The United Arab Emirates (UAE) and especially Dubai has become a world leader in business and entrepreneurship. The city's strategic location, business-friendly policies, and robust infrastructure have prompted lots of businesses to drift toward its shores. There are lots of options for setting up a business in Dubai, but Freezone companies have become very popular for their benefits. In this article, we want to provide you with a free online guide on all the aspects of Free Zone business setup in Dubai – cost, benefits, and setup process.
Benefits of starting a business in Dubai Freezone
Dubai Freezone regulations offer various business opportunities in Dubai Freezone some of which include:
- 100% Foreign Ownership: Maintaining 100% foreign ownership is one of the main reasons why it is lucrative to form a Freezone company in Dubai. This feature fits nicely for foreign investors who would like to have total control over the business without having to use local sponsor sup-parting.
- Dubai Freezone tax benefits: Dubai-based freezone companies are exempted from corporate and personal income taxes. In addition, Freezone businesses enjoy tax exemption on export and import duties making them perfect for trading businesses.
- Easy Business Setup and Licensing: It is very easy to setup your business in a Dubai Free zone as it comes with streamlined procedure and minimal red tape. Additionally, a business license in Freezone is generally quicker and less expensive than the one in a mainland company.
- Accessibility to Modern Facility and Infrastructure: Dubai Freezones provides world-class facilities and infrastructure, which are excellent modern office spaces, modern warehouses, and logistics centers. These amenities can greatly benefit a business by helping to increase its success and growth.
- Strategic Location: Easy access to global markets is due to Dubai's location at the crossroads of Asia, Europe, and Africa. Having these advantages, as well as the city's fabulous transport links, makes Dubai an ideal base for international business operations.
Read More : CT registration and filing needed for UAE Free Zone businesses
How to start a business in Dubai Freezone in 2024?
Setting up a Freezone business in Dubai can be done in the following steps:
- Choose the Right Freezone: Dubai has 26 Freezones driven by different industries and business activities. The Dubai Multi Commodities Centre (DMCC), Jebel Ali Free Zone (JAFZA) and Dubai Internet City (DIC) are among the most popular Freezones. You must choose a Freezone which is in correlation with your business activities and needs.
- Select a Business Activity: The next step once you have chosen a Freezone is to work out what business activity or activities you want to undertake. At Freezone, each Freezone has its list of approved activities so you must check on the business activity that you observe is approved in the selected Freezone.
- Choose a Company Structure: The main difference between Freezone companies is that they may be set up either as a Freezone Establishment (FZE) or a Freezone Company (FZC), the main difference being the number of shareholders allowed. An FZE has only one shareholder and FZC at least two shareholders.
- Register Your Company Name: In the business setup process, choosing a company name is really important. The names of companies placed in the Dubai Freezone must follow specific rules such as inappropriate or religious terms not to include the names of companies that are well-known or permissible names.
- Apply for a Freezone business license UAE: If you know which business activity you wish to carry out and have selected a company name, you can move on to applying for a business license. The license required will depend on what type of business activity you engage in and may include a commercial, professional, or industrial license.
- Finding Office Space or Facility on Lease: In most of the Dubai Freezones, a business is obligated to lease office space of a facility inside the Freezone. It will be determined by how large the space needs to be, how many people will be working in that space, and what type of business it is.
- Obtain a Freezone Visa Dubai: To set up a Freezone business in Dubai, entrepreneurs will require a UAE residence visa. It is a multi-step process that goes hand in hand with medical testing, Emirates ID registration, and Visa stamping.
- Open a Corporate Bank Account: After your business is licensed and your residence visa is gained, you can then open a corporate bank account in the UAE. This is an important step for managing your business’s finances and doing transactions.
Read More : UAE Free zone vs mainland
What are the costs involved in setting up a business in a Dubai Freezone?
The costs of setting up your business in a Dubai Freezone will depend on several factors such as the Freezone of your choice, business activity, and company structure. The costs can generally be divided into the following:
- License Fees: The cost of a Business License in a Dubai free zone ranges between AED 15,000 to AED 50,000 a year depending on the Free zone and type of License you need.
