FREEZONE COMPANY SETUP

Benefits of Setting up a Freezone Company in Dubai, UAE

A Free Zone Company (FZC) is a limited liability entity and can be incorporated by natural persons or legal entities. A new limited liability company with a single shareholder is incorporated as a Free Zone Establishment (FZE); while a multi-shareholder entity is a Free Zone Company (up to 5 shareholders).

• A branch of a local/foreign company also requires a separate License after incorporation/registration.
• The Financial Year follows the calendar year i.e. January to December, except in the case of the first year of operation which will commence on the Date of Incorporation.
• 100% Foreign company ownership is allowed.
• 100% Import and Export tax exemption.
• 100% Exemption from all commercial levies.
• 100% Repatriation of capital and profits allowed.
• No Corporate Profit Tax and no Personal Income Tax.

Types of Freezone Companies

• Free Zone Establishment (FZE) – Single shareholder
• Free Zone Company ( FZC) – Two or more shareholders
• Branch Company – Branch of a local company or branch of a foreign company

Steps and Procedures to Setup a Freezone Company in Dubai, UAE

Once we decided to incorporate the company in any free zone in UAE, there are certain steps or procedures has to follow. Those steps are mentioned below:

• The client has to decide the legal type of their company like FZE / FZCO / LLC.
• The client has to select the name of their company.
• The client has to select an appropriate free zone for their business according to business viability and feasibility.
• Once the client decided on the free zone, the client must submit the documents as per the Free Zone requirement.
• As the last stage, the Free zone authority has to approve the application and provide the business license to the client.

Deciding the legal type.

As the initial step to form the company the investor has to decide on the legal entity like;

• Free Zone Company (FZC).
• Free Zone Establishment (FZE).
• Limited Liability Company (LLC).

Only a few free zones have the option to form Limited Liability Companies.

Procedure to form a Freezone Company in the UAE

The procedure to form a free zone company in the UAE is mentioned below:

Trade Name Registration

Once the client decided on the legal entity of the company which he wants to form, then he has to register the name of the company which is known as trade name registration. The suggested name should be approved by the UAE free zone authority also. While selecting the name, it should not be related to the name of a country or name of religion or name of any GOVT bodies, etc. The name should not violate any morals of the public.

Application for Business License

Once the UAE free zone authority approved the trade name for the business, then the client can apply for the trade license. The documents required to incorporate the company differ from different free zones. The basic documents required are the passport copy of the shareholder, which should be at least valid for more than six months. Some UAE free zones require detailed business plans and external approval which depends upon the business activity.

Once we submit the application, the UAE free zone authority will provide an application form that the shareholders have to sign and submit back. In some UAE free zones, we can form the company remotely and in other free zones, the physical presence of the shareholders is required.

The UAE free zone authority will approve the application within 10 days and the concerned authority will issue the business license along with a share certificate and memorandum of association.

Once the company is formed the shareholder can apply for the establishment card for the company. An establishment card means the link between the immigration department and the company. Once the establishment card is ready, the client can apply for e – channel registration. Only a few UAE-free zones require e – channel registration. After completing the registration of e – channel, the shareholder can apply for a visa or resident permit for the shareholders or for the staff.

Also, once the shareholder receives the business license, they can open a corporate bank account with any banks in UAE or outside UAE.