How to start a business in a Dubai free zone

Are you considering starting your own free zone company in Dubai? If that’s the case, you’ve arrived at the appropriate location. Dubai’s Free Zones offer a unique and attractive opportunity for entrepreneurs looking to establish their ventures in a business-friendly environment.

In this guide, we will walk you through the essential steps and provide valuable insights on how to navigate the process of setting free zone company in Dubai successfully. From understanding the benefits of Free Zone establishments to fulfilling legal requirements and choosing the right Free Zone for your business, we will cover everything you need to know to kick-start your entrepreneurial journey in this thriving economic hub.

So, if you’re ready to delve into the world of business setup in Dubai free zone and unlock exciting business prospects with Shuraa, let’s get started!

What is a Free Zone Company?

Free zones are often referred to as free trade zones. These are economic zones where products and services can be exchanged at preferential tax and customs rates.

One prevalent misunderstanding is that free zones and offshore corporations are the same thing. However, this is not the case. Free zone firms are onshore entities that can do business in Dubai if certain requirements are met. Offshore firms, on the other hand, are formed specifically to conduct business outside of their registration jurisdiction or the location of their principal owner.

The UAE has around 67 free zones, with new ones being added on a yearly basis. Over 150,000 enterprises in the country are also located in free zones. Furthermore, this figure is increasing with time.

AED 11,900 is the approximate cost of establishing a free zone company formation in Dubai. However, the fee will vary based on the free zone you choose and your visa requirements.

It should also be noted that free zone enterprises can now create branch offices on the mainland. To do so, the investor must register his branch with the Department of Economic Development (DED) and the Ministry of Economy under the same commercial name. Unlike the previous norm, which required a local partner, the free zone firm might own the branch business entirely.

Here are the key steps to free zone company formation in Dubai

The steps mentioned outline the process of setting up a free zone company in Dubai.  Let’s go through each step in detail:

1. Determine the Type of Legal Entity

This involves deciding on the legal structure for your company, such as a limited liability company (LLC), branch office, or subsidiary. The choice will depend on factors like ownership, liability, and operational requirements.

2. Choose a Trading Name

Select a unique and appropriate name for your company that complies with the regulations set by the free zone authority. It’s important to check for name availability and ensure it aligns with your business activities.

3. Apply for a Business License

Apply for a business license to the relevant free zone authority. The license will specify the activities your company can engage in and is essential for conducting business legally in Dubai.

4. Choose an Office Space

Depending on the free zone regulations, you will need to select an office space within the designated free zone area. Free zones typically offer various options such as flexi desks, shared offices, or dedicated office spaces to cater to different business needs.

5. Obtain Pre-approvals and Acquire the Necessary License.

Once you have finalized the legal entity, trading name, and office space, you need to obtain pre-approvals from the free zone authority. This may involve submitting required documents, such as a business plan, shareholder details, and passport copies. After receiving the necessary approvals, you can proceed with registering your company and obtaining the business license, which allows you to operate legally within the chosen free zone.

Investors who wish to establish a free zone company in Dubai must adhere to the procedure outlined above. Following these steps is essential to ensure a smooth and successful setup process within the Free Zone. The outlaid process is simple and has been made easy by the government to make the process friendly for investors.

The whole process has been put out in simpler terms and will not take more than four weeks to complete the Dubai freezone company formation and pave the way for the investor to start a free zone company formation in Dubai.

Advantages of Free Zone Business Setup in Dubai

Setting up a business in a free zone in Dubai offers several advantages that can greatly benefit entrepreneurs and businesses. These advantages include:

1. Complete Ownership of Business

One of the most significant advantages of free zone company formation in Dubai is that it allows 100% foreign ownership. Unlike mainland companies that typically require a local sponsor or partner, free zones permit full ownership by foreign investors. This provides greater control and flexibility in managing the business.

2. Full Profit Repatriation

Profits from free zone enterprises can be repatriated outside the UAE. This allows them to transfer 100% of their capital to their country of origin without any restrictions.

3. 9% Corporate Tax

The UAE laws state that companies with a revenue of less than AED 375,000 do not require corporate tax out of their business revenue, thereby helping small businesses; on the other hand, businesses with revenue of more than AED 375,000 have to pay 9% corporate tax.

4. Simplified Import and Export Processes

Simplified import and export processes are one of the advantages of setting up a business in a free zone in Dubai. In free zones, businesses are relieved from paying customs duties on imported and exported goods. Customs duties are taxes imposed on goods when they cross a country’s borders.

5. Strategic Location

Strategic location refers to the advantageous geographic positioning of free zones in Dubai, typically situated close to seaports, airports, and national borders. Being located near airports allows businesses to expedite the transportation of goods via air cargo. This facilitates faster delivery times, reduces shipping costs, and enhances supply chain efficiency.

6. Global Connectivity

Dubai has major seaports and airports that easily enable you to trade locally and internationally. The location provides easy access to distributors and manufacturers in the MENA region and South Asia.

7. Thriving Expat Entrepreneurs

Dubai draws millions of tourists and investors as one of the world’s most popular transit destinations. The city is home to a multi-national community, allowing you to connect with a global business community.

8. Range of Business Activities

Dubai free zones provide a diverse range of commercial activities, allowing entrepreneurs to explore a variety of sectors and businesses. Free zones accommodate diverse business activities, Whether trading, manufacturing, services, technology, media, healthcare, or consulting. This allows entrepreneurs to align their business ventures with their expertise and market opportunities.

9. Time-saving and Simple Registration Process

The entire procedure of acquiring a license is rather quick and simple. You can have simple access to free zone company formation and convenient administrative services as an investor.

Documents Required for Free Zone Company Formation in Dubai

Documents that will need to be produced before starting a Dubai Free Zone company Several documents will need to be produced by the investor and get approved from the Gulf Cooperation Council or the Arab embassy:

  • Application license form.
  • Business card.
  • Business plan outlay.
  • MOA(Memorandum of Association) and AOA(Articles of Association)
  • Passport copies.
  • Banking reference and license of the partner’s existing business if required.

The above-discussed procedure needs to be followed by an investor while starting a business in the Dubai-free zone. The outlaid process is simple and has been made easy by the government so as to make the process friendly for investors.

The whole process has been put out in its simpler terms and will not take more than 4 weeks to get complete and paving the way for the investor to start a free zone company formation in Dubai.

Register your Free Zone Company with Shuraa

Company formation in Dubai free zone offers numerous advantages. The government allows 100% foreign ownership, provides tax benefits, and allows full profit repatriation. Dubai’s strategic location, global connectivity, and thriving expat community provide access to diverse markets. With simplified import/export processes, a wide range of business activities, and a streamlined registration process, Dubai’s free zones attract entrepreneurs seeking a dynamic market.

Shuraa Business Setup offers comprehensive assistance for setting up your business in Dubai’s free zones. Our experienced professionals guide legal entity selection, trading name choices, and business license applications.

We help with office space selection, and handle documentation and pre-approvals, ensuring a smooth registration process. With our expertise in free zone regulations, we optimize the advantages of free zone business setup. Contact us today to start your business journey in Dubai’s thriving free zones.