Are you planning to set up a company/business in the free zone area in UAE? Do you need to know the tax exemptions and benefits of forming a company in a free zone in the UAE? We are here to provide you with the answer
A free zone, alternatively referred to as a free trade zone or a free zone authority, is an economic region subject to distinct regulations that exclusively pertain to businesses operating within its boundaries. They are ruled by their specific regulations that do not apply to businesses outside the zone. It also facilitates reduced tax and customs rates for trading goods and services. One of the initiatives the government took to diversify the economy and attract more foreign investors to the UAE was establishing free trade zones. The Jebel Ali Free Zone, founded in 1985, was the first in UAE, and today, there are more than 40 free zones situated in various regions, each tailored to specific industries and providing specialized assistance. There are 28 Free Zones in Dubai, which include Dubai Airport Freezone, Dubai Media City, Dubai Internet City, Dubai Knowledge Park, Dubai Techno Park, etc. Among them the cheapest free zone in Dubai is IFZA( International Free Zone Authority) with a cost of AED 11,900, providing a cost-effective company license without visas.
UAE, a top global business destination, provides various options for setting up a company in the mainland, free zone, and offshore. UAE Freezones are not only globally popular but also known for their ease of business setup, making them favorable for foreign investors compared to mainland Free Trade qZones with lower taxes and fewer restrictions. Specific business operations like trading, e-commerce, consulting, media, logistics, technology, manufacturing, and other specialized sectors qualify for establishing a company within the free zones of the UAE.Accruon Consultant LLC, established tax consultants in UAE, can guide you with the business process.
Benefits of a free trade zone in UAE:
1. Tax exemptions in free zones enhance the overall profitability of the businesses in these zones.
2. 100% foreign ownership in free zones provides entrepreneurs with the autonomy to own and manage businesses independently
3. 100% repatriation
4. Easy access to regional and global markets.
5. Simple and quick registration procedures.
6. To attract international businesses.
7. Foster economic growth and diversification.
8. UAE has become a popular choice for entrepreneurs and corporations aiming to expand their regional operations.
9. Flexibility and simplified procedures.
10.There are no restrictions on moving funds out of the UAE.
11. Financial audit is not required in most free zones.
12. No personal presence for setup or renewal.
A quick guide to start a business in Free Zones:
Check your chosen zone’s specific requirements and timelines before starting, since every free zone has different procedures. So the steps include the following:
1. Process of company formation- Establishing a company in the free zones includes various stages like picking a business activity, selecting a company name, obtaining approvals, and acquiring a business licence.
2. Business setup cost- The expenses associated with establishing a business in free zones fluctuate based on factors like business type, office space needs, and additional operational costs. Entrepreneurs must meticulously assess these setup expenses to effectively manage resource allocation.
3. Business License- Securing a business licence within free zones grants entrepreneurs legal permission to operate within the specified area. Additionally, this license allows businesses to access the incentives and advantages provided by the authorities of the free zone.
4. Business needs- Free zones provide customized solutions to address business requirements, including access to top-notch infrastructure, streamlined immigration processes, and exemption from customs duties. These advantages foster an environment that nurtures business development and expansion.
Conclusion
In summary, choosing a free zone for business setup comes with numerous advantages such as tax benefits, complete foreign ownership, simplified company formation, modern infrastructure, global market access, and free from currency restrictions. Entrepreneurs aiming for success in an international setting should weigh the benefits of free zones. The business- friendly policies and strategic location make free zones an excellent choice for ambitious entrepreneurs aspiring for global success
As one of the top-notch tax consultants in UAE, Accruon guides you in every step of the way. It starts from registering your business and providing clarity on free zone license costs, to obtaining necessary approvals from authorities. We simplify the complex for you and help you to focus on growing your business