Just think of a business environment where you have infrastructural facilities at par with the best in the world, full access to your profits, the freedom to own 100% of your business and incredible tax benefits. It may sound too good to be true, but this is what UAE free zones are all about. Free zone company setup in Abu Dhabi, UAE can be accomplished in as little as 48 hours, making it one of the fastest zones to establish and operate a business. Apart from the numerous benefits enumerated above, let’s look at a few of the important benefits offered by Free Zones in the UAE in comparison to a mainland setup in the kingdom.
There are over 45 free trade zones currently in the UAE with more under construction. Each free has its governing authority called the Free Zone Authority (FZA), and businesses operating in that free zone are governed by that specific Free Zone Authority (FZA), which is entrusted with the task of issuing licenses and formulating regulations for businesses operating in that free zone. The primary attraction, among other benefits, of businesses operating in a free zone, is that there is no restriction placed on foreign ownership. To put it in simple terms, businesses operating in free zones can have 100% ownership of their companies. Also, a business operating in a free zone is not subject to UAE Commercial Companies Law.
There are primarily two company types in the UAE Free Zone— Free Zone Establishment (FZE) and Free Zone Company (FZCO).( FZ- LLC). Apart from these two, there are also Branches of a Foreign Company, and a Branch of a UAE Company. Before Free Zone company formation in UAE, it is important to know in detail about all these types of companies in the UAE Free Zone.
Free Zone Establishment (FZE)
A Free Zone Establishment(FZE) is a company structure with a single shareholder, who can either be a single individual(person) or a corporate shareholder. This type of establishment is most preferred by individuals or businesses who are interested in the UAE free zone business setup with limited liability and a higher degree of operational flexibility.
Free Zone Company (FZCO)
This structure allows for multiple shareholders or a partnership Free Zone firm where the number of shareholders ranges from 2 to 50. FZCOs are often preferred by a group of shareholders or larger businesses interested in sharing ownership in the business. There is also Free Zone Limited Liability Company (FZ LLC) where ownership is divided between multiple shareholders.
Firms interested in UAE free zone business setup should be aware of the different types of trade licenses awarded in the UAE free zone. There are generally four types of UAE free zone trade licenses – General Trading License, Commercial License, Industrial License and Service License. We discuss them in detail here.
Commercial License
A commercial license is required by businesses selling their products and services within the local borders as well as in international markets. This license facilitates economic activities such as importing goods and selling them in the UAE, or exporting them outside the UAE. A commercial license is also needed for indulging in trading activities within the confines of the free zone.
Industrial License
The regulating authority of a particular free zone is responsible for issuing industrial license for businesses operating in that free zone. This license is issued for manufacturing activities within the concerned free zone. The license, generally issued to manufacturing companies is required for importing raw materials from outside the kingdom and exporting finished goods.
General Trading License
With a general trading license, a business can indulge in various business-related activities such as import and export as well as re-import of goods; sale and distribution of different goods and services, and storage of various goods. The license offers a business the flexibility to carry out trade in an extensive variety of goods, all with a single license.
Free Zone business setup in UAE is a structured process, which an entrepreneur may seek to accomplish within one to four weeks. Qualified business setup consultants in UAE free zone can guide you through this process.
To start a new business in the UAE free zone, you need to seek and acquire the right trading license from the concerned Free Zone Authority (FZA). The scope, type and size of your business activity and the Free Zone you operate in will determine the type of trade license you will need along with all other documents.
The cheapest Free Zone setup in the UAE is probably Sharjah Media City, otherwise known as SHAMS. The starting cost is probably around AED 6,000 for a business license. For more information and help, you can get in touch with a good business setup consultant in UAE Free Zone.
Yes, of course. One of the major advantages of establishing a business in a UAE Free Zone is that it allows for 100% ownership. It means you do not need a local sponsor.
Business setup in Dubai Free Zones can be accomplished within 48 hours. However, the average time for establishing a business in the UAE Free Zone is between two to four weeks depending upon the scope, nature, size and complexity of the business and the type of license required to run it.
The process is pretty straightforward. You need to gather the requisite documents, submit them on time, pay the necessary fee and then wait for approval from the concerned Free Zone Authority (FZA).