Free zone company registration in the UAE

Free Zone
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Free Zone company is the most common type of company in the UAE, which is chosen by foreign entrepreneurs. The main advantage of free zones is a favourable tax regime, thanks to which a company is exempt from paying income tax. The company registration can usually be carried out completely remotely.
There are more than 40 Free zones in the UAE, which differ in the types of licenses they grant to companies, as well as the cost of fees, terms of opening, conditions on the amount and need to pay share capital, etc. Thus, it is very essential to choose the one which is suitable for a particular business. We recommend to choose it very carefully.

Free zone company features

  • The companies are exempt from paying the 9% income tax, which will be introduced from June 2023. However, they will have to register with the tax authority and file accounts.
  • Most free zones do not require renting an office space to register a company. Renting a shared workplace (the equivalent of a registered office) is possible. In Mainland, however, companies are required to rent a real office in order to register.
  • Free zone companies are only allowed to operate within the free zone, other free zones or abroad. However, a company may enter into B2B contracts with companies from Mainland. By providing services to them, for example.
  • There is a minimum capital requirement to establish a company in a free zone, depending on the emirate to which it belongs. Yet, in a number of free zones, it is possible to simply declare the share capital but not to contribute it.
  • Free zones have their own rules for setting up a company and conducting business. The amount of local regulation to approve a company within their jurisdiction and do not require approval from authorities outside the free zone.
  • The registration of a free zone company is usually done remotely, allowing you to launch your business in a short period of time.
Types of free zones
The UAE government has established more than 40 free zones, each with its own specific characteristics. Free zones can be roughly divided into two types:
A wide range of activities are offered, allowing companies from different sectors and industries to be registered. For example, Meydan Free Zone is such a freezone.
Usually, the focus is on certain types of companies. Dubai Internet City, for example, specialises in companies from the IT and media industries.
Registration procedure
The following documents will be required for company registration:
  • Passports of shareholders, directors, managers;
  • A utility bill with translation into English or other proof of address;
  • Photo on white background of shareholders, directors, managers.
  • A business plan is required for some Freezones.
Some free zones require a larger package of documents or may require additional documents during the registration procedure.

An application must be prepared and submitted along with the necessary documents to start the registration procedure. The registration authority then reserves the company name and proceeds to the securitisation check and KYC of the shareholder and director. The KYC can be completed online through video identification.

Upon review of the documents and KYC, the registration authority will take the final decision and issue a business license together with the company registration certificate and shareholder certificate.

Once the license has been issued, the procedure for obtaining an Emirates ID for the company’s shareholders, director and employees can be initiated. Only once the Emirates ID on the director has been obtained can one proceed to the opening of a bank account.
Registration costs
The cost of registering a company depends on the free zone chosen, the type of license and the planned activities of the company. For example, the cost of the General Trading License is usually three times higher than any other license in the same free zone. Some free zones require the leasing of a real office for certain activities and some free zones require a minimum share capital for the company.

When implementing the structure of an ordinary company with a simple license, one shareholder, no employees and no activities requiring additional permits, the cost of incorporating the company will be from 3000 USD (not including the cost of services).
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