Things to Know Before Forming a Company in the Free Zone, Dubai
December 10, 2015
To start with, this is the best option that Dubai offers to trade investors who prefer 100% ownership of their business.
Free Zone Company Formation Dubai
Attention foreign trade investors!! If you are planning to set up a business in Dubai here is an opportunity to share the prosperity and richness of Dubai, which is the global point of trade intersection. Moving ahead, the excellent part of forming a business in the Dubai’s free zone is the full ownership of your company that you can enjoy here just like in your home country.
Dubai is quite liberal with regard to its trade rules and regulations and also the trade options are varyingly abundant unlike anywhere else in the world.
There was a time when people hesitated to set up business in Dubai. Because they need to share 51% of the ownership with a local Emirati partner. This partner is usually referred to as the sponsor. It is more or less like though you are the owner and the actual brains behind the company formation process your partner is also eligible to enjoy the benefits and you need the partner’s consent to take any serious action pertaining to the company’s requirements like recruiting new employees or for the sponsorship of employee visas, etc…
To attract foreign trade investments and to ensure that the investors enjoy the full benefit of their business set up in Dubai, Free Zones were introduced.
The establishment of Jebel Ali Free Zone in the year 1985 changed the face of Dubai.
With the objective to improve Dubai’s existing infrastructure and to provide foreign investors with greater trade investment opportunities:
The foreign investors can now enjoy 100% ownership rights of the business owned by them.
All the free zones that came into formation subsequently functions along the same rules of free zone setup in UAE. Also, one of the notable aspects of these free zones is that these focus on specific industry based businesses in particular.
With the introduction of Jebel Ali Free Zone, a benchmark was set for creating a standardized structure for implementing the rules and regulations that need to be taken into consideration during the process of company formation across free zones.
Dubai provides excellent business opportunities for foreign trade investors as it implements the best of operating and functioning parameters with a liberal system and you will be excited to know that there are no complications in the rules and regulations.
Advantages of choosing the free zone for company formation in Dubai
100 % business set up
Complacent import/ export services
Visas for investors, staff and family members with 3 years validity
No mainland labor rules are applicable here- so it is easy to hire staff.
Document clearance process is quite simple and hassle-free
You can choose either of the following legal forms: FZE- 1 owner, FZC- 2-5 owners, branch of foreign company
Things you need to take into consideration before choosing Free Zone for Company Formation in Dubai:
Usually, the free zones are located closer to the ports or airports, some of them are even located inside the ports while there are those that provide direct road access towards the Emirates.
In some of the zones License processing is an instant thing while in others it might take around 30-40 days before you get your license.
Also, at times capital investments are emphasized during company formation while at other times no investment is required.
Infrastructure & Facilities
To begin with Free Zones offers the best of modernized facilities and sophisticated amenities for the investors.
Free Zone Prestige
It is prestigious to own a business in the Free Zone though the entire process might be a bit expensive. You can also choose remote Free Zones if the high cost is bugging you up as some of these are popular too.
Also, the Free Zones provides the trade investors with an option to work and live in the Free Zones. One of the other amazing facts is that there are more than 20 Free Zones in Dubai each with a self-contained licensing body.
Things to keep in mind
When you choose the free zone for company formation in Dubai, the office needs to be established in Dubai- the center of economic life in UAE.
Choosing License type to Set up Business in Dubai Free Zones
Each of the free zones has their own type of licenses. Usually, the licensing names might differ but the protocols and the set of activities that you can perform using these licenses are similar. For instance, in some free zones you can find that “Trading” and “Commercial” licenses are issued separately while there are others which collaborate both under the same name “Trading”.
Trading & Commercial
You have the provision to indulge in trade activities that include import and export. You can trade with the UAE market but not directly, you can seek the assistance of a registered distributor or agent for your trade requirements. Import taxes are applied over these kinds of sales. This is mainly applicable for activities such as repairing, renting, shops, restaurants, maintenance, contracting and more.
As per the specifications made in the trade license, you can proceed with your professional services. These are applicable for services of any type such as industrial consulting, management, and even real estate consultations across the Free Zones. Alongside you can also specialize in activities such as event or exhibition organization, cleaning services, advertising and more.
You need an industrial license to import raw materials, to manufacture the business specific products and also for the export and distribution of the finished product. If you own 51% Arabian Gulf Cooperation Council ownership then you are also eligible for a national industrial license. The importance of this license is that it provides the owner with the same status as that of a local or AGCC in UAE.
It provides you with the license to engage in E-commerce services such as the online trading or any other kind of online stores.
When you need to implement logistic services that include Cargo (such as air, land and sea), starting with warehousing including package, storage, shipment, and transportation to distribution, a logistic license gives you the eligibility to carry out these services.
If you are planning to function as a free lance professional, you need to acquire a freelance permit which provides you with the license to act as the sole practitioner and also you can carry out your business under your own birth name rather than as a brand.
Here, we are providing you with the details of Free Zones in Dubai
1. Jebel Ali Free Zone or JAFZA
It was the first free zone that came into formation in the year 1985 and is managed by the Economic Zones World. Mainly focuses on trading, manufacturing, assembling, and logistics services.
Again located in Jebel Ali, started its operations in the year 1985. Managed under the supervision of Economic Zones World and specializes in Professional Activities, Industrial Activities, & Trading of specified items
3. Dubai Airport Free Zone or DAFZA
It came into formation in the year 1996 and is located adjacent to the Dubai airport. It is managed by the investment Corporation of Dubai. A major focus is on trading, light industry, assembling, services and logistics.
4. Dubai multi commodities Centre (DMCC)
The DMCC located in Dubai was established in the year 2002 and is managed by the DMCC Authority. It operates across commodities, tea, gold, diamond, pearl, metals, minerals, cotton and more,
5. Jumeirah Lake Towers Free Zone (JLT Free Zone)
Located in Dubai, formed in the year 2002 and is managed by the DMCC Authority. Operates across trading and services.
