February 13, 2016

Free Zone

Free zones are specific areas often called as free economic zone, duty free zone, tax free zone, trade free zone or free trade zone. Free zones are specific areas within the UAE and were introduced to attract foreign investment. Each free zone is administered and governed by their own regulatory authorities with their own rules and regulations. The licensing authority within each free zone is responsible for issuing free zone licenses and registering new companies. Typically free zones are industry focused and are tailored to specific industries and therefore, only license specific types of activities.

As an alternative to setting up company in mainland/onshore, it is also possible to establish an LLC or branch in one of the many free zones across Dubai and the UAE. Currently UAE has over 42 Free Zones providing attractive business setup options.

Some of the most popular Free Zones are:

  • DIFC – Dubai International Financial Centre. • JAFZ – Jebel Ali Free Zone
  • DMCC – Dubai Multi Commodities Centre • DAFZ – Dubai Airport Free Zone.
  • DCC – Dubai Creative Clusters, otherwise known as TECOM and which includes Dubai Internet City, Dubai Media City etc.
  • SAIF Zone – Sharjah Airport Free Zone
  • Umm Al Quwain Free Zone
  • KIZAD – Khalifa Industrial Zone Abu Dhabi • Masdar City

Different types of License / Permits  :

  • Trading :  involves import & export of limited number of products
  • General Trading : involves import & export of Unlimited amount of products (except the restricted items)
  • Industrial :  involves Manufacturing , Repacking, Assembling
  • Media : involves media related activity like studio, AV, production, event management.
  • Service / Consulting : involves specialised activity in advisory, consulting roles, IT sector.
  • Freelance Permits : it is for individuals who operate in technology, media and film sectors, and is issued to talent roles, creative roles and selected administrative roles

Major benefits include :

  • 100% ownership.
  • No tax on corporate gains or personal incomes.
  • 100% repatriation of capital and profits.
  • Ready to use  offices, factories, warehouses and easy start-up and licensing procedures.
  • Exemption from import and export duties.

You can incorporate an individual or a corporate company and can be represented in the below legal forms

  • Sole Proprietorship / ownership.
  • Free Zone Limited Liability Company (FZ-LLC or FZC).
  • Branch of a Foreign Company, where the applicant is a foreign registered corporate person.
  • Branch of a UAE Company, where the applicant is a UAE registered corporate person.
  • Freelance permits are also issued in certain Free Zones.