Setting up as a freezone company in Dubai is an economical choice for business owners. Freezone company costs are typically lower than local company costs. Business owners choose to open freezone companies instead of local companies mainly because they prefer to operate with 100% ownership. This is dissimilar to local companies, which only allow up to 49% ownership by foreign nationals, and a minimum of 51% ownership by a GCC national. Freezones offer many benefits. They are designed to encourage foreign investment with easier start-up processes, labour and immigration procedures and other legal services. Each free zone has its own authority and its own rules, which are applicable to business owners looking to set up companies in those zones. Each freezone has its own regulations so it’s best to speak with a business consultant for assistance in deciding which freezone is best for your business needs. The following advantages apply to all freezones:
- 100% ownership
- Tax exemption
- Owning properties is allowed
- Economical renewal fees
- Confidentiality of your business is maintained
- Allowed to open bank account in Dubai
- No restriction for conducting more than one business activity
- Can close the business at anytime
- May repatriate 100% of all earnings from the company
- Faster incorporation procedures than local companies
A Dubai freezone company is one which is registered within one of the many free-trade zones within Dubai. Here is a list of the most common freezones in Dubai:
- Dubai Airport Free Zone
- Dubai Auto Zone
- Dubai Cars and Automotive Zone
- Dubai Design District
- Dubai Flower Centre
- Dubai Gold and Diamond Park
- Dubai Healthcare City
- Dubai Industrial City
- Dubai International Academic City
- Dubai International Financial Centre
- Dubai Internet City
- Dubai Knowledge Park
- Dubai Logistics City
- Dubai Maritime City Authority
- Dubai Media City
- Dubai Multi Commodities Centre
- Dubai Outsource Zone
- Dubai Science Park
- Dubai Silicon Oasis
- Dubai Studio City
- Dubai National Industries Complex
- Dubai Textile City
- Energy and Environment Park
- International Humanitarian City
- Jebel Ali Free Zone Authority
- Jumeirah Lakes Towers Free Zone
- Dubai Production City
The following basic requirements apply to all freezones (some freezones have other requirements and it is advised that you speak with your adviser about the details of your specific freezone).
- A freezone company must have a trade license in the activity of its intended business.
- The license bust be renewed every year.
- A Dubai freezone company must have an office in its own name, in the same freezone as the trade license.
- Rent must be renewed every year for up to 25 years.
- The company must have a Manager who is authorized to act as a legal representative of the company.
- It must have at least one shareholder.
- Where applicable, there is a minimum share capital requirement.
- A freezone company must not trade outside its freezone, without a local distributor.
Procedures and Costs of Opening a Freezone Company
The following procedure is a generalisation of a typical freezone in Dubai. The time taken to complete this procedure is about 4 weeks from the date of application. Please check with your advisor for the specific steps required for your freezone.
1. Decide on the shareholder. Is it an individual or a company? Generally, a company with more than one shareholder is considered a FZ-LLC, else it’s a FZE (Freezone Establishment).
2. Decide on the minimum share capital required by your freezone. The capital must be in the account at the time of registering the company and may be removed immediately after the process is complete.
3. Establish the name of the company and appoint a manager. The Manager’s name appears on the trade license.
4. If the owner of the new company is your home company, a certificate of incorporation and memorandum of association is required and must be attested by the UAE embassy.
5. Submit the application with all of the above documents and details, passport copies of all shareholders and the manager.
6. A preliminary approval is granted and a letter to open a bank account is issued for the investor to deposit the capital. This capital must be retained until the License is issued.
7. After depositing the capital in your bank account the bank will issue a letter. The letter is to be submitted to the freezone authorities to complete the legal process of registration.
8. Pay licensing and registration fees, sign lease, sign the Memorandum of Association for the new company and a resolution of the Subscribers.
9. Once the above steps are completed the license is issued and you are ready to start operations.
Dubai Freezone Company Costs
The costs for setting up a freezone company in Dubai will vary from one freezone, to another.
It normally comprises of the following:
- One time registration fee
- Company name approval fee
- Annual trade license fee
- Annual office rental charges
- P.O. box rental
- Labor registration charges
- Notarization fees
- Registration agent fees
- Residency visa fees
Your business consultant will be able to give you an exact cost for setting up in any freezone. You are invited to contact us anytime, or fill in the form on this page to receive a free consultation call.
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