UAE: How to set up a business in the free zone – News

With its global business creation ecosystem, the UAE has more than 45 free zones that ensure an influx of international investors and entrepreneurs for specific industry sectors.

Free zones offer a flexible business structure to foreign investors with international standards and a dynamic regulatory framework.

By Pratik Rawal/Viewpoint

Published: Mon 7 Nov 2022, 2:41 PM

Last update: Tue, 8 Nov 2022, 2:45 PM

Although the UAE is well known for its oil and petroleum industries, it has extended its skills to advanced businesses. The UAE maintains an advanced position by being a central point for global business activities.

A free trade area is an economic jurisdiction meant to trade certain goods and services with preferable import and export customs along with other operational advantages. Each free zone is subject to a unique legal and regulatory structure that oversees business operations.

With its global business creation ecosystem, the UAE has more than 45 free zones that ensure an influx of international investors and entrepreneurs for specific industry sectors. Thus, free zones offer a flexible business structure to foreign investors with international standards and a dynamic regulatory framework.

Why a free zone?

The ease of setting up a business with the favorable tax environment offered by the free zone makes it an even more competent place for a business.

Here we list the reasons for setting up in free zones:

1. Zero personal and corporate income tax

2. Quick and seamless business setup process

3. Free zones exemption from import and export duties

4. Many free zones such as Meydan and IFZA Free Zone, RAK, E-commerce City, SHAMS, SPC, Humriyah, DMCC, Kizad and TwoFour54 offer corporate setup options that allow 3-6 visas without renting an physical space.

Also, each free zone has various regulatory authorities for hassle-free approval, processing and business establishment. In addition, some free zones cater to specific industrial sectors and types of businesses.

Popular free zones in the UAE

Determining the suitability of a particular free zone depends on the type of business you plan to undertake. With over 40 free zones, the most popular free zones to consider for setting up a business in the UAE are Dubai Airport Free Zone, Dubai CommerCity Free Zone, Dubai Authority International Free Zones (IFZA), Sharjah Media City, Dubai Silicon Oasis, SPC Free Zone. , Ajman Free Zone, RAK Economic Zone, Khalifa Port Free Zone, Hamriyah Free Zone, Jebel Ali Free Zone, Dubai World Trade Centre, Dubai Multi Commodities Centre, Dubai International Financial Centre.

Financial Free Zones

Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM) are the only free zones in the UAE dedicated to financial businesses and business formation in banking, financial markets capital, fintech, wealth and asset management.

Commercial Free Zones

Dubai Multi-Commodities Center (DMCC) is a global commodity trading center in leading commodities such as gold, gemstones, base metals, agro, crypto and services system financials with DMCC Tradeflow, Dubai Gold and Commodities Exchange.

Jebel Ali Free Zone (Jafza) is one of the free zones with more than 8,700 companies in the fields of international logistics, petrochemicals, e-commerce, trade, food and agriculture , automotive and other specific industries.

The International Free Zone Authority (IFZA), located in the Silicon Oasis Area, is a free zone option for several startups to establish and grow quickly in a very important city like Dubai! The IFZA allows a person to combine professional, industrial and commercial activities under a single license.

The broad categories of licenses you can operate in IFZA are Services, Consulting, and Commerce.

Fujairah Free Zone, located next to Fujairah Port, is a commercial free zone for businesses linking logistics links to other international ports with warehouses, open land, custom-built units, and commercial and virtual offices.

Digital Free Zones

E-commerce is one of the most commonly done business setups. The Commercity Free Zone is primarily for digital commerce in the MENA region, which offers specific clusters for logistics and e-commerce business. Meydan Free Zone offers various business licenses, but it is the most popular among digital entrepreneurs and online market traders!

Dubai Outsource City is a free zone reserved for outsourcing companies and providers of shared services such as business process outsourcing (BPO), call centers, data centers, warehouses and IT outsourcing and HR.

Media free zones

Sharjah Media City Free Zone (SHAMZ) has become one of the cheapest and most popular free zones for entrepreneurs and startups in recent years. SHAMZ offers an extensive list of business activities, allowing investors to undertake multiple business activities per license.

Dubai Media City (DMC) is an integrated media free zone that hosts various international and local media brands. Dubai Media City’s creative business ecosystem offers potential business opportunities for freelancers, SMEs and entrepreneurs in media, production and creative fields.

Other media free zones include Ajman Media City Free Zone, Twofour54, Dubai Studio City and Dubai Production City.

Academic Free Zone

Dubai International Academic City is a free zone dedicated to the higher education and academic sectors. DIAC already hosts several local and international institutions and universities. Permitted activity in the DIAC includes educational services, online universities, secondary schools, freelancers, and non-academic and general activities.

Creative design free area

Dubai Design District (d3) is the free zone and the main creative hub with huge regional and global brands in art, design and fashion.

Creative City in Fujairah is the other free zone that offers flexible and cost-effective workspace solutions for specialist creative sectors, such as media, events, education, music, entertainment, design and technology, communication and marketing.

Technology, AI and futuristic activities, scientific research free zone

Dubai is positioning itself as the international logistics hub, contributing to the global supply chain system by transporting goods, products and services across countries. The Dubai South Free Zone focuses on the aviation and logistics sectors with its two offerings: Logistics District and MBR Aerospace Hub.

Dubai Silicon Oasis is an ideal technology park to establish modern technology companies with the availability of offices, warehouses, manufacturing sites, industrial units and even research and development (R&D) centers.

The Dubai Science Park serves as a hub to support entrepreneurs and startups in the science, energy, environment, health and pharmaceutical sectors. The free zone promotes scientific R&D and innovation by providing laboratory space, warehouses and commercial offices with modern infrastructure to establish a business in a scientific community.

Renewable energy

Masdar City Free Zone is one of the sustainable urban developments with a comprehensive support system for the business community. Business activities accepted in the Masdar Free Zone include clean technology and ICT, renewable energy, human resources, health services, energy industry, oil and gas services, real estate development, shopping centers and data, regional headquarters, trading and holding companies.

Create a business in a free zone

Although all zones have their respective regulatory framework governing the procedure for setting up a business in a free zone, here are the common documents required:

> The Registry Identification Code (RIC) form and business plan (original and notarized)

> Copies of business partners’ passports and color photos

> CV (curriculum vitae) (summary of professional history)

Steps for setting up a free zone company

1. Determine the business activity: If you are starting a business, you must first determine your business activity. Your business activity would allow you to select a free zone for your business.

2. Choose a business name: Although you must follow particular standards before selecting a business name, this varies from jurisdiction to jurisdiction as regulations do not apply in the Sharjah Free Zone and RAK Economic Zones.

3. Commercial license: It is essential to acquire a commercial license to trade in the free zone within the framework of the available economic activities.

4. Office spaces: Different free zones offer flexible office space depending on your activity and the free zones. You can either rent office space or work from a virtual address. Ideally, you can start with a small, affordable space, and as your business grows, gradually expand your office space.

5. Company registration: Registering your business requires an initial certificate of approval from the relevant jurisdiction and payment of registration fees, then, in addition, you can apply for visas for you and your family if necessary.

Free zones in the UAE offer the most prosperous environment to launch businesses, with top-notch facilities, an advantageous tax structure, lax government restrictions, and other amenities that make running a business easy.

Pratik Rawal is a Managing Partner at Ascent Partners, which provides bespoke business formation and advisory services to entrepreneurs who wish to set up a metaverse business in Dubai. The opinions expressed are his own and do not reflect the policy of the newspaper.

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