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Sohaib Ikram
Sohaib Ikram serves as the Director of Emerhub in Malaysia.
UAE offers more than 40 free zones across seven Emirates. From an incorporation perspective, these zones offer similar services as they allow foreigners to register their business, get a residence visa, a bank account, and an Emirates ID.
However, each free zone provides a specialized ecosystem that caters to certain business types more than others. That means access to the right customers, infrastructure, and additional benefits for businesses depending on the free zone.
In this article, we will explore the key factors that you must consider when determining the right free zone for your company in the UAE.
Understanding Free Zones in UAE
Free zones are designated areas in UAE that allow foreigners to register businesses directly with the Free Zone Authority, without having to go to any ministry or department.
UAE free zones offer certain benefits for businesses such as exemption from import/export duties, 0% corporate and personal tax rates, etc. Also, there is no physical office requirement if you register your company in a free zone.
In addition to that, these free zones have dedicated business centers where you can conduct your business activities and network with other businesses.
Factors to Consider When Choosing a Free Zone in UAE
When determining the right free zone for your business in the UAE, there are several key factors to consider. These factors include
Cost of incorporation
While the cost of registering a business in free zones within an Emirate is usually the same, it varies significantly if you compare it across different emirates.
In Dubai for example, the cost of registering a free zone company starts from AED 12,000. At the same time in the neighboring emirate of Sharjah, it starts from AED 7,000. The exact cost depends on the visa allocations for your free zone company. The more visas you need, the higher will be the cost.
Our experts at Emerhub can help you determine the most cost-effective free zone for your business.
Primary Business Activity
Generally, you can register your company in almost all the free zones in the UAE. However, there are certain exceptions based on your primary business activity.
For example, you are incorporating a company that deals with precious commodities such as gold. In that case, you are required to set up your business in the Dubai Multi Commodities Centre (DMCC) free zone.
In addition to that, some free zones offer additional benefits for some industries. For instance, CommerCity offers better infrastructure and support for e-commerce companies through its multi-client warehouse with pay-as-you-go model, display centers,etc.
Similarly, the TwoFour54 free zone in Abu Dhabi offers production services and 30% cash rebate on qualified production expenses for media related companies.
That does not necessarily mean you have to register your e-commerce or media company in these zones. It is more about the kind of benefits you are looking for.
Location
Your free zone location choice in UAE dictates whether you have access to your desired infrastructure and customers. A free zone near the seaport or at the airport can make it easier to manage imports and deal with customs. Similarly, a free zone near warehouses can help with stock management.
It is also important to know that your Emirates ID, bank account, driver’s license, etc in UAE will be issued from that emirate where your company is registered.
Availability of labor
In UAE, Dubai is considered as the hub for all businesses. However, due to the high cost of living, a lot of people prefer to live in the neighboring emirates of Sharjah or Al Ain.
Therefore, If your business requires access to low-cost labor, choosing a free zone outside Dubai might be a suitable option.
Choose the Right Free Zone with Emerhub
Emerhub can help find the perfect free zone for your business based on your specific industry, activity area, and objectives in the UAE.
Our team will analyze your case and determine which free zone has the optimal setup conditions and long-term benefits according to your situation.
For a more tailored consultation, fill out the form below.
