The prospective investors must remember that each free zone may offer unique benefits depending on aspects like locations, facilities, industry etc.
The concept of free zones has become exceptionally effective in attracting large amounts of foreign investments. In addition to that, free zones are responsible in drawing technological expertise, growth of transshipment and reexports in the region. Because of the success of this concept, all the emirates took necessary steps to implement free zones. Nowadays, these free zones generate considerable number of employments, attract inward investment and help achieving substantial economic development eventually.
Here are some of the benefits companies can experience by operating from free zones.
- They are free from taxes (corporate and personal)
- They don’t have any restrictions in repatriating capital and profits
- Very reasonable import duties on all the goods (excluding tobacco and spirits)
- Fullest freedom for exchanges
- Plenty of energy at very low rates
- Most importantly, they grant complete ownership of the companies without any restrictions
Moreover, the prospective investors must remember that each free zone may offer unique benefits depending on aspects like locations, facilities, industry etc.
What sort of business entities you can establish in these free zones?
In general, 3 types of business entities are allowed within the free trade zones.
- A branch of a company (both foreign or local companies are permitted)
- FZE (Free Zone Establishment) that has a single shareholder
- FZE (Free Zone Establishment) that has multiple shareholders (from 2 to 5 shareholders)
Reasons to setup a business in free zones
There are plenty of reasons for a foreign entrepreneur to setup a business in free zones. However, the main reason is the freedom they offer in terms of ownership;
If you are a foreigner, and you set up a company outside the free zones, your ownership of the company will be limited to 49%. However, if you set up a company inside a free zone, you are eligible for 100% ownership.
In addition to that, following reasons may encourage entrepreneurs to set up business in free zones.
- Plethora of options in terms of business licenses
- Permission to operate under high level of confidentiality
- Ability to have a registered office within the zone
- Can operate under a bank account opened outside the UAE
Setting up a company in free trade zone in the UAE can take up to one week. In addition to that, it will take about 3 weeks for a foreigner to get residence visa. However, all these things can be done seamlessly if you get the assistance of an experienced business formation agent. If not, the process can be pretty harder for a foreign citizen and obviously it might take longer than you expect.