Establishing a company in the free zone in Dubai

Dubai is one of the most prominent global cities that attracts entrepreneurs and investors from all over the world, thanks to its dynamic economic environment and flexible investment policies. Dubai free zones are among the most attractive destinations for startups and ambitious investors seeking to establish a company in the Dubai free zone in a favorable and prosperous environment. These areas offer many unique advantages such as tax exemptions, full ownership by foreigners, and advanced infrastructure that facilitate establishment and growth.

Establishing a company in the Dubai Free Zone opens wide doors of business opportunities, as companies can benefit from customs and logistical facilities, and easy access to regional and global markets. Free zones such as Jebel Ali, Dubai International Financial Center and Dubai Internet City are vibrant hubs that host a variety of industries from technology and innovation to trade and logistics.

Dubai is an ideal environment for businesses thanks to its political and economic stability, flexible legal systems, and strategic location linking East and West. Establishing a company in a free zone allows investors to enjoy full ownership of the business without the need for a local partner, in addition to exemption from corporate and personal income taxes, which increases the attractiveness of these areas for foreign investments.

In this article, we will discuss the basic steps for establishing a company in the free zone in Dubai, starting with choosing the appropriate free zone, through registration procedures and obtaining the necessary licenses, all the way to practical advice to ensure the success of your business project. We will provide you with a comprehensive guide that highlights all the aspects you need to know to start your investment journey in one of the most prosperous and diverse trading environments in the world.

Establishing a company in the free zone in Dubai

What is a free zone?

The meaning and definition of the word free zone varies depending on the type of free zone, but in most cases the word free zone expresses a geographical area in which goods are preserved, stored, manufactured, traded and re-exported according to a known and specific customs system, but it is not subject to any customs duties.

The term free zones is also considered to be entities completely separate from the laws of the state, as they are not governed by the trade laws of the country and do not require a sponsor. Likewise, the company that is established in the free zone can be owned by a person of another nationality without the need for a partner who is a citizen of the Emirates.

The free zones in Dubai and in the Emirates in general are not subject to the general laws set by the Ministry of Economy to regulate the commercial activities of companies, as this free zone in Dubai works to provide ownership freedom for businesses, in addition to tax exemption and exemption from any customs duties. These advantages in the free zones make them An ideal and honorable face for international companies that carry out many commercial activities. It is also an advantage that opening and establishing a company in Dubai and in the free zone does not require the presence of a partner or sponsor who is a citizen of the Emirates.

Steps to establish a company in the free zone in Dubai

Establishing a company in the Dubai Free Zone requires following a set of organized steps. Here are the basic steps for establishing a company in one of the free zones in Dubai:

1. Choosing the appropriate free zone: You must choose the free zone that suits your type of business activity. Dubai contains many free zones such as Jebel Ali (JAFZA), Dubai Media City, Dubai Internet City, Dubai Multi Commodities Center (DMCC), and others.
2. Choose the type of company: Select the type of company you wish to establish, such as a free zone limited liability company (FZ-LLC), a subsidiary, or a representative office.
3. Determine the commercial activity: Determine the commercial activity that the company will undertake, as you need to obtain the appropriate license for this activity from the free zone authority.
4. Trade name reservation: Choose a trade name for the company, ensure its availability, and reserve it with the free zone authority.
5. Submitting an application for incorporation: Submit an application for incorporation of the company to the free zone authority, attached with the required documents such as passports and personal photos of shareholders and managers.
6. Submitting a business plan: Some free zones may request the submission of a business plan that includes details of the business project, goals, and financial plans.
7. Issuance of approvals and licenses: After reviewing the applications, the necessary approvals and licenses will be issued by the free zone authority. This may take a few weeks.
8. Signing lease contracts: After obtaining approval, sign lease contracts for the office or warehouse within the free zone.
9. Opening a bank account: Open a bank account for the company in one of the approved banks in Dubai. You will need to provide legal documents for the company.
10. Obtaining residence visas: Apply for residence visas for employees and managers if necessary. Free zones provide easy services for obtaining visas.
11. Starting Business Operations: Once you complete all the steps and obtain all licenses and permits, you can start your business operations.

Costs of establishing a company in Dubai

The costs of establishing a company in Dubai are mainly limited to several expenses, which are as follows:

• Cost of commercial license expenses (license to practice business)
• The price of purchasing the office location or the company through which you conduct your business, whether renting or purchasing.
• The price of purchasing furniture and decor for the office in which you conduct your business.
• The price for obtaining work permits for sponsored employees and the required visas for them under the name of your current company.
• The price of opening a new account in the name of the company in a bank and depositing the minimum capital according to the type of business activity.
• The amount of the cost of the company’s legal form plays a fundamental role in the increase or decrease in the cost of establishment. The costs of establishing industrial companies are higher than the cost of establishing commercial and professional companies in Dubai.
• Finally, the price of the commercial license.

Documents required to establish a company in the free zone

Establishing a company in the Dubai Free Zone requires submitting a set of documents to meet legal and administrative requirements. The required documents may vary slightly between free zones, but there is a basic set of documents that you usually need, which include:

1. Establishment Application Form: An official application form submitted to the chosen free zone authority.
2. Business Plan: A business plan must be submitted that outlines the business objectives, strategies, and services or products that the company will provide.
3. Passport copies: Valid copies of passports of all founders, shareholders and directors.
4. Personal photographs: Passport size photographs of all founders and directors.
5. Proof of Address: Documents proving the founders’ residential addresses, such as utility bills or lease contracts.
6. Commercial Registration: If the company is a branch of another company, the commercial registration and articles of association of the parent company must be submitted.
7. Board of Directors Decisions: The Board of Directors’ decision to establish the new company and appoint directors and legal representatives.
8. Capital Details: Proof of depositing the required capital into an approved bank account, if required by the free zone.
9. Articles of Association and Bylaws: Official documents that define the company’s structure, internal rules, and obligations of shareholders and directors.
10. Lease Contract: A lease contract for the office location or commercial space within the free zone.
11. Registration fees: Proof of payment of registration and license fees.

In conclusion, establishing a company in the Dubai Free Zone represents an amazing strategic opportunity that allows investors to benefit from a flexible and supportive economic environment. The attractiveness of Dubai’s free zones lies in the multiple facilities they offer to investors, from tax and customs exemptions to easy establishment procedures and advanced infrastructure.

One of the most prominent advantages that make Dubai’s free zones a preferred destination is their ability to attract both international and local companies, thanks to the investment environment that encourages growth and innovation. By offering tax incentives and providing a flexible regulatory environment, these zones allow companies to focus on expanding their business without worrying about additional costs or bureaucratic restrictions.

Although setting up a company in the Dubai Free Zone may require careful study and preparation, the potential results are worth the effort. It is important for investors to understand the local market and economic sectors that suit their investment objectives. It is also advisable to obtain legal and financial advice to ensure full compliance with legal and regulatory requirements.

Dubai’s free zones contribute significantly to advancing the national economy by attracting foreign direct investments and promoting exports. In addition, these regions provide opportunities for SMEs to grow and thrive in an international business environment.

The most important frequently asked questions about establishing a company in the free zone