Dubai has become a hub for global business, with companies worldwide taking advantage of the Emirate's strategic location, business-friendly regulations, infrastructure, and tax incentives. A key driver of Dubai's economic growth has been its free zones - designated areas that allow 100% foreign ownership and zero taxes.
Benefits of Setting Up in a Dubai Free Zone
There are many benefits to setting up a company in one of Dubai's free zones, including:
100% foreign ownership:- Free zones allow investors and entrepreneurs from any country to fully own their business without needing an Emirati partner, making it very appealing to international companies.
Flexibility: Free zones offer instant and affordable company setup processes. Some even allow virtual offices and flexible visa options.
Infrastructure:- World-class facilities, office spaces, warehouses, and advanced IT infrastructure suitable for any industry.
Gateway to regional markets:- Dubai is well positioned to access markets in the Middle East, Africa, Asia and beyond. Free zones provide an excellent springboard.
With these advantages, it's no surprise that over 50,000 companies operate out of Dubai's various free zones and are engaged in all business activities.
Types of Free Zone Business Activities
Dubai's free zones cater to almost every industry. Some of the significant business activities attracted to Dubai free zones include:
Trading and Logistics
Dubai is strategically located between Europe, Asia and Africa, making it a trading hub. Many companies use Dubai as a base for importing, exporting, re-exporting, breaking bulk, consolidation, and logistics for regional markets. Free zones like Jebel Ali Free Zone (JAFZA) and Dubai Airport Freezone (DAFZA) provide extensive facilities focused on these activities.
Consulting and Professional Services
There is a demand for consulting and professional services from companies entering regional markets. Free zones like Dubai Multi Commodities Centre (DMCC), Dubai International Financial Centre (DIFC) and Dubai Knowledge Park (DKP) cater to consultants, legal, finance, accounting, HR professionals and more.
Technology and Media
Dubai Internet City (DIC), Dubai Media City (DMC) and Dubai Studio City (DSC) allow 100% foreign ownership for tech startups, developers, media outlets, production houses and creative agencies. These zones contain media clusters, studios, data centres, incubators, and shared workspaces ideal for SMEs.
Manufacturing and Logistics
Companies focused on manufacturing or industrial services can operate in Dubai Industrial City or Dubai South Free Zone. They provide manufacturing facilities, warehouses, cold storage, customs centres and access to regional markets. Light and medium manufacturing is permitted.
In addition, niche free zones for commodities trading, science research, design, education, sports and more enable foreign investors to enter specific sectors and leverage Dubai as a regional base.
By setting up in a suitable free zone, international businesses can leverage Dubai as a strategic hub for their regional activities across the Middle East, Africa and South Asia.
Step-by-Step Process for Company Set Up
Setting up a business in a Dubai-free zone is a quick and smooth process relative to other global locations. Here is an overview of the typical setup process:
1. Identify Relevant Free Zone
Research the various free zones in Dubai and identify one that caters to your activity - trading, media, manufacturing, etc.
2. Choose Company Structure
Free zone company structures include Free Zone Limited Liability Company (FZ-LLC), Branch Office, Subsidiary and Freelancer Licenses for sole owners.
3. Reserve Company Name
Some free zones allow online name search and reservation before applying. This avoids clashes later on.
4. Appoint a Registered Agent
A registered agent handles all paperwork and processes on behalf of the investor. They usually provide end-to-end setup services.
5. Submit Documents and Apply
The registered agent will prepare all documents and licenses and submit the company application to the free zone on your behalf.
6. Get Approval and Establish the Company
Once approved, the free zone authority will issue the trade license, completing the company establishment.
7. Arrange Visas, Office and Employment
With the company established, applications can be made for investor visas, employee visas, office spaces and other post-licensing matters.
The process takes 4-6 weeks on average and can be completed remotely. With the help of a registered agent, investors can seamlessly establish a Dubai-free zone company.
Types of Licenses Based on Activities
Companies can apply for specific licenses within each free zone based on business activities. Major license types include:
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Trading License - For the import, export, distribution and storage of physical goods
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Service License - To provide services like consultancy, marketing, IT, design, support functions, etc.
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Industrial License - For light or medium manufacturing related to food & beverages, chemicals, machinery, materials, etc.
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Media License - For creative agencies, media outlets, production houses, broadcasters, publishers, etc.
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Logistics License - For freight forwarding, warehousing, distribution, shipping and related transport services
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National Industrial License - For industrial manufacturing for the UAE market under Ministry of Economy supervision.
Investors must obtain a license that matches their intended activities to operate legally. The free zone authority will assess the eligibility of companies and issue appropriate licenses.
Essential Things to Consider When Choosing a Free Zone
With over 30 free zones offering attractive packages, narrowing choice down to the most suitable one is vital. Here are essential considerations when selecting a Dubai free zone:
Business Activity: Free zones are aligned to fields like trading, consulting, manufacturing, media, etc. Assess which one caters specifically to your industry.
