAE Free Zones. The Dubai Freezone Licenses issued include:
Professional License – For service-oriented firms and consultancies. Industrial license – For manufacturing firms, import and export companies General Trading License – the investor can make use of the General Trading license to trade a wide category of goods and commodities. Warehousing license – the investor may acquire this license to meet the various warehousing requirements like storage and distribution.
Free zone companies are allowed to conduct business transactions within the limits of Free zone and abroad. There are certain restrictions to conduct business transactions in the Dubai mainland. Free zone companies that hold a commercial license should seek the service of a distributor to conduct mainland or local operations.
Frank & Frank can guide you throughout the entire Dubai Freezone Company Formation procedures. Frank & Frank is a registered business consultant based in Dubai serving clients for more than a decade. Feel free to contact Frank & Frank team of consultants for additional support.
The total cost involved in Dubai Freezone company formation will include license fee, registration fee, visa charges and other similar fees promulgated by the authority from time to time. The charges for business setup in Dubai free zone that we mention here are for reference purposes only. You may contact us to know about the latest Dubai freezone license cost.
Each Free Zone has its policies and regulations. The validity of the business license and the stipulations will depend on the Free Zone. Normally, a Freezone license in Dubai is valid for 03 years.
The type of license you seek has a direct implication on the total cost. It will differ according to the type, viz. General Trading, Commercial, Industrial, Service and so on. Generally, the freezone license Dubai can cost around AED 10K to 50K.
You can opt to establish a Free Zone Company (FZC), Free Zone Establishment (FZE), Branch of a Foreign Company, or Branch of a UAE Company at the Free Zone of your choice. Consequently, the registration formalities and various charges will change. Freezone Company registration will cost you around AED 15K to 50K.
You can choose from a variety of office spaces available, viz. fully furnished office, Flexi-desk, serviced office space and so on. It is ideal to select the official and commercial according to the type of business activity and the type of business setup in Dubai free zone you are planning, size of the business entity, period of business and similar aspects. It may cost you around AED 20K. Talk to us for renting or leasing a cost-effective and budget-friendly office space.
The number of visas authorized for each firm is directly proportional to the size of the firm. The authorities may charge you approximately AED 5K for a visa per person. However, the visa processing for a Free Zone company in Dubai is quicker than a Mainland Company.
The Free Zones available in the UAE are appended below. You can decide the Free Zone that will be productive for your business and company formation in Dubai freezone.
Dubai World Trade Centre (DWTC) – This is one of the most regulated business regimes, which will support the growth of your business.
Dubai World Central (DWC) – The second largest Free Zone in Dubai, DWC offers ample opportunities for trading, manufacturing and warehousing business operations.
Dubai Creative Clusters Authority (DCCA) – Aiming to provide exclusive support to media and entertainment, this Free Zone was established in the year 2000. It is a cluster of 09 segments serving creative and intellectual industries.
Dubai Multi Commodities Centre (DMCC) – Recognizing the credibility and conducive aspects, there are more than 11200 companies operating in this Free Zone jurisdiction. Firms in the trading and service sector choose this domain.
Dubai International Financial Centre (DIFC) – Strategic placement of this Free Zone makes it more favourable for business growth. This zone was established in 2002 and it’s considered as one of the most reliable business jurisdictions.
Dubai Airport Free Zone Authority (DAFZA) – One of the most advanced business jurisdictions, DAFZA, established in 1996, has been pivotal in the growth of many entities carrying out business in the import and export sector.
Dubai Silicon Oasis (DSO) – DSO has infrastructure facilities for technology-based institutions and business firms. This completely planned Free Zone is the best for technical establishments.
