Commercial license in Dubai Free Zone

The systems and regulations related to a business license in the Dubai Free Zone are an essential part of the innovative business infrastructure that encourages investment and enhances the local business climate. Dubai’s free zones provide an ideal environment for small, medium and large companies alike to grow and expand in a variety of economic sectors.

Obtaining a business license in the free zones in Dubai represents a vital step for investors, as these licenses provide great flexibility and attractive benefits that include tax exemptions, full ownership by foreigners, and facilitated export and import operations. In addition, free zones provide advanced infrastructure, excellent logistics services, and effective government support, which contributes to reducing operational costs and enhancing opportunities for growth and innovation.

This article aims to review the simplified process of obtaining a business license in the Dubai Free Zone, in addition to highlighting the competitive advantages that make Dubai one of the most prominent investment destinations in the world. The necessary steps, requirements, and costs will be analysed, in addition to a review of business activities that can greatly benefit from the advanced infrastructure and government support available in these distinguished free zones in Dubai.

Commercial license in Dubai Free Zone

Steps to obtain a commercial license in the Dubai Free Zone

To obtain a business license in a free zone in Dubai, you usually follow the following steps:

1. Choosing a free zone: Choose the appropriate free zone for your business, such as Dubai World Trade, Dubai Production, or any of the other available zones.
2. Determine the type of company: Choose the appropriate company type, such as a limited liability company (LLC), sole proprietorship, or joint stock company.
3. Submitting an application: Submit an application for a commercial license to the chosen free zone authority. This includes providing information about the company’s proposed activity and business plan.
4. Submitting the required documents: Providing personal documents for the founders, such as passports, personal photos, and sometimes certificates of qualifications and experience.
5. Securing approvals from relevant authorities: You may need to obtain approvals from relevant authorities such as the General Authority for Health, Safety and Environment, and financial authorities.
6. Signing the contract and paying the fees: Once the application is approved, the final contract must be signed and the required fees paid to complete the company registration process.
7. Issuance of a commercial license: After all conditions and financial payments are met, a commercial license will be issued that allows the company to start its activity in the free zone.

Advantages of obtaining a commercial license in the Dubai Free Zone

Obtaining a commercial license in Dubai has many advantages that make it a popular option for investors and companies. Here are some key positives:

• Tax exemptions: Free zones in Dubai provide full or partial tax exemptions on income and profit, which contributes to reducing operational costs and increasing profits for companies.
• Customs facilities: Free zones in Dubai give companies easy access to global markets, through customs facilities that include exemption from duties and taxes on the import and export of goods and raw materials.
• Full foreign ownership: Dubai free zones allow 100% foreign ownership of companies without the need for a local partner, which increases operating flexibility and stimulates foreign direct investment.
• Advanced infrastructure: Dubai’s free zones have a modern and advanced infrastructure, including transportation, communications and logistics facilities, which effectively supports commercial activities and increases the efficiency of operations.
• Simple administrative procedures: Investors in free zones enjoy easy and quick administrative procedures, thanks to direct government support, which helps speed up the establishment and operation processes.
• Strategic Center: Dubai is located on the Arabian Gulf front, making it a strategic center for trade and investment in the Middle East, with easy access to regional and international markets.

Types of companies in free zones

In Dubai’s free zones, several types of companies can be established, and these are some of the main types:

Sole Establishment:

• Operated and owned by only one person.
• The owner is personally responsible for all debts and obligations.
• Suitable for small and medium businesses.

Limited Liability Company – LLC:

• It is formed between at least two partners, and the ownership percentage of each partner can reach 49%.
• Partners are not personally liable for losses in excess of their share of capital.

Joint Stock Company:

• It is suitable for larger projects that require a larger number of contributors.
• It is divided into shares that can be bought and sold in the open market.

Company in the Free Zone:

• It allows foreigners to own 100% of the capital without the need for a local partner.
• It enjoys tax exemptions and customs facilities.

Individual company in the free zone (Free Zone Establishment):

• Like an individual company but within the framework of a free zone, which gives investors additional flexibility in commercial activity and investment.

Costs of obtaining a commercial license in the Dubai Free Zone

The costs of obtaining a business license in a free zone in Dubai vary based on several factors, including:

1. Registration and establishment fees: These fees include company registration and establishment fees in the chosen free zone.
2. Annual renewal fees: Every company in the free zone pays an annual fee to maintain the business license.
3. Additional service fees: Some free zones may require additional fees for services such as maintenance, security, and other logistics.
4. Special Permit Fees: In some cases, there may be fees for additional permits to engage in certain special activities.
5. Additional costs: include rental costs, labor costs, and social and health insurance for employees.
6. Legal and consulting fees: You may need to pay fees to legal advisors or accountants to assist with the set-up and operating processes.

Important papers to obtain a commercial license in the free zone

To obtain a business license in a free zone in Dubai, you usually need to submit a set of basic papers and documents. Important documents usually include:

• Registration Application Form: The registration application form must be filled out and submitted with full details of the company’s activity and founders’ information.
• Copy of passport: A copy of the passport for both the founders and shareholders of the company.
• Recent personal photos: Recent personal photos of both founders and shareholders.
• Business Plan: A detailed business plan must be submitted that explains the company’s proposed activity, profit and loss projections, and marketing strategy.
• Bank Reference Letter: A bank certificate proving the financial ability of the company to start work and operate.
• Qualification Certificates: If the professional activity requires special qualifications (such as medicine or engineering), it may require professional qualifications certificates.
• Tenancy Contract: A copy of the lease or proof of ownership of the office or space that the company will use.
• Technical or Environmental Reports: In the case of industrial activities or those that may affect the environment, special technical or environmental reports may be required.
• Approvals from competent authorities: Some activities may require special approvals from relevant government agencies such as Health, Safety and Environment.

In conclusion of this article, we can conclude that obtaining a business license in the Dubai Free Zone is a crucial step for business success in this dynamic market. Although the cost of obtaining a license is affected by several factors, investing in a business license in this region is considered a sustainable and worthwhile investment.

Renewing a business license is vital to ensure business continuity and compliance with laws and legislation. Investors must be prepared to devote some resources and time to the renovation process and meet the necessary requirements.

There are always costs involved in maintaining and renewing a business license, such as annual renewal fees, inspection fees, and required documents. Therefore, it is essential for investors to have a clear forecast of potential costs and ensure the necessary financial resources are allocated.

The most important frequently asked questions about a commercial license in the Dubai Free Zone