How Much Does It Cost To Start A UAE Free Zone Business?
The total cost of securing a trade license and setting up a business in the UAE will depend on many factors. Your location, business type, and business size will have an impact. Surrounding states (emirates) such as Ras Al Khaimah, Sharjah, Ajman, Umm Al Quwain and Fujairah are home to free zones offering great value packages and benefiting from a lower cost of doing business than Dubai and Abu Dhabi.
Types of Entities for Freezone Company Formation in UAE
In the UAE, Foreign Investors can choose between incorporating a Freezone Establishment, also known as FZE (There is only be one shareholder which can either be an individual or a company) or a Freezone Company, also known as FZCO, FZC or FZ LLC (A min of 2 a and maximum of 5 Shareholders are required for this type of freezone company formation) or a branch office (parent company is registered outside UAE)
Key limitations & Requirements to consider:
Doing Business In mainland
By law, any economic activity outside of the Freezone, i.e. in mainland is regulated by the Department of Economic Development of that state (emirate). Hence, a freezone is not allowed to commercially trade locally without appointing a mainland distributing agent. Agents will charge their fee, and a customs duty of 5 % will become applicable on imports.
Audited Financial Report
Each Free Zone Company must appoint an independent auditor that is registered and licensed in the UAE. Audited financial statements must be submitted annually as per the requirement of the Freezone. In most Freezone, it’s mandatory to have audited financial report.
All free zones offer unique facilities and services, and it ultimately depends on your personal preference, needs and business activities. Each free zone is created for a particular business sector.
A freezone visa is a residence visa and permit issued by the Immigration department of the emirate. A residence visa allows you to work and live in the UAE. As a business you can apply for from Zero (0) visa options to the visa options the business needs. If you need more visas, you need to have a larger physical office space.
Business bank account opening
Due to recent global increase in compliance standards, banks have become more stringent in opening bank account for Freezone companies. Further, it’s not possible to open any Business Bank account remotely with UAE banks. It’s a requirement of Central Bank that you have to be present physically while opening your Freezone Bank Account.
Close and Liquidate a Freezone Company in the UAE
There are numerous steps specific to freezones. According to the majority of freezone authorities, there are three main types of company closures. It include:
Summary winding up – this is relevant to companies who have no liabilities
Creditors winding up – this is appropriate when a business passes a resolution which is then followed up with a meeting with the company’s creditors
Bankruptcy - this can only be requested through the official courts under UAE Commercial Transactions Law No. 18 of 1993.
Confused where to setup your business In Mainland or In Freezone
Key Questions to ask?
The Location of your customers
The Number of employees required
How fast the business will grow or scale
Reach out to us and one of our Bizvise consultants will guide you.
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