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How to Start a Business in Dubai Free Zone?

December 8, 2016 / 612 / Category : Faqs

Free Zones are special economic zones set up with the objective of offering tax free, and free customs duty benefits to expatriate investors. Free Zones in Dubai and the UAE are governed pursuant to a special framework of rules and regulations applicable to concerned free zone. Free zones in Dubai are managed and operated by free zone authority. For instance, the Jebel Ali Free Zone Authority in Dubai is responsible to manage, operate and supervise the functioning of the Jebel Ali Free Zone, one of the largest sea port free zones in Dubai. A Free Zone Authority offers business licenses to foreign-owned businesses. Each Free Zone is designed around one or more business industry categories and only offers licenses (e.g. for a Free Zone Enterprise (FZE)), to companies within those categories. Most of the free zones in Dubai broadly offer trading, service, industrial, national industrial, and branch licenses to investors looking to set up their businesses.

A company set up in a Free Zone offers benefits to owners:

  1. 100% ownership (A single individual is required for setting up (no sponsor required))
  2. Tax exemption
  3. Owning properties is allowed (25 years lease options, warehouse facilities, availability of areas for production and assembling etc.)
  4. Fair renewal fees
  5. Confidentiality of your business is maintained
  6. Allowed to open bank account in Dubai
  7. No restriction for doing more than one activity
  8. Can wind up at your discretion

There are more than 20 Free Zones operating in Dubai.

  • Dubai Airport Free Zone
  • Dubai Cars and Automotive Zone (DUCAMZ) also known as Dubai Auto Zone
  • Dubai Healthcare City
  • Dubai International Academic City
  • Dubai Internet City
  • Dubai International Financial Centre
  • Dubai Knowledge Village
  • Dubai Media City
  • Dubai Gold and Diamond Park
  • Dubai Multi Commodities Centre (DMCC)
  • Dubai Silicon Oasis (DSO)
  • International Media Production Zone
  • Jebel Ali Free Zone

If you decide to set up a Dubai Free Zone company, then you must already be aware of the appealing general benefits of developing your business there, such as:

  • 100% foreign ownership, which is not possible in mainland Dubai,
  • 100% corporate, import and export, personal tax exemption for a minimum of 15 years, and
  • 100% repatriation of capital and profits.

A free zone company has also some drawbacks such as:

  • necessity to rent office premises within the chosen Free Zone,
  • being unable to conduct business nor engage in business activities with Dubai mainland's clients or suppliers, and
  • high translation and notarization costs. Any such activity will require a local agent which links the company to its mainland Dubai and UAE clients.
There are more than 30 free zones in Dubai. Therefore, when you set up a company in a Dubai free zone, you need to be aware of each free zones benefits and characteristics.For example, if your company will be providing IT services, you should consider the Dubai Media City or Internet City zone, or for a trading company the RAK free zone or DMCC will be equally beneficial.The JAFZA is suitable for a shipping company or when you need access to airports and seaports. Alternatively, Hamriyah FZ in Sharjah will be a cheaper option.You can refer to this webpage for details of five different UAE free zones and the respective company incorporation can also see the differences between the 3 legal entities allowed in the free zones:
  • FZ Establishment, FZ company and the branch office,
  • read about the different Dubai Free Zones, and
  • have a detailed look at the exact incorporation procedure for the Dubai free zone company establishment.
In summary, registering a DFZ company is pretty straight-forward and it usually takes 3 weeks to incorporate. Once you have decided on the preferred free zone, you will need to:
  • reserve the company name,
  • rent office premises,
  • prepare the deeds of establishment and the articles of association,
  • open the corporate bank account and inject the minimum paid-up share capital to receive the bank statement confirmation,
  • allocate budget for the translation and notarization costs of the required due diligence,
  • secure the appropriate business license, granted by the relevant Free Zone Authority.
Dealing with the UAE authorities, especially if you do not know the local language and customs, might be a little tricky, and therefore a local agent is recommended to ensure effective and efficient process.

Here is a step by step process to setting up a company in DMCC dubai free zones :

1: Decide on the company type

Types of companies eligible for a license:Limited liability company as a newly formed entity with single or multiple shareholdersLimited liability company as a wholly owned subsidiary of local or foreign companyBranch of local or foreign company

2: Agree on the business activities according to your business plan

Each company is issued a license depending on their business activity. While the license will be specific to the selected activities, a company can also apply for multiple licenses or for a general trading license. We offer three types of licenses:
  • Trading
  • Service
  • Industrial

3: Consider additional customised licence structures

DMCC also offers other types of structures such as Single Family Office which caters to centralising the management of a familys wealth and personal affairs, succession planning and holding shares in family businesses, assets, trusts and foundations.Additionally, you can avail of an e-commerce license structure which enables you to set up an online platform or a digital marketplace which promotes third parties products and services and facilitates commercial transactions between buyers and sellers in return for a commission or remuneration.

4: Choose a company name

5: Start your application

You can start your application by filling in the Apply Online form and one of their agents will be in touch to take you through the application process.

What it takes to set up a company:

Passport copy (visa page copy, if applicable)Proof of residential address (e.g. utility bill copy)Summary of business plan, if applicableIf applying as a branch or a subsidiary, copies of the parent company documents to be notarised and attestedNo Objection Certificate from sponsor, if holding a valid UAE visaCertain business activities have additional requirements (e.g. third party approvals from regulating authorities) 

Key benefits to set up a UAE Free Zone company:

  • 0% corporate and personal tax
  • 100% business ownership
  • 100% capital repatriation
  • No trade barriers or quotas
  • Simple export & Import conditions
  • New companies, branches, subsidiaries, representative offices, etc.
  • Sole shareholders & corporative are permissible
  • Full range of business activities licensed
  • No restrictions on hiring expatriates
  • Freehold offices for sale or lease
  • Flexi desk/serviced offices
  • Unique industry clustering and purpose-built infrastructure
  • 3 years UAE residence visa
  • many other benefits


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  8. How does a small business go about approaching new manufacturers?
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