Free zones are another strong pull for entrepreneurs. These zones offer a fast route for businesses to set up, as well as numerous other benefits that can assist a company in becoming successful.
This article provides a guide to starting a company in a Dubai free zone, including:
- What is a Dubai free zone?
- Benefits of a Dubai free zone
- How to set up a business in a Dubai free zone
- How much does it cost to open a business in a Dubai free zone?
- Free zones in Dubai
- Why choose Worldwide Formations?
What is a Dubai free zone?
In simple terms, a free zone is an area specifically developed to make the trading of goods and services within Dubai, the UAE and further afield. The UAE has numerous free zones, although Dubai is home to most of them. Some of these are geared towards specific sectors, such as healthcare, technology and media.
Businesses based in a free zone can trade within that zone and overseas. They can also trade in the UAE through service agents and distributors.
Free zones differ from mainland and other zones, although there are benefits to starting up on the mainland too – it depends on the activities your business carries out and your target customers.
Benefits of a Dubai free zone
One of the primary benefits of locating in a Dubai free zone is that non-UAE nationals can own 100% of a business and repatriate all the capital and profits to their home country. They also benefit from features such as total exemption from customs tax and no restrictions on currency.
These benefits are in addition to the many that entrepreneurs can take advantage of no matter where they are based in Dubai, such as not having to pay income tax and VAT being levied at only 5%.
Dubai also has one of the most technologically advanced infrastructures in the world, a pro-business government and plenty of opportunities to gain investment. Transport links – internal and to the rest of the world – are also advanced.
How to set up a business in a Dubai free zone
When establishing a business in a Dubai free zone, there are certain steps that every entrepreneur will need to complete before the business can start trading. While an entrepreneur can do this on alone, there are specialists that can handle the process on their behalf, such as Worldwide Formations, and ensure the process is completed quickly and smoothly. Contact us today for a personalised quote.
Here are the steps:
Choose what the business will do
From the outset, an entrepreneur should be clear about what activities they intend to undertake once the business has been formed. There are some 2,000 business activity options that entrepreneurs can choose from, and businesses can choose more than one activity. This is significant as it can influence where you choose to base the business – some free zones specialise in specific business sectors – and what form it will take, such as a partnership or limited liability company.
Decide on a business name
Naming a business can be crucial, so a lot of thought must be put into it. There are certain rules in Dubai about naming businesses, and these must be taken into consideration before applying to form a company, as the wrong name will be rejected by the authorities.
For instance, a company cannot share a name with an existing business based in Dubai – it must be unique. The name cannot contain anything considered profane or blasphemous either. Finally, if you plan to use your own name in the company name, it has to be in full – initials are not allowed.
It is worth having several options for the company name in case your preferred choice is rejected.
Choose which free zone to set up in
Which free zone in Dubai you choose will depend on several factors, such as the company’s size, and what goods or services it will provide. For instance, those wanting to trade internationally may be more suited to free zones with good links to the airport. Meanwhile a media business would be suited to a zone specialising in that sector.
Secure a trade licence
Once the above has been done is time to apply for a trade licence. Various licences can be applied for, depending on the sector the business operates in, including commercial, industrial and professional services.
This application should be made to the free zone’s managing authority.
To live and work in Dubai, a valid visa is required. Most free zones include visas in their licence packages.
Note that the application process requires the applicant to have a medical, including a blood test and chest X-ray.
Once a person has a visa, they can sponsor others – such as a spouse or children – to receive theirs too.
How much does it cost to open a business in a Dubai free zone?
The costs of starting a business in a Dubai free zone vary depending on things like how big the business it is and what goods and/or services it provides. The cheapest option starts at AED 12,500, which is in the Meydan Free Zone.
Specialists can help with this, ensuring the cost is as small as possible. Contact Worldwide Formations for a personalised quote.
Free zones in Dubai
There are numerous free zones in the UAE, but the most can be found in Dubai. They are:
- Dubai South
- Dubai Multi Commodities Center
- Dubai Airport Free Zone
- Dubai World Trade Centre
- Dubai Silicon Oasis
- Dubai Internet City
- Dubai Academic City
- Dubai Biotech Research Park
- Dubai Design District
- Gold and Diamond Park
- Dubai Healthcare City
- Dubai Industrial City
- Dubai Intl Financial Centre
- Dubai Integrated Economic Zones
- Dubai Knowledge Village
- Dubai Media City
- Dubai Outsource Zone
- Dubai Studio City
- Dubai Techno Park
- International Media Production Zone
- Khalifa Industrial Zone
- Meydan Free Zone
Why choose Worldwide Formations?
This article shows that business setup in the UAE can be very rewarding, especially in a free zone. But the formation process can be lengthy, and each free zone has its own rules, which means that it can be complex for entrepreneurs to negotiate, especially if they are unfamiliar with Dubai and its business laws.
Consultants such as Worldwide Formations can help entrepreneurs set up a business in a Dubai free zone as smoothly and quickly as possible.
Worldwide Formations has helped many businesses set up in a Dubai free zone, and our consultants are experienced in navigating the system with skill, leaving the entrepreneur free to get on with ensuring the business is a success.
For a personalised quote and more information, please contact Worldwide Formations today.