The Pros & Cons Of Setting Up A Free Zone Company in UAE
UAE is home to a number of businesses and provides diverse long-term opportunity for new entrepreneurs looking to setup a business in Dubai or diversify and expand their business in this region. In order to promote 100% ownership among foreign nationals, the UAE government especially Dubai, had brought about the concept of a free zone.
UAE is home to more than 45 different free zones, offering different incentives and specialties for investors. Some of the free zone operate to International regulations.
Free zones have become a major contributor to the UAE’s GDP and foreign investment. There is a huge surge in companies opting to operate out of free zones and many new free zones have been formed in different cities in UAE.
When choosing for free zones one has to be very careful in choosing the right free zone for their business. For Example : Some of the free zone like DIFC, Internet City; the setup cost can be high but in reality the business need not be based out of that particular free zone and the same business could have been setup in some other free zone at a much economical cost. Hence, it is very important for business owners to get the right advise on the structure and setup so they don’t end up with unnecessary overheads.
Certain free zones specialize in a specific industry and they generally make it very user friendly in doing business and understanding the laws. Most free zones have recently removed the deposit of initial startup capital but some like Dubai Multi Commodity Centre (DMCC) and Dubai International Financial Centre (DIFC) still have them.
The company’s registered address will be in the chosen free zone and you won’t be able to rent something under the company name outside the Free zone unless it is a business center.
Free zones also offer packages for the license and office / flexi desk and this can keep the initial expense low if the business does not want to rent a physical space.
Having a free zone license, one will not be able to rent a retail location outside the free zone but having a business in a free zone does not stop the business owner from doing business outside the free zone.
A consultancy or service-based business can be located in the free zone and do business outside the free zone without any restrictions. However, when it comes to certain activities like trading; a free zone business cannot directly sell to the customer. Goods when they arrive in the free zone have to be exported outside the free zone and the business buying these will be importing the goods. Free zone trading companies usually act as distributors and then sell these to the local businesses though a contract in place. Trading between free zones and mainland is very much active and many of them use third party logistics companies to facilitate this process.
All of Dubai free zones must provide end of year audits whereas free zones in other cities like Umm Al Quwain , Ajman are not required to do so.
Liquidating or terminating a free zone company is much easier which your appointed consultant can assist you with.
Another advantage of free zone companies is that residency visas are valid for three years.
If you have any queries relating to setting up a free zone company in Dubai, UAE you may contact +971 521273490 or email at email@example.com