Umm Al Quwain Free Zone (UAQ)

Umm Al Quwain Free Trade Zone is located in Umm Al Quwain which is one of seven Emirates in UAE and just 45 km away from Dubai. Umm Al Quwain free zone is situated close to the UAE’s primary seaports and within one hour’s drive of Dubai International Airport and Sharjah International Airport, ensuring easy access to the rest of the world. Umm Al Quwain Free Zone companies engaged in international trade can release their goods and keep them as stocks meant for re-export without payment of customs duties. Umm Al Quwain Free Zone company can freely do business internationally.

Advantages of setting up a business in Umm Al Quwain free zone 

  • 100% tax-free operations for Umm Al Quwain free zone.
  • 100% company ownership
  • 100% repatriation of capital and profits
  • No restrictions on hiring foreign employees
  • No share Capital Requirements
  • 100% import and export tax exemption within the Free Zone
  • Full range of business activities permitted
  • Simple and fast registration process
  • Office, warehouse and land availability
  • Special concessions via Umm Al Quwain free zone seaport
  • Investor-friendly rules and regulations
  • Ideal location for SMEs and micro-businesses

Types of licenses in Umm al Quwain Free Zone:

  1. COMMERCIAL LICENSE: This authorizes the import, export, distribution and store of items specified in the license. A commercial license can have three different product lines or ten similar product lines.
  2. GENERAL TRADING LICENSE: This allows the licensee to trade in a wider range of activities and gives the freedom to trade in any commodity permitted in UAE. This is popular among international traders because almost all categories of products can be traded) Tobacco, Alcohol, Pharmaceuticals and Crude oil are not allowed).
  3. CONSULTANCY LICENSE: This license is for entities which offer expert or professional advice and is issued to all manner of professionals including artisans and craftsmen.
  4. PREMIUM CONSULTANCY: This license allows Real Estate consultancy, Tourism Consultancy, Oil and Gas engineering Consultancy, Legal consultancy, Financial Consultancy, Investment Consultancy, Shipping and Logistics and Aviation Consultancy.
  5. FREELANCE PERMIT: This allows an individual to operate as a freelance professional, and conduct business in one’s birth name as opposed to a brand name or company. The Freelance Permit is designed for individuals who operate in technology, media and film sectors, and is issued to talent roles, creative roles and selected administrative roles
  6. SERVICE LICENSE: This license type permits the licensee to carry out the services specified in the license within the free zone such as logistics courier services travel agency car rental etc.

Legal entities under UAQ FTZ:

  • Free Zone establishment (FZE) – a single shareholder.
  • Free Zone Company (FZC) – two to 50 shareholders.
  • A branch of an existing company.

Value Added Tax (VAT):

Value Added Tax (VAT) has been introduced across the UAE on 1 January 2018 at a standard rate of 5%.

Who should register for VAT?

A business whether situated in designated zone or non-designated zone or outside free zone should register for VAT if the taxable supplies and imports exceed the mandatory registration threshold of AED 375,000 within preceding 12 months or it is anticipated  that the total value of taxable supplies exceed AED 375,000 in the next thirty 30 days. Upon registration, a tax registration number (TRN) would be issued to business by the Federal Tax Authority.

What is a designated zone?

A Designated zone is a specified fenced geographical area having security measures and customs controls in place to monitor entry and exit of individuals and the movement of goods to and from the area. Following free zones are declared as designated zones.

a. Free Trade Zone of Khalifa Port
b. Abu Dhabi Airport Free Zone
c. Khalifa Industrial Zone
d. Jebel Ali Free Zone (North-South)
e. Dubai Cars and Automative Zone (DUCAMZ)
f. Dubai Textile City
g. Free Zone Area in Al Quoz
h. Free Zone Area in Al Qusais
i. Dubai Aviation City
j. Dubai Airport Free Zone
k. Hamriyah Free Zone
l. Sharjah Airport International Free Zone
m. Ajman Free Zone
n. Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port
o. Umm Al Quwain Free Trade Zone on Sheikh Mohammed Bin Zayed Road
p. RAK Free Trade Zone
q. RAK Maritime City Free Zone
r. RAK Airport Free Zone
s. Fujairah Free Zone
t. FOIZ (Fujairah Oil Industry Zone)

What is a non-designated zone?

Any free zone which is not declared as designated zone is a non-designated zone. In other words a non – designated zone is any geographical area within UAE which does not have any security measures and custom controls in place to monitor entry and exit of goods and individuals. Eg. DMCC, Dubai Media city, DIFC and Dubai Internet city.

What transactions are subject to VAT within Designated zones?

a) Goods transferred between designated zones shall not be subject to VAT. However goods supplied by an entity in the designated zone to entities outside the designated zone are subject to 5% VAT.
b) Services provided by an entity to other entities inside the designated zone or outside the designated
zone are subject to 5% VAT.
c) Professional fees for services are subject to VAT @ 5%.

What government/free zone fees (License/Visa/rent) are subject to VAT?

In case of designated zones the trade license fees, visa fees, lease rentals will not be subject to VAT. And in case of non-designated zones the trade license fees and visa fees are not subject to vat however rent is subject to 5% VAT.

If you need additional assistance or have any questions, please contact the following:
Tel: +971 4 343 8022