UAE Free zones are attractive jurisdictions for investors who desire to have full ownership of their business. The idea of a “Free Zone” has been well-known internationally as a model to develop and promote business in many countries. Since UAE Free zones are offering 100% foreign ownership, Zero tax and customs privileges which make the UAE free zones the most favorable locations in the Middle East for international operations and appeals many in Free zone company formation in UAE. There are two types of Free-Zone Corporate entities; Free Zone Establishment (FZE) and Free Zone Company (FZC) An Establishment is a single-shareholder either a person or a company while a Company is a Limited Liability Company and generally requires two or more shareholders. Both offer the same operational benefits. Although depending on the Free Zone, there may also be differences in the share capital requirements like some free zones don’t even require any share capital.
You will be the full owner of a Free Zone company. By having this structure, you can trade internationally and between the free zones, you can import or export the goods without any taxes or duties. However, dealings with mainland (Dubai) will be subject to 5 per cent duty as well as you cannot sell your products within Dubai mainland directly but only through distributor or agent. There are number of developed free zones in Dubai, UAE. Example, Jebel Ali Free zone (JAFZA), Dubai Multi Commodity Centre (DMCC), Ajman Free Zone, Dubai Free Airport Free Zone, etc.
Each Free Zone is set to register companies in their own line of business and each one of them has a different set of requirements, cost and legal structure. Choosing the right jurisdiction depends on short term and long term objective of the firm and cost difference.
For further information, please contact our business consultant.
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