5 Best Free Zones in the UAE & What Steps are Involved in Registering a Company in Dubai?

What is a Free Zone?

Dubai free zones are distinct geographical areas separate from the Dubai mainland. They are not
only distinguished by their jurisdiction but also operate under specific regulations unique to each
zone. We will be discussing about the 5 best free zones in the UAE.

Establishing a company in a Dubai free zone is advantageous for conducting business outside of the
country. While it may offer a cost-effective option, it comes with various constraints regarding
where, when, and how business activities are conducted and regulated.

Difference between FZE and FZCO:

When registering a company in Dubai free zones, it’s essential to differentiate between a Free Zone
Establishment (FZE) and a Free Zone Company (FZCO).

A Free Zone Establishment typically has a single shareholder, whereas a Free Zone Company
functions similarly to a limited liability company, requiring two or more shareholders. Although both
share similar operational procedures, the primary distinction lies in the share capital requirements

Advantages of company formation in Dubai Free Zone

Opting for company formation in a Dubai free zone offers several advantages:

100% foreign ownership.
Limited taxation on personal income and capital gains for free zone companies.
Zero corporate taxes and 0% import/export duties.
The ability to repatriate 100% of capital and profits.
Liberal labour laws and a straightforward recruitment process.

Disadvantages of company formation in Dubai Free Zone

However, there are some limitations and disadvantages to consider:

Restrictions on conducting business in Dubai or within the country
Some free zones may require a fixed investment.
Inability to conduct business in Dubai Mainland.
Limited office space options within the designated free zone.
Inability to establish branch offices; a new company must be registered separately from the parent company.

Choose precisely while registering a company in Dubai Free zones:

Selecting the right free zone for your business is crucial. Dubai’s free zones offer a variety of options
in terms of jurisdiction, legal structure, and establishment processes. Therefore, it’s important to
gather all the necessary information specific to your business needs before making a decision.
It’s worth noting that there are industry-specific free zones in Dubai, allowing you to choose the
region that best suits your commercial requirements.

Step by step process of company formation in Dubai Free Zone:

Setting up a business in a free zone is a relatively straightforward process, characterized by minimal
paperwork and a short duration. Here are the key steps for free zone company formation in Dubai:

Define your business activities.
Select a suitable free zone.
Choose a unique company name.
Submit your license application.
Apply for visas as needed.
Open a corporate bank account for your company.

1. Choose a business activity (or activities)

The initial step to kickstart your Dubai free zone business involves making a decision regarding the
specific business activities you intend to engage in. This choice will have a direct impact on where
you can register your company. The type of license you ultimately apply for will also be contingent
on the specific activities you wish to undertake. These activities can encompass professional
services, e-commerce, commercial operations, trading, and more.

2. Select a suitable free zone.

After you have settled on the nature of the business you intend to launch, the subsequent step
involves identifying the most suitable free zone for your venture. The United Arab Emirates offers
numerous exceptional free zones, making it necessary to carefully review the options and select the
location where you envision your business thriving.

3. Choose a unique company name

Selecting a business name is a challenging task, regardless of the global location you choose for your
enterprise. This process involves not only choosing the company’s name but also defining the nature
of its operations.

4. Submit your license application

To obtain your trading license in the UAE, you must complete the application form and furnish a
variety of required documents and paperwork. Once the relevant authorities have granted approval
for your company’s activities, you can obtain essential legal documents such as the Memorandum of
Association, Certificate of Incorporation, Trade license, Share certificates, Visas, Tenancy agreement,
Labour cards, and more.

5. Apply for visas as needed

At this juncture, you can initiate the visa application process. This involves applying for your UAE
residence visa, as well as those for your employees.

6. Open a corporate bank account

Once you’ve successfully processed all the essential documentation for registering your company in
Dubai from India, the next step is to establish a business bank account for your company. It’s vital to
select a bank that aligns with your company’s requirements and offers perks and substantial
advantages that contribute to cost optimization for your business.

