Freezone Company Formation in UAE
What is Freezone in UAE?
A freezone entity is an economic area where the trade of goods and services at typically a preferential tax and customs rate is permitted. The idea to launch free zones in the UAE was to attract and increase foreign companies to establish their presence in UAE leveraging on benefits such as 100 % foreign ownership.
Currently, more than 45 free zones are operating in the UAE with Dubai taking the majority.Some for the well known freeznes in UAE are JAFZA ,DWC,DMCC,DAFZA,DWTC,Dubai Silicone Oasis Free Zone,KIZAD,Hamriyah Freezone,SAIF,AJMAN Freezone,RAKEZ,Umm Al Quwain Freezone,SHAMS etc.
List of Freezones in the UAE
Free Zones in Dubai:
• Dubai Multi Commodities Centre (DMCC)
• Dubai Airport Free Zone (DAFZA)
• Dubai World Trade Centre Free Zone (DWTC)
• Dubai Science Park
• Dubai Car and Automotive City Free Zone (DUCAMZ)
• Dubai Design District
• Dubai Gold and Diamond Park
• Dubai Healthcare City (DHCC)
• Dubai Industrial City (DIC)
• Dubai International Academic City
• Dubai International Financial Centre (DIFC)
• Dubai Internet City (DIC)
• Dubai Knowledge Village
• Dubai Logistics City
• Dubai Media City
• Dubai Outsource Zone
• Dubai Silicon Oasis
• Dubai Studio City
• Dubai Techno Park
• Dubai Technology and Media Free Zone
• International Media Production Zone (IMPZ)
Free Zones in Abu Dhabi:
• Abu Dhabi Global Markets (ADGM)
• KHALIFA Industrial Zone (KIZAD)
• Masdar City Free Zone
Free Zones in Sharjah:
• Hamriya Free Zone (HAFZA)
• Sharjah Airport International Free Zone
• Sharjah Publishing City Free Zone
• Sharjah Media City Free Zone (SHAMS)
Free Zones in Fujairah:
• Fujairah Free Zone
• Fujairah Creative City
• International Free Zone Authority (IFZA)
Free Zones in Ras Al Khaimah:
• Ras Al Khaimah Economic Zone (RAKEZ)
• RAK Maritime City Free Zone Authority (RMCFZA)
Free Zones in Ajman:
• Ajman Free Zone
• Ajman Media City Free Zone
Free Zones in Umm Al Quwain:
• Umm Al Quwain Free Trade Zone (UAQFTZ)
Types of Entities for Freezone Company Formation in UAE
In the UAE, Foreign Investors can choose between incorporating a Freezone Establishment, also known as FZE or a Freezone Company, also known as FZCO, FZC or FZ LLC.
What is the main difference between an FZE and FZCO?
|Factors||Freezone Establishment (FZE)||Freezone Company (FZCO)|
|Shareholder||There is only be one shareholder which can either be an individual or a company||A min of 2 and maximum of 5 Shareholders are required for this type of freezone company formation.|
|Share Capital||Depending on the type of activity and freezone this can vary between AED 1000- AED 300,000||Depending on the type of activity and freezone this can vary between AED 1000- AED 300,000|
FZ LLC vs Mainland LLC in UAE: What is the difference?
A freezone LLC is established by its individual or corporate shareholder or a combination of the two as an independent legal entity with limited liability corporation. It is 100 % owned by the foreign investor, unlike the mainland LLC
|Requires local partner or sponsor who will own 51 % of shares.||Can be 100 % foreign-owned|
|There is only be one shareholder which can either be an individual or a company||Can only trade within the designated freezones . Requires mainland distribution agent to do business within UAE, i.e. outside of the freezone in which the company is registered.|
|Can conduct commercial, professional or industrial activities.||Can conduct commercial, professional or industrial activities.|
Type of Business Licence of Freezone Company Formation in the UAE.
The type of trade licence you require for your freezone company in UAE depends on what kind of business are you going to conduct. Below is the kind of licences for freezone company formation in the UAE.
General Trading Licence
This type of licence allows you to do trading activities such as import and export, and deal the in trade and distribution of goods and commodities
With an industrial licence, you are permitted to manufacture, package and process.
If you are looking to offer professional services such as accountancy or consulting, then this type of licence is the ideal choice.
National Industry Licence
If the UAE government has acquired at least 51% Ownership of your manufacturing business in the UAE, you need to apply for a National Industry Licence.
Innovation Licence & Tech Start-Up Licence
This type of licence is provided only by select freezones and is usually only granted to tech startups with a focus to scale regionally and to Tech start-ups aligned with the UAE National Innovation Priority Sectors. This type of licence is not available for technology service providers.
In UAE you must legally register your online store to sell goods. This type of licence enables you to carry out e-commerce activities.
The Freelance permit, in essence, is not a trade licence but rather a permit that enables you to offer services and expertise as a sole practitioner. You cannot employ staff. The permit can be considered as legal permission for you to render your services as an independent, individual contractor. The permit holder can also apply for VISA for him once permit is issued .Once his VISA is stamped to th passport ,he can sponsor his family visa.
Dual Licence (Abu Dhabi)
All the free Zone companies in Abu Dhabi can apply for Branch of Free Zone company license from DED Abu Dhabi ,without the requirement of an Emirati National as the LSA(local service agent) and Office space in the Mainland . The free Zone will act as the LSA and the companies office space in the freezone will be the office of the branch.
The Process of Freezone Company Formation
Documents: What are the documents required for a Freezone Company Formation?
List of Document for Freezone Company Formation in UAE
• Passport copy of the Shareholder(s); Director(s); Manager(s).
• Address proof for all the above
• Professional CV of all the above
• Proposed names of the company
• Specimen Signature document for the Shareholder /Director
• Business Plan (based on activity /Freezone)
Costs: What is the price for a freezone company formation in UAE?
The cost will depend on the freezone, number of visa required, type of office selected and other factors; however, for setting up a company in a freezone the cost can start from AED 9000* onwards in UAE.
Freezone Setup Process: How to start your business in a Freezone in UAE
At Business Expert, we guide you and hold your hand through each step of your business journey. Although the process is quite detailed, below is an 8 Step Process highlighting the essential incorporation procedure for your freezone company formation in the UAE with our highly experienced staff.