6. Dubai Silicon Oasis (DSO)
It is an advanced technology park that was established in Dubai in the year 2004. It is managed by the Investment Corporation of Dubai and operates across a large number of sectors including Micro Electronics and general activities.
7. Dubai Flower Centre (DFC)
DFC is located adjacent to the Dubai airport. It was launched in the year 2004 and is managed by DAFZA/ Dubai Airports. It specializes in the trade of plants, cut flowers, fruits and vegetables and foliages.
8. Dubai Internet City (DIC)
The Dubai Internet City or DIC was launched in the year 2004. It is managed by the TECOM Investments under the regulation of Dubai Technology and Media Free Zone Authority (DTMFZA). It supports the operation of Software, The internet, and multimedia, telecommunication, and network.
9. Dubai Media City (DMC)
Started its operations in the year 2001 and is managed by the TECOM Investments under the regulation of the Dubai Technology and Media Free Zone Authority (DTMFZA). It operates across various fields such as Advertising and Communication, Media and Marketing Services, Event Management, New Media, Freelancers, Event Support Services, and Non-Profit Association.
10. Dubai Knowledge Village (DKV)
It was launched in the year 2003 in Dubai and is managed by the TECOM Investments and is regulated by the Dubai Technology & Media Free Zone Authority (DTMFZA). It operates across Human Resource Management, Content Development Centre, Executive Search, Assessment and Testing, Research & Development, Academic Service Provider, and more.
11. Dubai Outsource Zone (DOZ)
Located in Dubai and formed in the year 2004 and is managed by the TECOM Investments and is regulated by the Dubai Technology & Media Free Zone Authority (DTMFZA). It operates across Business Process Outsourcing, IT Sourcing, Call Center and Back Office Operations.
12. Dubai Biotechnology & Research Park (DUBIOTECH)
Established in the year 2005 in Dubai and is managed by TECOM Investments under the regulation of Dubai Technology & Media Free Zone Authority (DTMFZA). It operates across a variety of segments that includes Therapeutics, agriculture, forestry, horticulture, food environment, specialty, supplies, life sciences, diagnosis and analysis and more.
13. Dubai Studio City (DSC)
It is located in Dubai and started its operations in the year 2004. It is owned by the TECOM Investments and regulated by the Dubai Technology & Media Free Zone Authority (DTMFZA). It operates a wide range of segments that includes Broadcasting TV, Animation, Film Support Services, Music & Entertainment, Themed Amusement and Recreation Activities.
14. Dubai International Academic City (DIAC)
It was formed in Dubai in the year 2007. It is owned by the TECOM Investment and regulated by the Dubai Technology & Media free Zone Authority (DTMFZA), Ministry of Higher Education, Knowledge, and Human Resource Authority. It operates across the following segments that include education providers, non-academic education service providers, boarding schools, freelancers, online universities and more.
15. International Media Production Zone (IMPZ)
It was organized in Dubai in the year 2005 and is owned by the TECOM Investments and regulated by the Dubai Technology & Media Free Zone Authority (DTMFZA). It works across the following segments that include Printing Consumable Manufacturing, Printing Machinery and Printing Press, Packaging Machinery, Publishing, Graphics arts support services and storage designs.
16. Energy and Environment Park ( EnPark)
Formed in the year 2006 and is located in Dubai and is owned by the TECOM Investments and regulated by the Dubai Technology & Media Free Zone Authority (DTMFZA). Operates across a variety of sectors including energy efficiency and green building, recycling and also solid waste sectors.
17. DUBAI HEALTHCARE CITY (DHCC)
Established in the year 2002 and is located in Dubai. It is managed by the Dubai Healthcare City Authority Center for Healthcare Planning & Quality. It operates across a variety of healthcare sectors including conventional medical services, complementary and alternative medicines, medical education and research, hospitals, diagnostic laboratories, healthcare commercial services and support services.
18. Gold and Diamond Park (GDP)
It came to be formed in the year 2001 and is located in Dubai. It is managed and owned by the Emaar Properties PJSC. It operates across a variety of segments including trading, manufacturing, crafting and designing of gold and diamond jewelry.
19. Dubai Cars and Automotive Zone (DUCAMZ)
It is located at Ras Al Khor, Dubai and was formed in the year 2000. It is managed by theEconomic Zones World (EZW) and majorly focuses on trading in automotive.
20. Dubai Textile City
Located in Warsan, Dubai, started operating in the year 2003. It is managed by the TEXMAS and operates along the segments of textiles and readymade garments.
I. Dubai World Central – Logistics City
Located in Jebel Ali, and was formed in the year 2010. It is managed by the Dubai Aviation City Corporation. It operates across a number of segments that includes logistics, general trading, services, and education.
II. Dubai World Central – Aviation City
Located in Jebel Ali, started its operations in the year 2010. It is managed by the Dubai Aviation City Corporation and it operates across the segments such as light manufacturing, general trading, services, education, and consultancy.
22. International Humanitarian City (IHC)
It is located in Jebel Ali and started out its operations in the year 2010 and is managed by the IHC Authority. It operates across Non-Profit Organizations and Commercial Companies.
Are you doing business in Dubai? Free Zone or Mainland? How easy do you find the operations? Share your thoughts and comments with us……
Legal Maxims is one of the international law firms providing legal and corporate consultations and we support budding business investors in their venture to Business setup Dubai. We guide people and provide them with the necessary assistance to help them realize their dreams of company formation in the Dubai free zone. Are you planning for trade investments in Dubai? Then, it is going to be a great start. Contact us and we will help you venture further in your business formation goals.