Dubai Free Zone

Dubai’s free zones are considered one of the most prominent economic stimulants in the emirate, as they provide an ideal investment environment that combines advanced infrastructure and effective government facilities. These areas are distinguished locations for national and international companies seeking to establish and expand their businesses in a distinct investment attraction area. The Dubai Free Zone system allows companies to have great flexibility in tax laws and practical legislation, making it an ideal choice for investors looking for a dynamic and innovative business environment in the heart of the Middle East.

This article focuses on reviewing the available investment opportunities, advanced logistics services, and easy administrative procedures that make Dubai’s free zones a preferred destination for establishing companies and expanding business efficiently and at the lowest possible cost.

Dubai Free Zone

What are the free zones available in Dubai?

In Dubai, there are several free zones that provide a business-friendly environment and provide a range of facilities to local and international companies. Among the main free zones in Dubai:

1. Dubai Green Free Zone: Specializes in environmental and sustainable sectors such as renewable energy and environmental technology.
2. Dubai Free Zone: It includes a variety of sectors such as technology, media, light industry, and international trade.
3. Dubai Investment Park Free Zone: specializes in light industries, logistics, and manufacturing.
4. Dubai Smart City Free Zone: Focuses on smart technology and digital innovations.
5. Dubai Aviation City Free Zone: Provides facilities to companies in the aviation, aerospace and related logistics services sector.
6. Dubai Healthcare City Free Zone: specializes in the health and medical sector, including healthcare, medical research, and medical education.

Tax benefits of establishing a company in a Dubai free zone

Establishing a company in a free zone in Dubai provides several important tax benefits that encourage investment and enhance the emirate’s attractiveness as a global economic center. Here are some of the key tax benefits of setting up a company in a free zone in Dubai:

• Not charging income tax: Companies in Dubai free zones are exempt from paying income tax for up to 50 years. This means that companies can keep all of their profits without a tax deduction.
• Not charging corporate tax: Companies located in Dubai’s free zones are often exempt from paying corporate tax for an extended period of time, which increases the company’s profitability and reduces tax costs.
• Not charging value added tax (VAT): To date, value-added tax (VAT) is not charged on goods and services provided in Dubai’s free zones, saving additional costs for businesses.
• Freedom of money transfers: Companies in the free zones in Dubai enjoy complete freedom in financial transactions in foreign currencies and international transfers, without any restrictions governing monetary control.
• No inheritance and gift tax: Companies located in Dubai free zones are often exempt from paying inheritance and gift taxes, which helps maintain continuity and transfer property without additional tax costs.

Approximate costs of setting up a company in Dubai Free Zone

The costs of establishing a company in a free zone in Dubai vary based on the type of company, the scope of its activities, and the legal and administrative requirements. Here is a rough estimate of the costs you may face when setting up a company in a free zone in Dubai:

• Registration and license fees: Registration and license fees vary based on the type of company (sole proprietorship, joint stock company, limited liability company, etc.) and the location of the free zone.

Legal and administrative costs that include processing official papers and documents.

• Office and space costs: There may be costs to rent an office or work space within the free zone, and this depends on the size of the company and the type of activity.
• Additional services fees: These fees may include logistics, administrative support, communications services, security, maintenance, cleaning, financial, and legal services.
• Annual renewal fees: Licenses and registrations are renewed annually, and there may be periodic fees to maintain legal company status.
• Costs of financial and accounting services: The company may need accounting and financial services to prepare financial reports and comply with local tax laws.

The differences between establishing a company in the Dubai Free Zone and outside it

Establishing a company in a free zone in Dubai and outside it can differ in several aspects, including:

1. Foreign ownership: In Dubai free zones such as Jebel Ali or Dubailand, foreign investors are allowed to own one hundred percent of the company without the need for a local partner. While in some areas outside Dubai, incorporation may require a certain percentage of a local partner.
2. Type and activities allowed: Free zones in Dubai and outside Dubai differ in the types of activities that companies can practice. Some free zones focus on light industry or technology, while others focus on financial services or logistics.
3. Legal and administrative requirements: Legal and administrative requirements may differ between free zones in Dubai and outside it, such as procedures required for licenses, permits and tax controls.
4. Infrastructure and Supporting Services: Free zones in Dubai usually have well-developed infrastructure and supporting services such as advanced logistics and communications facilities, making them more attractive to startups and medium-sized companies.
5. Establishment and operating costs: Establishment and operation costs may vary between free zones in Dubai and outside, based on rents, administrative costs, local taxes, and services provided.

Renewing my company’s license in Dubai Free Zone

The process of renewing a company license in a free zone in Dubai requires adherence to specific procedures and payment of some fees. Here’s an overview of how to renew your company license in a free zone in Dubai:

• Timing and Procedures: The company must begin the renewal process before the current license expires. The required renewal period is usually specified in advance, such as 30 days before the license expires.
• Required Documents: Renewing a license usually requires submitting some basic documents such as a copy of the current license, the completed renewal form, and any other legal documents if required.
• Fees and costs: License renewal fees vary based on the type of company and type of activity, and may include periodic administration and management fees.
• Examination and review: After submitting the renewal application, the documents and information submitted are audited to ensure that all legal and administrative conditions are met.
• Duration and approval: After meeting all conditions and paying the required fees, a decision is issued approving the license renewal, and a new license is usually granted for a specific period.
• Compliance and follow-up: Once the renewed license is received, the company must comply with all legal and administrative conditions and regulations specified by the local authorities.

Main economic activities in Dubai Free Zone

In the Dubai Free Zone, economic activities are highly diverse and include several key sectors that attract companies and investors. Among the main economic activities in the Dubai Free Zone we can mention:

• Logistics and distribution: Dubai is a global distribution center, and the Dubai Free Zone provides advanced shipping, warehousing and distribution infrastructure, making it a destination for logistics and distribution companies.
• Technology and innovation: Dubai Free Zone hosts many technology and innovation companies, including startups, high-tech, artificial intelligence and large-scale analytics.
• Light industries and processing: The Dubai Free Zone is characterized by the presence of facilities for light industries and material processing, such as the manufacture of food, beverages, electronic products and metals.
• Financial and banking services: Dubai is a major financial and banking center in the region, and the Dubai Free Zone provides a suitable environment for banks, financial and investment institutions.
• Real estate and infrastructure: Dubai Free Zone is witnessing significant growth in the real estate and infrastructure sector, which includes real estate development, construction and asset management.
• International trade, export and import: Dubai is a major center for global trade, and the Dubai Free Zone allows companies to access international markets and facilitate import and export operations.
• Tourism and Hospitality: Dubai is a global tourist destination, and the Dubai Free Zone hosts many hotels, tourism and entertainment facilities.
• Consulting and professional services: Dubai Free Zone provides an ideal environment for consulting and professional companies in various sectors such as law, accounting and management consulting.

At the conclusion of this article about free zones in Dubai , we find that the free zone is considered an important hub for investment in the emirate, as it provides an ideal environment for startups and large companies alike to achieve their success and growth. It offers a wide range of competitive advantages such as operational freedom, customs facilities, and no taxes on profits, making it an attractive option for international and local investors alike.

It is a hub for innovation and development, attracting companies looking for a business-friendly environment and multiple growth opportunities. In addition, the region plays a vital role in supporting Dubai’s strategy to diversify its economy and strengthen its position as a global business hub.

The most important frequently asked questions about the free zone in Dubai