- Registration Fees: When you set up your business in a Dubai Freezone you will have to pay a one time registration fee. They can charge from AED 10,000 to AED 25,000.
- Office Space or Facility Rent: The cost of leasing office space or a facility in a Dubai freezone will depend on the type of space required and particularly the location. Flexi-desk costs can range from AED 20,000 per year while offices and warehouses can go for over AED 100,000.
- Visa Fees: When an entrepreneur sets up a Freezone business in Dubai, he should budget for the costs of applying for visas, medical testing, and Emirates ID registration. Depending on the visa, the cost will vary between AED 3,000 to AED 5,000 per visa.
- Additional Expenses: When considering opening a Freezone business in Dubai, there additional expenses you need to account as well, such as insurance, utility costs, and professional fees related to the legal or accounting services.
Table 1: Comparison of Popular Dubai Freezones
| Freezone | Location | Key Industries | Facilities | Minimum Share Capital |
|---|---|---|---|---|
| DMCC | Jumeirah Lakes Towers | Commodities, finance, and technology | Offices, retail, and residential | AED 50,000 |
| JAFZA | Jebel Ali | Logistics, manufacturing, and trading | Offices, warehouses, and land | AED 1 million for a branch; AED 500,000 for a new company |
| DIC | Dubai Internet City | Technology, media, and telecommunications | Offices and flexi-desks | AED 50,000 |
| DSO | Dubai Silicon Oasis | Technology, research, and development | Offices, warehouses, and land | AED 100,000 |
| DIFC | Downtown Dubai | Finance, banking, and professional services | Offices and retail | AED 50,000 |
| DWC | Dubai World Central | Aviation, logistics, and light manufacturing | Offices, warehouses, and land | AED 1 million for a branch; AED 500,000 for a new company |
FAQs (Free Zone Business Setup)
What are the benefits of setting up a business in Dubai Freezone?
Setting up a business in a Dubai Freezone offers 100% foreign ownership, tax incentives, easy business setup and licensing, modern facilities and infrastructure, and a strategic location.
What are the costs associated with starting a business in a Dubai Freezone?
In Dubai Freezone, the costs include license fees, registration fees, office space rent or facility rent, visa fee and also insurance and professional fees.
What types of businesses can be set up in Dubai Freezones?
Dubai Freezones spans technology and innovation, logistics and supply chain, finance and banking, e-commerce, media, and professional services.
How long does it take to set up a business in a Dubai Freezone?
Depending on the chosen Freezone, business activity, and company structure various time durations will be generally required to set up a business in a Dubai Freezone. On average, the procedure should take from a few days to several weeks.
Can I own 100% of my business in a Dubai Freezone?
Indeed, one of the greatest perks of establishing a business in a Dubai Free Zone is the advantage to keep your 100% foreign ownership.
What are the visa options for entrepreneurs setting up a Freezone business in Dubai?
Freezone entrepreneurs in the UAE can apply for different ways of residency visas in Dubai, like Investor Visa, Green Visa, and Golden Visa, based on their investment and business requirements. Freelance visas are also available for self-employed individuals.
Are there any tax incentives for Freezone companies in Dubai?
Freezone companies in Dubai get a vast range of Tax benefits including exemption from Corporate and personal income taxes, import and export duties, etc.
Conclusion:
In conclusion, with its 100% foreign ownership, access to world-class facilities, and tax incentives, the Freezone business setup in Dubai is an attractive option. But the process can be complicated and it’s worth evaluating all of the factors carefully before you go ahead. For the setup of your Freezone Business, our firm Corporate Tax UAE, can give you expert guidance and assistance throughout the process to help for a smooth and seamless setup of your Freezone Business.
Abrar Ahmad holds a Master’s as well as an MPhil in Finance and has an extensive experience of 10+ years in managing all aspects of Taxation, VAT Consulting and Accounting. He also carries with him a working knowledge of corporate tax and has helped drive value and growth to the businesses of numerous clients.
