In the past, we wrote about asset protection by investments in real estate in Dubai and phantastic revenues which can be achieved by these investments.
Today, we intend to tell you more about Free Zones Companies and clean up with a couple of myths around them. UAE have over 40 different Free Zones, over 20 of them are located in Dubai. These Free Zones differ based on the served industries and requirements. There are Free Zones which require a fixed minimum amount for the incorporation and others being more flexible in this regard; some expect the company to maintain a physical office in place, some are fine with a virtual office only; the number of maximal visa applications for residency sponsored by the company can also vary from one Free Zone to another. As you can see, it is important to select the most suitable Free Zone right from the beginning. If you do international business and are only seldom in UAE, it probably does not make much sense to maintain a physical office, but such requirements can impact the total costs of your Free Zone company in UAE.
It is also important to evaluate upfront the possibilities of growth and expansion within the same Free Zone. Some Free Zones may have certain limitations in regards of certain activities and/ or sectors, while others – again – provide more flexibility also in this regard.
Furthermore, you can hear or read different myths around Free Zones in Dubai. Let’s have a look at a few of them:
Myth number 1: you cannot own your company in Dubai to 100%. Correct is: while the mainland company can be owned up to 49%, a Free Zone company can be yours to 100%.
Myth number 2: Free Zone companies in Dubai are completely tax-free. This – again – is not fully correct. Since July 2024 all companies in Dubai have to do their accounting and submit their revenue declarations. The Free Zone companies as well. If the income of the company is a Qualifying Income according to the Dubai tax law, indeed, you do not need to pay taxes on it. If it fails to meet the criteria of a Qualifying Income, a tax rate of 9% will apply. By the way, many Free Zones in Dubai work with professional accountants allowing you to outsource this part of your business. Here as well, there are ways and opportunities to improve your taxes lowering their absolute amount practically to 0.
Myth number 3: a Free Zone company is not allowed to do business with Emirates’ mainland. Correct is: it depends on your business and possible authorizations. There are ways how to setup your company and allow you doing business with (or even in) mainland if your company is a Free Zone company. Again, it’s a subject for special approvals, but in general it is not fully excluded or impossible. To consider is, for example, engaging a mainland logistic partner for handling intra-UAE goods movements or setting up a mainland subsidiary.
When evaluating the right Free Zone for you, you might also consider the location, the Emirate in which the Free Zone is located, and the proximity to the international travel opportunities, like airports. Sharjah and Ras Al Khaimah are not only more conservative compared to Dubai but are also much farther away from Dubai International Airport than Free Zones located directly in Dubai.
On top, if you intend to invest in property in Dubai via your Free Zone company (yes, this is possible), your Free Zone company should be located in Dubai as well.
What would be the process of incorporation of a Dubai Free Zone company? If you are alone or do not require any Dubai visa, a Free Zone Establishment (FZE) would be sufficient for you. If you wish to sponsor a Dubai residence Visa via your company for you and your wife (as an example), an FZCO (Free Zone Company) would be the right choice for you.
You need to evaluate the legal entity and the type of activities you will be involved in. Choosing the name for your Free Zone Company, you need to ensure that it complies with the local law and UAE name criteria.
After that you apply for the necessary business license (or licenses) and choose the best suitable office space (virtual office, flex desk, physical office).
When the pre-approvals are in place, you can complete the registration and obtain a business license(s). With it, your company is open and can sponsor your Dubai residence visa.
Getting a local residence visa is again a process which requires multiple steps including, for example, health checks and biometric taking in one of the authorized centers in Dubai.
Are there any further advantages of owning a Free Zone Company in Dubai apart from sponsoring a local residence visa? Definitely yes. The main benefits are:
- 100% ownership possible
- Free capital transfer
- Strong banking system with governmental support
- Full repatriation of profits possible
- No restriction on fund transfers
- 100% ownership of fixed assets
You should count a couple of weeks for the incorporation of your Free Zone company and a further couple of weeks for the residence visa application.
Working with one of the strongest and best-established Free Zones in Dubai, Singabiz offers you different packages for opening your UAE Free Zone Company as well as for residence visa application, from the basic one (where you proceed certain activities on your own when being in Dubai) to VIP packages when you will be picked-up at your hotel and accompanied by our local colleagues to your appointments (for example, for health checks and biometrics) as well as fast-track processing of your documents.
If you are interested in incorporating your own Free Zone Company in Dubai and in getting your residence visa, do not hesitate to contact us or to book one of our consultation packages.
