Many of us have dreamed of setting up a business in Dubai. But how exactly can we start a business? One of the most cost-efficient and effective ways of establishing a business in Dubai is by doing it in a free zone. Setting up a business in a Dubai Freezone comes with many benefits, both financial and social. These benefits include:
- Complete foreign ownership
- Absence of currency regulations
- Import and Export duty exemption
- Tax Benefits – 100% tax exclusion for Freezone companies.
- Repatriation benefits
- Smooth labor recruitment
- Readily available workspaces
- Ease of company incorporation
- Trouble-free immigration procedures
- Excellent communication and infrastructure
In this article, we will be discussing the methods of Freezone company setup and what are the requirements and regulations in order to establish a business in Dubai Freezone areas. There are 5 key steps to set up a business in a free zone.
- Determine the type of legal entity
- Choose a trading name
- Apply for a business licence
- Choose an office space
- Get pre-approvals, register your business and get your license
Different Freezones around Dubai have different capital requirements. In Dubai Airport Freezone, you can form an FZ Co. with a minimum share capital of AED1000, while in DMCC the minimum share capital for a Freezone company establishment is AED 50,000.
In order to set up a business in a Dubai Freezone, the following documents will be required:
- A corporate account opening form
- A board of directors’ resolution sanctioning the opening of the account, and the signatories to the account.
- A copy of your company’s certificate of incorporation
- A copy of your share certificates
- A copy of the company’s memorandum and articles of association
- Copies of passports for all partners in the company
Choosing a Trade name
- When choosing a trade name for your new Freezone company, you should check either with the free zone authority or the Department of Economic Development (DED) about the permitted trade names and whether the intended name has already been registered.
- For the DED to approve the proposed trade name, the name :
- Must not violate public morals of the country
- Must be followed by the legal form of the company
- Has not been previously registered
- Is compatible with the required type of activity and legal status
- Should not contain names of any religion, or governing authority.
Applying for a Business License
The type of business license you apply for depends on the primary activity of your business . Different Freezones allow different types of business activities to be conducted.DMCC and DIFC both allow financial and non-financial businesses to be conducted. So this is important to keep in mind when choosing which freezone you want to establish your company in.
Choosing an Office Space
You have the option to either buy or lease office spaces in free zones. Office area requirements depend on the number of employees and the type of business activity your company will be conducting. In DMCC, you can choose from a flexible desk of 20-30 sq.m a Flexible office of 200-265 sq. m., or offices spanning across multiple floors totalling up to approximately 2,000 sq. m. each. In Dubai Airport Free Zone, you can choose between numerous packages including ‘Office Packages’, ‘Smart Desk Office Packages’ and ‘Executive Office Packages.
Get Pre-Approvals
Companies established in free zones are governed by the rules of the respective free zones. TO get the necessary approvals you need to apply with certain documents. The type of business activity, type of company and the requirements of free zone authority affect the types of documents required that needs to be provided.
Documents needed for initial approval can be shown below:
- “Completed application form
- Business plan
- Copy of existing trade licence/registration certificate (if you are an existing company, applicable for a local company only)
- Coloured passport copies of the company’s shareholder/s and the appointed Manager/Director for the new company
- Specimen signature of the company’s shareholder/s and the appointed Manager/Director for the new company
- 2 years’ audited financial reports for a corporate entity or certificate of reference from a personal bank of the individual shareholder
- NOC from current sponsor (for individuals)
- Unit title deed
- Letter of Intent
- Registry Identification Code Form (RIC) for Manager/Director (Original and notarized)”
Freelancers need to submit fewer documents. In most cases, they need to submit:
- Application for registration
- CV
- Bank reference letter
- Registry Identification Code Form (RIC) (Original and notarized)
- Registration
After getting initial approval, you need to pay registration fees and licence fees. The fees depend on the type of licence required. Then, you need to submit:
- Completed application for registration
- Board Resolution appointing Manager/Director (Notarised and attested)
- Power of Attorney given to Manager/Director (Notarised and attested)
- Memorandum and Articles of Association (Notarised and attested)
- Specimen signature of Manager/Director (Notarised and attested)
- Passport-size photo of Manager/Director against a white background
- Share capital information,
- Licensing and visa process
- Lease agreements will be prepared by the authority
- Then trade licence will be issued
- Visa processing will start
After initially setting up your Freezone business, you are obliged to comply with laws that govern your business as well as protect labour rights, health and the environment. Your business will be governed by the free zone authority in which your business is set up and in some cases might be additionally governed by another government entity. Specific laws relating to the type of business activity you conduct will also govern your business.
The laws mentioned below govern free zones in Dubai:
- “Laws relating to free zones under Dubai Development Authority
- Laws relating to Dubai International Financial Centre
- Laws relating to DMCC
- Jafza Offshore Companies Regulations 2018 (PDF, 650KB)
- JAFZA Implementing Regulations 2016 (PDF, 45KB)
- Law No. 25 of 2009 Concerning the Dubai International Airport Free Zone (PDF, 75KB)
- Law No. 15 of 2006 on the regulations of free zones and special development zones”
After all the steps mentioned above have been completed, then you have officially established and are now running your own Freezone business, however, sometimes this can take a lot of time and effort for an individual to do by themselves. There is a wide range of free zone company formation services available which can help you set up your business in Dubai Freezones. Abdulshafe and Co. specialize in and helps with Freezone company formation setup and services. With our help, you will be able to set up the business you have always dreamed of starting with ease and help ensure that the entire business setup process goes smoothly.
