Why Should Foreign Investors Opt For Company Formation in UAE Free Zones?
The UAE government has set up free zones to attract foreign investments in large numbers and also diversify its economy from oil to trade, tourism and services. The free zones in the UAE maintain a reputation among the investors across the world and help in bolstering the economy of the country by encouraging more commercial business ventures, boosting foreign direct investment (FDI), enhancing the spirit of entrepreneurship, and generating more employment opportunities. The free zones like JAFZA, Ajman Free Zone, SHAMS in Sharjah, RAKEZ, KIZAD, Umm Al Quwain Free Zone, etc. have contributed significantly to the UAE’s economy. The following are some of the top reasons why the business setup in UAE free zones is important for foreign investors:
1. 100% Ownership, Total Control Over Business
The spirit of entrepreneurship gets uplifted only when the business owner can fully own the company he has started. The free zone company formation in UAE is a great blessing for the foreign investors as they can enjoy 100% ownership. Unlike the mainland business setup in Dubai or UAE, the investor doesn’t need to appoint a UAE national as a local sponsor who will hold at least 51 % shares in the company.
2. Total Repatriation of Profits Plus Tax Benefits
Registering a company in any of the free zones in the UAE provides foreign investors with the benefit of 100% repatriation of profits. The opportunity to take home the total earnings is highly beneficial especially for the branch company formation in the UAE. Except for the businesses in the Oil and Banking industries, the free zone companies are not required to pay any corporate taxes. However, the companies are required to register for Value Added Tax (VAT) if their total value of taxable supplies exceeds AED 375,000.
3. Easy Procedure of Company Formation in UAE Free Zones
The free zones are governed by a separate regulatory authority and this offers great flexibility for the investors during the process of business setup in UAE. The approvals in free zones take less time in comparison with the mainland company formation in Dubai or any other emirates. The investors need to ensure that all the documents are readily available with them and the documentation process could be finished easily if the companies hire the best business setup consultants in Dubai, UAE.
4. Modern Infrastructure
By setting up a company in the UAE free zones, the business owners can trade with the countries outside as they are not allowed to trade directly in the UAE market. The main business activities in the free zones are based on imports and re-exports and this demands the need from a highly developed infrastructure. The UAE free zones offer greater connectivity through the sea, air, and land and provide proximity to seaports, international airports, and crucial trading hubs.
Types of Company Structures Allowed to Set Up in the UAE Free Zones
Company formation in the UAE free zones come with the benefit of choosing the most efficient forms of legal structures available. Depending on the business activities and the licenses the investors hold the following types of companies can be incorporated in the UAE free zones:
1. Free Zone Company
A Free Zone Company (FZCO) typically has 2-5 shareholders
2. Free Zone Establishment
A Free Zone Establishment can be formed with a single shareholder
The UAE local companies located outside the free zone and the foreign companies can set up their branches in the free zones.
Types of Licenses Available in Various UAE Free Zones
The free zones in the UAE are known for providing investors with a variety of licenses to choose from. The licenses cover nearly all types of profitable industries in the UAE which facilitates a robust company registration in the UAE. The foreign investors who wonder about how to obtain a business license in the free zones must get professional assistance from the best business setup consultants in Dubai, UAE. The following are some of the major types of licenses in the UAE free zones. The following are some of the common licenses provided by various free zones in the UAE:
- General Trading License
- Service / Consultancy License
- Trading / Commercial License
- E-Commerce License
- Education License
- Industrial License
- Freelance Permits
- Manufacturing License
How to Set up a Company in the UAE Free Zones?
The UAE free zones follow the rules and legal procedures set out by the respective free zone authority which has to be followed to initiate the process of company incorporation in the UAE free zones. The investors who are not familiar with the legal procedures must consult with the reputed business setup consultants in the UAE to avoid unnecessary delays during company registration. The following are the steps to be followed for registering a company in the UAE free zones and it must be remembered that the requirements may vary from free zone to free zone.
1. Identify the Business Activity
The investors primarily have to determine the business activity you are planning to conduct and select the right free zone that allows the activity. Conduct thorough research on the activity and identify which free zone has the right facilities for the activity. The consultancies that provide the best business setup services in Dubai, UAE will be of great help to ward off any confusion about choosing the right free zone.
2. Determine the Legal Structure
Depending on the number of shareholders and the business activity the investors need to choose the legal structure which is most appropriate for the entity. The number of shareholders determines whether the company should be an FZCO or an FZE.
3. Choose a Trade Name
The next in the process of business setup in the UAE free zone is selecting the right trade name for the company. The investors need to follow the guidelines issued by the respective free zone authorities while choosing the company name.
4. Apply for Trade License
Depending on the activity, the entrepreneurs can choose the appropriate license for the free zone entity. The application to obtain the trade license can be submitted to the free zone authority through reputed business setup consultants in the UAE for quick completion of the company registration procedure.
5. Choose Office Space / Flexi Desk
The free zones provide co-working spaces or Flexi desks along with most of their license packages. For the companies with fewer employees, it is better to avail of the Flexi desk facility. The Flexi desk facilities are most appropriate for startups, e-commerce platforms, and freelancers. If the company has more employees, an office space with good facilities must be availed.
6. Register Company & Get License
The free zone authorities will verify the documents submitted and if all the paperwork is valid then the license will be issued. The company registration in UAE free zones can be completed in a short span of time and this is one of the reasons why most investors prefer to launch their businesses in the free zones.
Special Business Packages Investors can Avail for Business setup in the UAE Free Zones
The UAE free zones are at the forefront of offering innovative business solutions to the investors irrespective of their age group or gender. There are some free zones in the UAE that offer special company formation packages for young entrepreneurs and women. The RAKEZ free zone provides business setup packages for young entrepreneurs and women entrepreneurs at attractive rates. In fact, RAKEZ broke the ground by becoming the first free zone in the UAE to provide a special package for women entrepreneurs. Ajman Free Zone is also supporting the budding entrepreneurs by designing a special ‘Pioneer Package’ aimed at the young population.
Why Choose Jitendra Business Consultants?
The free zones in the UAE have played a critical role in attracting a large number of investors into the country with a slew of benefits including 100% ownership, highly developed infrastructure, and ultra-modern facilities. Free Zones in the UAE house more than thousands of companies that belong to different industries and play a huge role in bolstering the economy apart from creating employment opportunities. Since each free zone is governed by different regulations set out by the respective free zone authorities, the investors require professional assistance in complying with the regulations. This is where reputed business setup services in Dubai, UAE such as the Jitendra Business Consultants (JBC) comes handy for the entrepreneurs.
The investors need assistance with requirements such as company registration, license issuance, drafting of documents, visa processing and sponsoring of dependents, etc. JBC’s consultants are the best business setup consultants in Dubai and assist the investors with all these services. JBC comes to the rescue of investors who are unaware of the UAE labour laws, immigration laws, and facilitates a quick and smooth business setup process for them.