Dubai has been growing into an indispensable part of the global economy. For this, they have been trying to incorporate many different unique perspectives to make it an ideal business hub and to attract businessmen from all over the world. There is enough flexibility to accommodate various types of businesses, from startups to franchises to branch offices, and so on. There are also two different locations in which the businesses can be set up and they are mainland and free zones. Free zones are a new innovative space that helps businesses to have multiple benefits, starting with tax rebates, and there are also free zones that are composed of specific industries. This gives businesses the opportunity to work with businesses that come from their industry, increasing their growth potential.
In this blog, we are trying to give more information on the cheapest free zones in Dubai and help you choose the best one that suits your business.
What exactly is a free zone in Dubai?
Free zones in Dubai are the premium locations, located all over the city. The free zone locations are near good roadways, airports, and the busiest ports in Dubai. The free zones also allow businesses to have tax rebates for a period extending 15-20 years. The business owners also get to take home 100% of the repatriated profits.
There are many free zones that are in the UAE; some of them are Ras Al Khaimah Free Zone (RAK), Dubai Silicon Oasis Free Zone, Dubai Internet City (DIC), Dubai International Financial Centre (DIFC), Dubai Multi Commodities Centre (DMCC), Dubai Maritime City Free Zone, Metals and Commodities Free Zone, Economic Zones World (EZW), and Dubai Aid City Free Zone.
Best 5 Cheapest Free zones in UAE
1. Meydan Free Zone
Meydan Free Zone is strategically located in the heart of Dubai and near Mohammed Bin Rashid Al Maktoum City, which is close to the logistics corridor of the UAE. It is one of the most cost-effective free zones in the UAE. Meydan provides a different perk to business owners that plan to set up shop in the free zone. It is strategically located for the growth of businesses like startups,
The incentives that Meydan free zone offers to businesses are tax incentives, 100% ownership, no duty tax on export and import, high-speed internet connectivity, etc.
2. Sharjah Publishing City Free Zone (SPCZ)
Sharjah Publishing City Free Zone, or SPCZ, is a subsidiary of the Sharjah Book Authority, established in 2017. This is the first free zone in the world that is curated by a line of business and focused on the global print and publishing industry. With the help of SPCZ, UAE is trying to work well, promote important initiatives and programmes, and use the learned knowledge to enhance the growth of the nation. There are around 1500 business activities that entrepreneurs can choose from. With one SPCZ free zone licence, entrepreneurs can combine up to five activities. The entrepreneurs also get the opportunity to apply for 100 visas under one licence. There is a dual licence and a 10-year trade licence.
3.IFZA
The International Free Zone Authority of Choice, or IFZA, is a free zone authority founded in 2018 in Fujairah, and then it was moved to Dubai. It is one of the most popular trading zones in the Emirates. IFZA allows 100% ownership of commercial enterprises. There are 100% tax exemptions on imports and export. There is no personal income tax. Residency visas are valid for around 3 years, and these visas are available for both shareholders and employees. There are competitive and cost-effective packages for budding entrepreneurs.
4.Ras Al Khaimah Free Zone
Ras Al Khaimah Free Zone, or RAKEZ, is the powerhouse area of business and an industrial hub in the UAE. The free zone is home to multiple kinds of businesses, starting with freelancing, startups, and multinational companies from over 50 different kinds of industries. To this date, there are more than 15000 companies from over 100 countries that have set up business in RAKEZ, Dubai. The Ras Al Khaimah Free Zone offers the following features to businesses that are established there:
- Affordable premium business solutions.
- Seamless and transparent delivery of services.
- Customised packages with smart business solutions.
- Diversification of industries.
5. Sharjah Media City Free Zone
Sharjah Media City Free Zone, or Shams, is a 2 million multi-use city located in Sharjah. The free zone authority brings in state-of-the-art infrastructure and through the setup of Shams, the intention is to bring together different aspects of the media industry under one umbrella. Shams perfects 100% foreign ownership, all the companies have limited liability, 100% repatriation of profits, quick and simple online registration process, Located 15 minutes from Sharjah International Airport and 30 minutes from Dubai International Airport, etc.
The Advantages of Doing Business in UAE Free Zones
Free zones in the UAE give out many benefits to businesses.
- Complete foreign ownership: Free zone businesses in the UAE will get the benefit of 100% foreign ownership for businesses. Foreign investors now no longer have to have a native sponsor to set up and start their own businesses. This is available to anyone who is planning to set up a business in the free zones in the UAE.
