In recent years the United Arab Emirates has emerged as a new investment haven. As a result of forward-thinking governments’ economic changes, businesses from all over the world are growing more interested in creating a regional presence. A freezone business setup is one such way to attract investors, and business owners to expand their business in Dubai.
Freezone business setup in Dubai has become increasingly popular among investors since it allows easy access to a variety of resources, 100% foreign ownership, as well as tax advantages and other perks for launching a business in a free zone Dubai, making them a popular choice among investors.
Here are some steps to follow for the Free zone business set up in Dubai:
Choose your industry and jurisdiction
You should perform a thorough investigation into the viability and profitability of your company’s operation in the UAE market before commencing your freezone business setup in UAE. Once you’ve decided on your company activity, you should choose a jurisdiction depending on your business demands or requirements. Mainland, Free Zone, and Overseas are the three main economic zones that make up the UAE.
Each jurisdiction has its own set of laws and regulations governing business.
Establish the company’s structure.
You must first decide on the firm structure or legal form before applying for a business setup license in the UAE. It has a significant impact on legal and operational risk, asset protection, tax obligations, legal fees, and clients for your organization choosing the right company structure is crucial. In the UAE, you can register your company utilizing a variety of legal forms or company structures.
Apply for a business license and register your company.
You can apply for a trade license and begin the process of company registration in the UAE once the Department of Economic Development (DED) accepts your business name and activity.
The three types of licenses available are as follows –
- A commercial license
- Professional license
- Industrial license
If you want to create a business in the UAE Freezone, you can choose from one of the four licenses listed above. Licensing structures in UAE Free Zones vary from those described above and are dependent on the type of company you intend to conduct.
Find a local sponsor or partner.
If a business is being established in the UAE Mainland, UAE commercial law prohibits a business owner from owning more than 49 percent of the company’s shares. As a result, you’ll need to find a local partner or sponsor who is a UAE national.
There are two types of sponsorships available: local and corporate.
Because finding a dependable local partner or sponsor might be challenging, corporate assistance may be an option. You will be given full ownership of the company as well as all essential documents.
Memorandum of Understanding (MOU) Draft (MOU)
A Memorandum of Understanding (MOU) is a nonbinding agreement that states the responsibilities of each party, specifies the scope and authority of the agreement, clarifies terminology, and addresses compliance challenges.
Based on the UAE government’s directives and economic interests, you can draft a Memorandum of Understanding (MOU) for your company.
Obtain DED permission and rent an office.
It is necessary to obtain an Initial Approval Certificate from DED. This approval certifies that your organization is legally permitted to engage in a specific business activity or sell a specific product.
Then you can choose between renting a private office or a shared workstation. This will also determine the number of visas you are eligible to apply for from DED.
Final Words
The right to 100 percent foreign ownership, 100 percent exemption from import and export tax, no corporate tax, and assistance with recruitment are just a few of the benefits available to free zone business owners. Starting a business setup in Dubai can be a thrilling experience, making it the finest city in the world for business starts.
If you’re willing to take a step forward in this business world, then there are various consultancies to assist your journey. One such is The Corporate Group, providing their corporate services and assistance in setting business, and much more. You can rely on them for a smooth and effective business journey.
Frequently Asked Questions
Is it possible for a freezone corporation to do business in Dubai?
Companies registered with free zone administration are not authorized to do business on the mainland of Dubai. The bulk of free zone trading companies are barred from doing business in Dubai’s Freezone.
How much would it cost to set up a Freezone business in the UAE?
The cost of a Dubai Free Zone Company License for a Zero Visa Quota starts at AED 11,900. Investors can also upgrade if they need extra visas, an office, or other business needs.