Location and Facilities: Zones differ vastly in location, office spaces, prebuilt warehouses and access. Evaluate options fitting business needs.
Cost: License fees, renewal costs, and facility rates vary. Choose ones offering value suited to your budget.
Regulations: Some zones allow 100% repatriation of capital, while others restrict it. Understand specific rules.
Target Markets: Trading zones like JAFZA provide access to UAE consumer markets while others focus outward.
Evaluating free zones based on these critical criteria will help businesses identify the most suitable one for their activity before initiating the setup process.
Conclusion
Dubai's free zones provide an unmatched platform for global businesses aiming to enter and expand in the region. By leveraging benefits like tax exemptions, 100% ownership and world-class infrastructure, companies can gain a strong foothold despite needing to be locally incorporated.
Carefully choosing a free zone based on your industry, evaluating location and facilities, and understanding regulations and licenses allow one to capitalize on Dubai as a strategic global business hub. Companies must align activities to relevant free zone licenses to operate legally.
With the right free zone partner, businesses can be established smoothly in 4-6 weeks, a relatively straightforward process. Once set up, valuable opportunities across the Middle East, Africa and beyond become available thanks to Dubai's extensive connectivity.
Frequently Asked Questions
Q: How much is the cost to set up a company in a Dubai Free Zone?
A: Costs vary by free zone but typically range from 20,000 to 65,000 AED for 100% foreign ownership companies. This covers licenses, visas, office rent, etc. Budget freelancer licenses start from 7,000 AED.
Q: Which free zone is best for consulting services?
A: Dubai Multi Commodities Centre (DMCC), Dubai International Financial Centre (DIFC) and Dubai Knowledge Park (DKP) are most suited for consulting services.
Q: What kind of manufacturing can be done in Dubai free zones?
A: Light and medium manufacturing is permitted, covering food & beverages, chemicals, machinery, materials, etc. Heavy industries are restricted.
Q: Can I get UAE residency by setting up a free zone company?
A: Every free zone company is eligible for an investor/partner visa. Employee visas are also available without any restrictions on nationalities.
Q: Can foreigners fully own the business in Dubai free zones?
A: 100% foreign ownership is permitted in all of Dubai's free zones without an Emirati partner or sponsor. Full capital/profit repatriation is also allowed.
Q: Can my Dubai free zone company work within mainland UAE?
A: Yes, through a local distributorship model or by setting up a commercial presence on the mainland under your free zone company.
Q: What are the visa requirements to set up a company in a free zone?
A: No entry visa is required. The company can be set up remotely. Once ready, applications can be made for investor or employee visas.
Q: How long does setting up a Dubai free zone company take?
A: With all documents in place, the process averages 4-6 weeks from beginning to end. Some free zones also offer express setup.
Q: What options do startups and entrepreneurs have for setting up in Dubai?
A: Options like freelancer licenses, coworking spaces, incubators with low rental rates and flexible packages are available in free zones.
Q: Can I open multiple companies in the same free zone?
A: An investor can establish multiple companies even in the same free zone by following all licensing rules and procedures.
Q: What support does the Dubai government provide for free zone businesses?
A: Free zones provide facilities, incentives, accelerated setup and renewal services. Dubai FDI actively promotes investment opportunities globally.
Q: Do I need an office space to apply for a free zone license?
A: Most free zones offer both – ready offices/warehouses to move in from day one or flex desks and coworking spaces for cost efficiency.
Q: Can free zone companies obtain UAE tenders or trade locally?
A: Yes, options exist, including Ministry of Economy registration and establishment of civil company onshore or on the mainland.
Q: How many free zones are there in Dubai?
A: Dubai has over 30 free economic zones catering to all major industries and business activities. Dubai Airport Free Zone and JAFZA are the largest.
Q: Do Dubai free zones allow cryptocurrency or blockchain companies?
A: Select free zones such as DMCC that allow cryptocurrency-related activities, including exchanges, mining, and storage, with some restrictions.
Q: Can I open a personal or savings bank account for my business in Dubai free zones?
A: Businesses registered in Dubai-free zones can easily open corporate or personal bank accounts with leading local and international banks.
Q: Do free zones offer flexibility related to visas and office spaces?
A: Yes, free zones offer customizable options, including virtual offices, freelancer licenses, flexible desk memberships, outsourced PRO services and pay-as-you-use visa packages.
Q: Can a business hold multiple licenses for different activities?
A: It is possible to apply for and obtain multiple licenses covering trading, services, ecommerce, consulting, etc., based on your operations.
Q: What support do free zones provide after licensing?
A: Ongoing support covers license renewals, immigration, leasing spaces or warehouses, legal compliance, etc., to ease operations.