- Absence of Currency Restrictions: Currency regulations are the restrictions imposed by governments when it comes to the transaction of foreign currencies. Financial transactions become easier in the UAE-free zones as there are no imposed restrictions on the transfer of foreign currencies.
- Import duty exemption: The business that is set up in the free zones in the UAE has applicable exemptions from import and export duty restrictions. This makes it an ideal choice for businesses that have a lot of international trade.
- Tax Benefits: There are a lot of tax benefits from setting up businesses in the free zones in the UAE.
- Repatriation Benefits: The companies are eligible for 100% repatriation of profits and financial assets.
- Smooth Labour Requirements: Labour recruitment is easier to acquire and cost-effective manner. You can also easily recruit foreign nationals.
- Readily available workspaces: The places for work and warehouses are easily available in free zones in the UAE.
- Ease of incorporation: The procedures related to starting the business in free zones in the UAE is comparatively easy.
Also, Read - Top 10 Benefits of Forming a Freezone Company in UAE
The financial requirements for starting a company in the UAE Free zones
The cost of starting a business in the free zones of the UAE differs depending on the type of business you choose to start and the location where you want to start your business. The procedures and the business licence fee also differ depending on the above two factors.
How to Start a Business in the UAE's Cheapest Free Zone
Setting up your business in the free zones is not difficult and is relatively easier when compared to starting a business on the mainland.
Let us first look at the steps in a nutshell:
- Deciding on the legal entity
- Choosing the company name
- Apply for a business licence
- Choosing a space for work
- Getting necessary approvals, registering a business and getting the licence
1 . Deciding on the legal entity
The decision on the legal entity can help you choose the free zone in that you want to set up the business. There are certain free zones that permit only a particular type of business and its related niches. There are two kinds of businesses that can be opened in free zones: a Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co. ), and a Free Zone Establishment (FZE). The differences between the two companies depend on the number of shareholders and whether the shareholder is a natural or a legal person. Make sure to inquire about the kinds of companies that are allowed in the kind of free zone you choose.
2. Choose a trading name
Choosing a business name has to comply with some terms and conditions put forward by the authorities. The permissibility of the name is the first factor that you need to check. The name that you choose should be available for use and should not be taken by any other existing businesses. The DED will grant approval to names only if:
- The name doesn’t defy the moral standards of the UAE.
- The legal form of the company should permit the name.
- It should be in short form.
- The name also should not contain any similarity to religious names or references.
3. Business Licence
The next step is to apply for a business licence. In order to apply for a business licence, relevant documents should be submitted. Each free zone will have its own specific requirements for documentation.
The general documents required for registration are:
- Completed form of registration
- Board resolution appointing manager or director
- Power of Attorney
- Memorandum of Association
- Articles of Association
- Passport size photographs
- Share capital information
4. Choose an Office Space
The office space can be either rented or leased in free zones. The space will directly depend on the number of employees and the legal structure of the business. Certain free zones also offer rental packages like smart office packages or executive office packages.
5. Get pre-approvals, register your business and get your licence
The authorities in charge of the respective free zones manage the rules and regulations. The list of documents necessary to get approvals differs from free zone to free zone; it depends on the business activity and the requirements. The general documents required for establishing businesses in the free zone are:
Initial Approval
- Completed Application Form
- Business Plan
- If you are an existing business, submit the existing registration documents.
- Coloured passport copies of managers or shareholders
- Specimen signatures of shareholders
- Two-year audited financial statements
- Letter of Intent
- Registry identification deed
Registration
Once the initial approval is obtained, the next step is to submit documents for registration and licencing. Those documents are as follows:
- Application of registration
- Board resolution of appointing managers or shareholders of the company
- Power of Attorney
- MoA
- AoA
- Passport size photo of shareholders or managers
- Share capital information
Licensing and visa process
- Lease agreements are prepared by the authority
- Trade licences are issued
- Visa processing will commence
A synopsis of the entire business setup process in the free zones of the UAE is entailed in this article. The setting up of businesses is made easier by welcoming businessmen of different cultures to come to Dubai and the UAE in general to launch their businesses. The processes can be made even easier with the help of a leading business consultancy like Kiltons Business Setup Consultants. We have professionals who have worked in this field for many years and have defined expertise in order to provide quality advice to our clients. Choose us to have a seamless setup of business in the free zones of the UAE.
Know More