The economy of the United Arab Emirates is flourishing due to several economic sectors, especially the free zones. The UAE established free zones in the 1980s to encourage foreign investment.
Free zones are especially popular with entrepreneurs and business owners looking to enter the Middle East market. There are several advantages to choosing a free zone, including 100% foreign corporate ownership, zero income and corporate tax rates, and complete exemption from import and export taxes.
But not all free zones are the same. While each has its own unique advantages, the costs involved vary due to different fees for licences, facilities, and support services. In this article, we put together a pricing comparison table for the most popular free zones in the UAE. We also cover the following topics:
• What does a free zone in the UAE mean?
• How many free zones are there in the UAE?
• What is the cheapest free zone in the UAE?
• Steps to start a company in a UAE free zone
• Working with Creative Zone
What does a free zone in the UAE mean?
Before the Foreign Direct Investment Law came into effect in late 2018, there was a government requirement that a UAE citizen owned at least 51% of a company’s shares. At the time, this law discouraged many international companies who wanted complete authority over their operations in establishing themselves in the country. To overcome this impediment, the government created free zones.
A free zone is a designated region inside the United Arab Emirates dedicated to a particular sector, such as the oil and gas industry. They were created to facilitate strategic change in critical areas such as finance and banking. Many of them were established with public funding and boast state-of-the-art facilities.
Each free zone has its unique set of requirements regarding permissible activities, office or warehouse space, and minimum capital needs, with each holding the necessary licences and regulations to allow its designated sector to thrive.
How many free zones are there in the UAE?
Since the 1980s, when the UAE’s first free zone opened, they have grown in size and scope. There are now close to 50 free zones in the UAE.
As a consequence, the United Arab Emirates has become an ideal destination for both emerging entrepreneurs and big corporations. The one that is right for you will depend on where you want to be and your industry, budget, required facilities, and business activities.
What is the cheapest free zone in the UAE?
The cheapest free zone in the UAE is SPC Free Zone. It costs AED 5750 and consists of the business licence, the Memorandum of Association (MOA), the Share Certificate, the Certificate of Formation, and the Business Activity Certificate. It provides for up to seven shareholders and five commercial activities. However, factors like the type of business, number of employee visas, and the cost of leasing office space will raise the final amount.
A Creative Zone company setup manager can help if you are unsure which licence is suitable for your project. They will walk you through the ins and outs of starting a company, including all the criteria and costs.
Steps to start a company in a UAE free zone
Starting a business in the UAE free zones is effortless. Our qualified and expert professionals will handle all government-related work, ensuring a smooth setup. However, for this article, we have simplified the process into seven simple steps:
Step 1: Select a business activity
The first step in starting a company and acquiring a licence is deciding what you will do. You can select from over 2,000 industrial, commercial, professional, and tourism-related business activities. The Department of Economic Development (DED) has a complete list of all of them. Alternatively, Creative Zone can assist you in selecting the appropriate form of business activity for your new company.
Step 2: Choose a name
Your business must have a trading name, which is required by law. In most cases, the name of a business should represent what it provides unless it is a subsidiary of another. The United Arab Emirates has stringent name regulations as well. It is illegal to use words or phrases that are offensive to any religion.
Step 3: Select a location
Choose a free zone based on what you need and what kind of business you have. When selecting a location for your company, you must consider its proximity to clients and its suitability for your industry.
Step 4: Documentation submission to the DED
You will need to submit all your documentation to the DED for approval after you have settled on a name, activity, and location. The creation of a company and the acquisition of necessary licences happen simultaneously. Depending on the type of company and what it offers, you must get the required approvals from the DED.
Step 5: Obtain licenses
Once the proper authorities have authorised your company activity, you may get the Memorandum of Association, the Certificate of Incorporation, and other legal documentation. After approval, you may also get visas, lease agreements, and labour cards.
Step 6: Process your visa
Along with your visa application, you may also apply for visas for your family and staff, if any. When everything is in order, there are four steps to the procedure:
• Getting an entry permit
• Changing your status
• Taking a medical exam
• Getting an Emirates ID and a visa stamp
Step 7: Setting up a UAE bank account
You should open a bank account as soon as you get your licence. You can not start operations in the UAE without a business bank account.
Working with Creative Zone
Creative Zone is the UAE’s oldest and most trusted business setup expert. Since 2010, we have helped over 44,000 entrepreneurs successfully establish their businesses.
We specialise in delivering solutions that best fit your needs when starting a business by providing quick, dependable, hassle-free, and experienced assistance.
Assisting with your business setup in Dubai is only the start. We also provide various services, including tax preparation, legal advice, and HR management.
When you become our client, you get access to our community of fellow entrepreneurs. You can interact and network with the region’s larger business community through CZ Connect, our networking tool.
Take advantage of our FREE consultations today and get solutions to help with your free zone or mainland company formation in Dubai.
Prices offered by free zones are subject to change without notice. Please get in touch with Creative Zone for an updated price based on the current promotions and availability.