Dubai is currently one of the easiest places to register a company in the world. Apart from that, Dubai offers other advantages which is why the number of foreign investors interested in business setup in Dubai free zones is constantly growing. Enterprisers have two options for starting a business in Dubai and various types of legal entities to choose from. They can open a company within the Emirate or in one of its free zones. Dubai has more than 30 fully operational free zones and few others in the development phase, satisfying the needs of those intersted in company formation in a Dubai free zone.
Foreign enterprisers can choose to register free-zone limited liability companies or work as sole traders, while foreign companies can establish free zone companies with a corporate shareholder or branch offices. Investors can also operate as sole proprietors, provided that they apply for one of the professional licenses issued by the free zone authorities.
No matter the type of company one decides to set up in one of Dubai’s free zones, the following licenses are available:
For certain types of activities, minimum share capital requirements apply depending on the free zone where the company will be registered. Here is a video presentation for you:
The first and most important benefit of starting a business in a Dubai free zone is the great number of free zones surrounding the emirate. Dubai is now home to more than 30 free zones, however a few others under construction. It is also worth mentioning the fact the conditions for setting up companies in any of them are pretty much the same.
Companies operating in Dubai mainland have multiple tax advantages, however, these advantages are also present in its free zones. Among these, we mention:
Dubai free zone companies also benefit from exemptions on imports and exports. We can assist with VAT registration services in Dubai.
It is easier and quicker to register a company in a Dubai free zone than to set up a business on the mainland. This is because the company incorporation procedure of a business in a Dubai free zone is completed in one step.
Among the facilities offered by Dubai’s free zones are the office spaces, warehouses and the factories which operate within the same areas where the companies are. This way, the time and money spent on such facilities are reduced to a minimum.
One of the greatest advantage of business setup in Dubai free zones is the fact full foreign ownership is permitted. Compared to any free zone, incorporating a company in Dubai implies having a national partner who will own 51% of the shares in the company. The other reasons what make Dubai free zones so attractive are:
Depending on the free zone where the company will be located, tax exemption can be granted for a 50-year period of time.
Most foreign investors decide to open free zone companies in Dubai because of the following benefits:
Foreign investors who want to operate in UAE free zones by establishing companies here must respect the following steps:
It is useful to know that the free zone authority in which the company will operate will handle all the visa applications and company registration procedures through a fast-track process.
Our advisors can handle the preparation of the documents required to open a free zone company in the UAE.
The following requirements must be respected for company formation in Dubai free zones:
When choosing a Dubai free zone for company incorporation, foreign investors must know that each free zone offers business licenses related to one or more related industries. Free zones in Dubai can be grouped as it follows:
Apart from these, Dubai Multi Commodities Centre which is currently the largest free zone in the Emirate, was opened for foreign investors who want to open companies in the import/export industry.
One of the most important reasons foreign investors choose to set up companies in the UAE is the country’s taxation system which provides mainly for the taxation of companies operating in the oil and financial industries. It must also be noted that each Emirate has its own tax laws. Among them, Dubai has one of the most advantageous tax systems. Dubai also has an important number of free zones which govern themselves and have their own taxation systems.
Our company formation agents in Dubai can offer detailed information about the Emirate’s free zones.
Each free zone in Dubai has its own authorities which issues and enforces the applicable legislation, including tax decrees. The most popular free zone in the Emirate is the Dubai International Financial Centre, however, there are also other free zones offering advantageous tax conditions. A company is considered tax resident in a Dubai free zone once it is incorporated with the relevant authority and if the management of the company is exercised in Dubai.
Considering free zone authorities in Dubai do not impose a corporate tax, companies are not required to pay this tax in the Emirate or to follow other procedures related to taxation; therefore, companies are not required to file annual tax returns. There are no taxable periods or tax assessments imposed to free zone companies in Dubai.
Dubai free zone authorities do not impose any income tax on companies or individuals, which is why no dividend or corporate taxes are levied in any of them. However, the local authorities impose a municipal tax on properties held in this country. If the property is a rental, the tenant is usually required to pay this tax.
Dubai free zone authorities usually offer tax exemptions for up to 50 years to foreign companies operating here. However, foreign shareholders of Dubai free zone companies must pay attention to the taxes they are subject to in their home country and if any double tax treaty applies in their case.
If you want to open a free zone company and need assistance, you can contact our company formation agents in Dubai who can handle the registration and licensing procedures.