Types of Trade Licenses in UAE

In the UAE, there are different types of licenses for businesses:

Commercial License: These licenses are designated for companies engaged in the trade of
goods and commodities. This includes businesses involved in activities like import and
export, as well as related services such as car rental or real estate.
Industrial License: The industrial license is tailored for companies that intend to participate
in manufacturing activities within the UAE
Professional License: Professional licenses in the UAE are designed for individuals or entities
practicing specific professions. These may encompass artisanal craftsmanship, consultancy,
IT and technical services, medical services, security, printing and publishing, and various
other professional services.

Mainland license in Dubai

A mainland license in Dubai, or in any other location worldwide, serves as an essential document that legitimizes your company as a recognized legal entity. In Dubai, a mainland trade license is granted to businesses to monitor their operations and ensure that business activities are conducted in a secure and accountable manner. The process of registering a company in Dubai encompasses multiple stages, with obtaining a trade license standing out as the most pivotal step

Step by step process of company formation in Dubai Mainland

Step 1 – Choose Your Business Activity

First, select the business activity you intend to pursue in Dubai or any other Emirate. It’s important
to assess the feasibility of the chosen business activity within the region.

Step 2 – Opt for a Local UAE Sponsor or Partner
One of the most critical aspects of obtaining a business license in Dubai is finding a suitable local UAE
sponsor or partner. This choice is pivotal, as selecting the right sponsor is essential for smooth
business operations and regulatory compliance.
Step 3 – Determine Your Legal Form or Structure
Every formation in Dubai or anywhere in the UAE must adhere to a specific legal form or
structure prescribed by the Dubai Economic Department.
Step 4 – Reserve Your Trade Name
Choose a distinctive name for your company, which will serve as its unique identity. You must also
reserve the trade name following the procedures set by the Dubai Economic Department.
Step 5 – Apply for Initial Approval
Once you have your initial paperwork in order, apply for Initial Approval from the Dubai Economic
Department. This approval allows you to initiate your business in Dubai and concurrently apply for
other required certifications as stipulated by the DET.
Step 6 – Obtain External Approvals
Certain businesses may necessitate approvals from the Dubai municipality, ministries, and other
legal bodies. Obtaining these external approvals is crucial and must be completed to secure your
company’s license.
Step 7 – Assemble Necessary Paperwork and Documentation
Additional paperwork and documentation requirements vary depending on the nature of the
business. Different business types may require specific documents depending on their location and
formation preferences.
Step 8 – Secure Office Space
For those planning to establish a new business, having office space in Dubai is often mandatory.
While options like Flexi Desks are available, not every business type can rely solely on desk space
and may need to rent an office in Dubai
Step 9 – Obtain Ejari for Office/Commercial Space
“Ejari,” which means “My Rent” in Arabic, is a regulatory initiative supported by RERA to oversee the
leasing and renting sector in Dubai. Dubai formations must provide their Ejari documents to the
DET in order to obtain their business license from the Dubai Economic Department.

Step 10 – Fulfill the Required Payments
The Dubai Economic Department and other administrative authorities involved in the process levy
fees for licensing your company in Dubai.
Step 11 – Obtain Your Business License in Dubai
Finally, acquire your business license in Dubai through an easy, accessible, and hassle-free process

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WE HELP YOU IN STEP BY STEP BUSINESS SETUP PROCESS

Enjoy 100% foreign ownership in UAE!

WORKING WITH GOVERNMENT AGENCY

for a Better Future

Our association with ministers and government entities throughout the UAE enables us to secure swift government approvals for our clients. Our consultants collaborate closely with the Department of Economic Development and various other governmental bodies in the UAE to facilitate seamless and prompt company formation.

Benefits

setting up of businesses in UAE

Tax Advantages
Foreign Ownership
World-Class Infrastructure
Efficient Regulations
Global Trade and Connectivity
Strong Legal Framework
Strategic Free Zones
Residency Options
Diverse Business Opportunities

Why AB Capital?