Free zones are dedicated areas introduced to attract foreign investment. Each free zone has its own regulations and rules for registration and licensing of companies, which are administered by the specific free zone’s regulatory authority. In general, each free zone appeals to different industries,  startups or investors, and only license specific types of activities.

Within the UAE, there are more than 40 Free Zones for company setup across Dubai, Abu Dhabi, Sharjah, Fujairah, Ajman, Ras al Khaimah and Um Al Qwain. Companies registered in Free Zones are not only exempt from taxes but also from most of the general compulsions applicable under UAE Company Law. This means there is no requirement to take a UAE partner as 51% shareholder of the business. A Foreign Investor may therefore own the company either 100% by himself (sole proprietorship /sole trader), or through other shareholders regardless of their nationality. Branch offices in Free Zones are also not required to appoint a local service agent as prescribed by UAE Company Law, enabling entrepeneurs to realise the simplest corporate structure, when compared to other types of company setup in UAE.

Most of the Regulatory Authorities offer the following benefits:

  • 100% ownership
  • 0% corporate tax
  • 0% income tax
  • 0% custom duty
  • Confidentiality of Business
  • Low Operating Costs
  • Free Capital Transfer
  • 100% repatriation of capital and profits
  • Can wind up at discretion

Type of Licenses Issued by Authorities:

UAE Free Zone companies can only operate within the free zone boundaries and are generally limited to performing solely those activities listed in their license(s). Normally all free zones issue following Licenses:

  • Commercial License
  • Service License
  • General Trading License
  • Industrial License

It is mandatory for every company registered in the Free Zone to lease minimum office space within that particular Free Zone. A  registered company can obtain UAE residence visas for the directors, shareholders and employees of the company.

Given the number of free zones, it is important, therefore, to obtain accurate legal advice before making a decision about which Free Zone would best suit the purposes of the intended business, as this can affect the company operation of banks accounts and residency visas. At Fichte & Co we have vast experience in setting up companies. Our entrenched relationships with most of the UAE based free zone authorities and knowledge of the processes involved in the licensing and registration of new corporate entities enable us to offer our clients advice and assistance when making the decision and application to the chosen Free Zone.

For more information or enquiries, email us at companysetup@fichtelegal.com

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At Fichte & Co, Managing Partner Jasamin Fichte leads a team that is ‘impeccable, in all areas.’ It handles an array of high-value claims for international clients and government entities.

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Free Zone Company Setup was last modified: July 17th, 2018 by Fichte Legal