Dubai is the city of dreams. Over the past two decades or so, Dubai’s taken center stage in the world’s economy, attracting ambitious entrepreneurs from across the globe.
From a humble desert city into an energetic metropolitan hub, Dubai’s the abode for some of the highest number of expats in the world. This isn’t surprising as the city offers a superior quality of life, unsurpassed infrastructure, and plenty of cultural activities. The result is thousands of individuals asking about the steps for a free zone company setup in Dubai.
-Dubai and the UAE have top-notch infrastructure that facilitates business growth, enhances your quality of life, makes commuting easy and offers accommodation of all types. In fact, according to the BCG Decoding Global Talent series, Dubai ranked sixth across the world for digital talent, and as the fourth-best relocation spot as per The Relocation Report by Money.co.uk.
-According to the Gallup Global Law and Order 2021 report, the UAE is the second safest city in the world, making business safe and easier to do.
-No matter what type of business entity you have in Dubai, you are exempted from taxes.
-The geographical position of the UAE and its bustling ports makes it closely connected to key trade cities including London, Hamburg, Hong Kong, as well as the other GCC countries.
-In a Doing Business 2018 report by the World Bank, the UAE was 21st in the world for ease of doing business and Dubai has a large role to play.
-Dubai’s progressive and broad outlook in terms of recreation, education, and growth are important factors.
-The leaders of the UAE and Dubai have set out to look towards the future and constantly innovate. From being solely reliant on oil, Dubai has developed its non-oil segments to perfection.
-Dubai’s effective action during the COVID-19 pandemic has kept the city’s economy in a state of continuous action. This shows how equipped the city is to deal with change.
An Onshore Entity is created for business on the mainland, or in other terms, outside the free zone. This includes a Partnership, Limited Liability, Limited Partnership, Private Joint Stock, or Public Joint Stock.
Meanwhile, a free zone entity is created within the allotted area and holds several advantages, one of which is the ease and simplicity of setup.
Let’s look at how the two differ from one another.
With a company set up in Dubai free zone, entrepreneurs are fully exempt from Corporate Tax for up to 50 years from the date of inception, based on renewal terms. Onshore entities do not get tax exemption, but the tax rate at large is 0%.
In a free zone, companies can conduct 100% repatriation of profits, whereas some sectors are excluded from an onshore entity.
With a Dubai free zone license, you are exempt from all export or import duties, compared to 5% on most products onshore.
Companies with a free zone license can trade internationally, as well as, within the free zone freely. Within the UAE, they must do this through a distributor. Those with an onshore license can trade throughout the UAE and internationally.
Once you’re done with your new business setup in Dubai free zone, you won’t have any limitations when hiring foreign employees. However, for an onshore entity, it would depend on your company’s size and what sector it is in.
Setting up a Dubai-free zone company instantly makes you qualified for a Visa. However, with an onshore entity, you need to have a local sponsor who can apply for your visa on your behalf and renew it regularly.
For a Dubai free zone, all the requirements depend on the free zone you’re in, whereas, for an onshore, it’s based on the location where you’re operating.
Related Article: How to Setup Business in Dubai
Once you’ve made up your mind about starting a business in Dubai free zone, you simply have to follow a list of steps. Each free zone might have different requirements, but the overarching process remains similar. Costs might differ depending on the type of free zone as well. So whether you’re on the lookout for Dubai free zone company setup cost or other forms of advice, this guide has all you need.
An important step to take before the company’s formation is to decipher the legal type of the company. It could be two types:
-Freezone company or establishment
-Limited Liability Company (LLC)
Zones that have the availability of LLC are limited. We suggest looking into the two types, and never shy away from asking your Dubai free zone point of contact for more details.
Once you have the legal type of company figured out, it’s now time to register your company’s name. In free zone terms, this is known as trade name registration. Before obtaining a Dubai free zone license, the respective authority needs to have approved the name that you proposed.
Here are some guidelines when choosing a name for your company:
-Make sure that it isn’t in any way connected to religion.
-It shouldn’t be affiliated with the nation or a government agency.
-Always abide by moral standards at all times.
-Try to think of a name that’s easy to pronounce.
-Do some market research on your competitors and come up with a unique naming option.
The next step of the Dubai free zone company formation involves applying for your license. This step needs to be taken after your company name has been approved. The business license application requirements could differ per free zone.
In general, it might be as follows:
-The primary company shareholder would need to submit a passport copy with a validity of over six months.
-A certain set of Dubai-free zones require plans for your business and permissions from third parties.
-Once everything is cleared, you’ll get an application form which you, as the primary shareholder, would need to fill and sign.
-Certain free zones in Dubai do allow remote setup, however, for the most part, it’s important that you be physically present to initiate the company.
-On average, a Dubai free zone company formation would then take 10 days for application approval. After this, you will receive a license, share certificate, and MOA through the government.
-Once you’ve set this up, you can request your free zone for a company establishment card, and further, make an e-channel registration. However, this form of registration isn’t required by most free zones.
-Upon completing all the above steps, you can apply for your Visa and set up your corporate bank accounts inside UAE or even internationally.
Dubai is home to more than 30 free zones. If you find yourself asking which is the cheapest free zone in Dubai for setting up a business, the answer truly varies. Each free zone has a set of rules, regulations, and costs. Before selecting your free zone, it’s important to research the types of companies already registered, perks for your type of business, and the documents you will need for setup. These are some of the main free zones in Dubai.
As a part of the TECOM Group, the Dubai Design District was built for creativity to flow. Offering several advantages for designers, companies ranging from fashion houses to agencies are registered here. It’s also the prime venue for art and culture festivals within the city.
One of the most revered free zones in Dubai, it’s home to thousands of registered companies and staff. The process of applying is fairly simple and you will also get the help you require at every turn.
If you’re looking to set up a medical or healthcare institution in Dubai, Dubai Healthcare City is the perfect free zone. Types of companies registered under this free zone include healthcare, medical equipment, wellness, pharmacies, medical product distribution, alternative healthcare such as Ayurveda, and medical education.
The starting point of some of the region’s largest media houses, Dubai Internet City’s reach spans thousands of companies and employees. Technology companies registered with this free zone are offered taxation, equity, and ownership perks. Companies also get a fair amount of autonomy and are in one of the most vibrant hubs of the city, next to the Dubai Marina.
Some of the biggest financial institutions in the world have found a place in Dubai International Financial Centre. Centrally located, very close to the Dubai World Trade Centre and Dubai’s iconic Sheikh Zayed Road, nearly 3000 companies have registered with this free zone.
You May Also Like To Read: Our 101 Guide for Starting Business in UAE
According to the Dubai Chamber of Commerce, the UAE’s expected GDP growth rate in 2022 is 3.4%. Moreover, Dubai’s economy will maintain steady growth owing to its non-oil-supported sectors such as retail and tourism. Sectors that will have a larger role to play include telecommunication, transport, trade, business services, and real estate. This makes now a better time than ever to set up a business in a Dubai-free zone.