Are you planning to set up your business in Dubai as a foreigner? Dubai’s free zones offer an easy gateway with several incentives and exemptions.
In this article, we will talk about what are free zones in Dubai and walk you through the necessary steps to open your company in a free zone.
What are Dubai Free Zones?
Free zones in Dubai are special economic areas that are established by the UAE government to attract foreign entrepreneurs and investors to start their businesses here. Every free zone is governed by the Free Zone Authority (FZA).
There are 45+ free zones in the UAE while 26 of these free zones are in Dubai. These free zones are usually sector-specific. This means that each free zone is designed to support specific types of businesses and provides the relevant infrastructure.
For example, Jebel Ali Free Zone (JAFZA) is known for its logistics and shipping capabilities while Dubai Healthcare City (DHCC) caters to the healthcare sector.
Here are some reasons why people prefer to set up their business in Dubai free zones.
- 100% foreign ownership
- No taxes on corporate or personal gains
- No custom duties
- No physical office requirements
- Easy process to set up a company
The downside of establishing a company in Dubai free zones is that you can’t directly do business on Dubai mainland. For example, if you have a clothing company, you are not allowed to sell your clothes on the Mainland. If you want to do so, you either have to partner with a mainland company or request an additional license.
For a detailed comparison of the mainland and free zone, read our article on the difference between mainland and free zone companies in the UAE.
Types of Companies in Freezone
There are three types of companies that you can register in a Dubai free zone.
- Free Zone Establishment (FZE): Also known as Sole Establishment as it only has one shareholder
- Free Zone Company (FZ Co)/ Free Zone LLC: FZ Co is a type of company with two or more shareholders. These shareholders can be both individuals or legal entities.
- Branch Office: For foreign companies or companies operating in the UAE mainland.
Required Documents to Setup a Company in Dubai Free Zones
While the basic documentation to open a free zone company in Dubai is quite straightforward, free zone authorities may require additional documents based on the primary business activity.
For example, if your main business activity is related to real estate, you need approval from the Real Estate Regulatory Authority in UAE.
Here are the general requirements to set up your business in a Dubai Freezone:
- Filled application form
- Copy of passport and CV for all shareholders
- 3 Trademark/business name options
Our experts at Emerhub can help you compile all the documentation and obtain the necessary approvals to register your company in Dubai.
How to Set up a Business in Dubai Free Zone
Determine the Business Activity
When planning to set up a company in the Dubai free zone, one of the first steps is to decide the primary business activity.
Each free zone specifies a defined list of permitted economic activities that investors can undertake. For instance, DMCC offers over 600 business activities ranging from software development to public relations and more.
Once you decide on the primary activity for your business, you have to choose the business license that relates to that activity. These business licenses include service licenses, trade licenses, industrial licenses, and others.
Our experts at Emerhub can help you determine the most appropriate business license considering your planned commercial activities.
Choose Your Emirate
There are 7 emirates in the UAE: Dubai, Sharjah, Abu Dhabi, Ajman, Ras Al Khaimah, Umm Al Quwain, and Fujairah.
All of these emirates offer certain advantages to businesses over the others. For instance, Dubai is a global business hub and offers advanced infrastructure for businesses. Meanwhile, Sharjah is known for cost-effective labor and accommodations.
Therefore, when establishing a company in a free zone, It is important to choose the emirate that resonates with your business goals.
Another thing to keep in mind is that you must apply for your Emirates ID and visa in the specific emirate where you will register your company. However, It does not mean that you will be restricted to that specific emirate, your visa and ID are valid everywhere.
Choose the Right Freezone to Setup Your Company
While all free zones within an emirate offer almost the same benefits, some free zones are tailored to specific activities.
For example, if your business activity is related to imports and exports, Jebel Ali Free Zone (jafza) offers good rates and flexibility. Or, if you deal in commodities or precious metals, you have to go to the DMCC free zone.
Therefore, it is important to look into all your options and restrictions in place and choose a free zone that suits your needs.
You can also get in touch with Emerhub specialists in this regard. We provide guidance and help you open your company in a suitable free zone.
Reserve Trademarks and Apply for a License
Once you have decided on the free zone, the next step would be to ensure your business name/ trademark is available. You can check that online or with respective free zone authorities and reserve your trademark. At the same time, you can decide whether you want to have a flexi-desk or a dedicated office.
Then you need to apply for the license for your business and submit all necessary documents. Free zone authority reviews the application for initial approval and then issues the license.
Apply for a Visa
When you register your company in a free zone in Dubai, you are also issued an Immigration Establishment Card. Based on this card, free zone authorities issue you an e-visa so you can come to Dubai and move forward with the process.
After getting your Investor Visa, you also can apply for visas for your dependents and employees as well.
Moreover, for your medical examination and to apply for the Emirates ID, you are required to come to Dubai.
Open a Business Bank Account in Dubai
Financial institutions in Dubai have strict regulations and enhanced due diligence procedures in place. As a business owner, you need to comply with documentation requirements and other criteria in place.
Emerhub helps you navigate the regulatory policies and prepare all necessary documents to facilitate the account opening process for your business.
Cost of Setting Up a Business in Dubai Freezone
The total cost of opening a company in Dubai free zones depends on various factors such as business activity and the number of visas you need.
If you don’t need any visas, the cost would be significantly lower as you just pay the license cost. The business license cost with a shared desk lease in the Dubai free zones can be about AED 12,500 which is paid annually.
On the other hand, even when you need only one visa, the visa allocation cost is automatically added to your total costs. In that case, you pay the following:
- License cost
- Visa allocation cost: around AED 1850 per year added to license cost per visa
- Immigration Fees: includes Establishment Card, Investor Visa, Emirates ID, Medical)
If you want a company with multiple visas, the visa allocation cost goes up for each additional visa.
For a more accurate cost estimate based on your requirements, get in touch with our experts by filling out the form below.
Set Up Your Company in a Dubai Free Zone with Emerhub
Our experts at Emerhub have helped thousands of entrepreneurs establish and expand their businesses in the UAE and other countries. We understand the Dubai free zone rules and regulatory policies and guide you through every step of the process from finalizing the zone to opening a bank account.
For a more tailored consultation, fill out the form below.