UAE Free Trade Zones
Five of the seven Emirate states of the UAE consist of more than forty Free Zones or Free Trade Zones today. Each of these Free Zones is home to an expansive number of foreign ventures that operate in a variety of industrial sectors. While the main idea behind establishment of Free Zones was to attract foreign investment to boost the nation’s economy, they have today become the central point of conducting business in the international market. UAE’s strategic location between Europe, Africa and Asia along with robust infrastructure and a host of other advantages have made it one of the most sought after Free Zone areas of the world.
Each Free Zone in UAE has been developed around one or more business industries and issues licenses to companies within those defined parameters. Furthermore, they have their own set of rules and regulation which must be followed in order to smoothly operate in the jurisdiction. Free Zones offer a host of advantages to its incorporators in terms of ownership rights, taxation policies, business operations, local resources and much more.
Advantages of establishing a venture in Free Trade Zone in UAE
Major benefits of incorporating a business in one of the Free Zones of UAE are as follows: –
- No taxes on personal income and capital gains
- 100% foreign ownership is allowed
- No corporate taxes are applicable
- No export or import duties
- 100% repatriation of profits and capital
- Easy availability of cheap of labour with liberal labour laws
- Modern efficient communications
- Attractive working atmosphere
- No restriction on currency
- Exemplary support services
Free Zones in UAE offer ideal business operating facilities:-
- Land on lease offered for investor development
- Pre-built factories/ warehouses / office units for lease
- Executive office spaces for International Business center for lease
- Air, sea and road transportation facilities
- Availability of inexpensive and abundant energy
Set Up Business in a Free Zone in UAE
Most companies planning to establish base in one of the Free Zones fall under the following broad categories based on their business undertakings.
- Branch of a foreign company or a branch of an offshore company (subject to approval from the Free Zone Authority)
- Free Zone Company / Establishment (FZC / FZE / FZ LLC)
- The FZEs or FZCs are limited liability companies which are owned by a corporate entity or an individual.
There are certain basic requirements that a venture must fulfill in order to conduct smooth business activities in the Free Zone. A company must:-
- obtain a trade license for an activity it plans to undertake in the Free Zone. The license must be renewed every year.
- have a rented office space in its own name which must be renewed annually.
- have a Manager authorized to act as the legal representative of the venture.
- have a minimum of one shareholder and the compulsory share capital.
- not trade outside the boundaries of the Free Zone without a local distributor in hand.
As stated above, each of the Free Zones has their own sector preferences and rules, regulations, facilities, etc. Major activities that can be undertaken include import, export, industrial commodity production and distribution, logistics, packaging, health related businesses, advertising, broadcasting, public relations, web-based services, IT support, software development, etc.
Choose the Right Free Zone
A host of factors must be considered while determining which Free Zone would be the most suitable for the incorporation of a new business venture. These factors include:-
- Location of the Free Zone,
- Infrastructure and facilities offered,
- The reputation of the Free Zone
- The licensing process of the proposed business activities
- Cost of establishment (setup cost plus recurring costs)
- Hidden charges,
- Numerous other factors based on the requirements of the business, etc.
Free Trade Zones in the UAE
Some of the Free Trade Zones in UAE are as follows:-
- Jebel Ali Industrial Zone-JAFZA
- Dubai Airport Free Zone-DAFZA
- TECOM Investments
- Jumeirah Lake Towers
- Dubai International Financial Centre (DIFC)
- Dubai Silicon Oasis
- Sharjah Airport Free Zone-(SAIF Zone)
- Hamriyah Free Zone – (HFZ)
- RAK FTZ
- RAK Investment Authority
- RAK Media free zone
- Abu Dhabi Airport Free Zone
- Abu Dhabi Twofour54
- Masdar City
- Khalifa Industrial Zone Abu Dhabi (Kizad)
- Dubai Gold & Commodities Exchange
- Dubai Gold & Diamond Park
- Dubai Healthcare City
- International Humanitarian City
- Dubai Flower Center
- Dubai Maritime City
- Dubai Logistic City
- Dubai Textile Village
- Dubai Cars & Automotive Zone (DUCAMZ)
- Dubai Carpet & Textile City
- Dubai Sports City
- Higher Corporation for Specialized Economic Zones( HCSEZ), also called Zones Corp, Abu Dhabi
- Fujairah Free Zone
- Fujairah Creative City
- Ajman Free Zone.
A Professional Partner
In order to establish a business in one of the Free Zones in UAE, every incorporator needs to undergo a hefty set up process that involves preparation of the business model, conducting a thorough research of the market scenario and other factors, arranging the right documents, surveying the location and much more. Going through the entire process alone can be a tedious and highly time consuming task. It is best to seek the assistance of a professional consultant like Jumeira Consultants who can not only simplify the incorporation process for you but also educate you about all the rules, regulations and legal formalities involved. Talk to one of our professional executives today and gain a thorough insight of the Free Trade Zones of the UAE.