Facts That Every Foreign Investor Should Know Before Opening A Company In The UAE

Registering a company in one of the UAE free zones can be a very profitable decision for a foreign businessman because in this case he can gain complete control over his business in this country using cost-effective solutions. This is especially interesting for those who do not want to risk significant capital, but want to try to work in the UAE.

UAE free zones are specific geographic areas with low or absent taxes and favorable conditions for business development. In addition, you can import, process, produce or modify goods on the territory of the free zone, and customs duties will arise only when goods are delivered to consumers in the UAE outside the free zones.

Quite often, free zones in the UAE are located near major seaports and international airports, which provides important advantages for conducting international trade.

Most interesting facts about UAE free zones

Below we will give you a selection of useful facts about free zones that will help you make the right decision when starting a business in the UAE:

  •        The UAE has more than 50 free zones. Each free zone has its own specific laws and policies designed for specific types of businesses. Some free zones specialize only in certain types of business. For example, the free zone of Dubai Internet City allows businessmen to engage in activities related to the field of IT, software and the Internet. Dubai Design District allows starting business in UAE in fashion and design areas.
  •        The first free zone in the UAE was Jebel Ali Free Zone (or JAFZA) appeared in 1985. Currently, JAFZA is the largest free zone in the whole world, and the port of this zone is also the largest in the world. This port of Jebel Ali is the busiest port in the Middle East, which provides connections to 140 ports around the world.
  •        Free zone companies in the UAE allow the holder to own 100% of the company’s shares. When registering a company outside the free zone, you will have to attract a local citizen of the UAE, who will have to own at least 51% of the company’s shares.
  •        Free zones provide full exemption from personal and corporate income tax.
  •        In the domestic market, goods can be sold through a local distributor, since a free zone company does not have the right to directly sell goods. A free zone company may sell goods only on a wholesale basis. However, there are some exceptions, for example, Dubai Design District free zone, which has retail stores, exhibition halls, beauty salons and restaurants.
  •        In the free zone, you can register not only a new company or subsidiary, but also a branch of an existing foreign or local company. A branch registered in a free zone may have only the same name and the same type of activity as the parent company, if this type of activity is permitted in the free zone.
  •        Sharjah free zone companies as well as other emirates free zone companies owners has the right, as an investor, to obtain a UAE resident visa, which is issued for 2-3 years and then it can be extended again.
  •        The number of visas for investors and for employees of a company depends on the type of object rented by the company. For example, renting a combined workplace allows you to get only a limited number of visas. This amount is different in each free zone. Leasing a physical office usually allows you to get one visa for every 10 square meters of office.
  •        An important advantage of registering a company in a free zone is that in most cases it is not necessary to rent a physical office if a certain type of real estate is not required for the type of activity indicated in the license.
  •     The company’s office should be located inside the free zone in which this company is registered. The owner of a company registered in the UAE free zone can withdraw capital and profits from the country without restrictions.

 

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