Cost of establishing a company in the Dubai Free Zone

٠٨ يناير Cost of establishing a company in the Dubai Free Zone

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Dubai Free Zone is one of the most prominent modern and advanced economic destinations in the world. It is characterized by advanced infrastructure and favorable commercial laws and regulations, making it an attractive destination for businesses and investments. One of the main factors to consider when considering setting up a company in the free zone is the cost. In this article, we will discuss the cost of setting up a company in the Dubai Free Zone.

The cost is affected Company formation in the free zone Depending on several factors, including the type of company you want to establish and its business activity. There are different types of companies such as a local company, a subsidiary company, a national company, and a limited liability company.

Cost of establishing a company in the Dubai Free Zone

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Establishing a company in the Dubai Free Zone

Establishing a company in the free zone Dubai is an excellent investment option for many foreign businessmen due to the many advantages these areas offer. Dubai’s free zones provide a convenient and ideal business environment for setting up businesses, which contributes to facilitating entry into the UAE market. One of the most prominent advantages is the possibility of full foreign ownership, where foreign investors can own companies 100% without the need for a local partner, which enhances complete control over business operations and revenues.

Free zones simplify the incorporation process, reducing the time and effort required to start a business. The process usually involves submitting basic documents such as passports, a lease contract, and a license application, and the incorporation process can take anywhere from a few days to several weeks. This system is highly efficient in handling applications, which enhances the speed of project implementation.

In terms of costs, setting up in free zones involves fees related to obtaining licenses, renting offices, and legal consultancy costs. These costs may be relatively high compared to some other options, but they are offset by significant benefits such as tax exemptions and no tax on profits. In addition, free zones provide advanced infrastructure and excellent logistics services, which contribute to enhancing the efficiency of business operations and supporting sustainable growth.

How to set up a company in the free zone

Establishing a company in the free zone In Dubai, specific steps are required to ensure a smooth and local-compliant process. Here is a comprehensive guide to the steps to set up a company in the free zone:

Specify the business activity: Determine the business activity or activities your company will undertake. The activity you choose must be compatible with the activities permitted in the free zone you choose.
Choosing the right free zone: Choose the free zone that best suits your business and needs. There are several free zones in Dubai such as Dubai International Financial Centre (DIFC), Jebel Ali Free Zone (JAFZA), Dubai World Trade Centre, and others, each offering specific benefits and services.
Choosing a company name: Choose a name for your company and make sure it meets the naming requirements of the free zone you choose. Make sure the name is not similar to the names of existing or protected companies.
Preparing the required documents: Collect and prepare necessary documents such as passports of the individuals involved, personal photos, a copy of the lease agreement for the office or commercial space, and a copy of the business plan if required.
Submitting an application for establishment: Submit an application to establish the company to the free zone authority of your choice. The application will involve submitting the required documents, completing the forms, and paying the required fees. The application may also include details about the partners, investors, and the company’s business.
Office Rental: Rent office space in the free zone. Rental costs vary depending on the size of the office and location within the free zone. You will need a formal lease agreement to submit with your application for incorporation.
Open a bank account: Open a business bank account for the company at an approved bank. You will need to provide the incorporation documents and the required capital to open the account.
Obtaining licenses and permits: After submitting the incorporation application, the Free Zone Authority will issue the necessary licenses and permits. Make sure to obtain all the licenses required to legally operate the business.
Registration in government departments: Register your company with the relevant government bodies such as the Chamber of Commerce if necessary. You may also need to register for a Value Added Tax (VAT) number if your business is taxable.
Issuance of work and residence visas: Issue work and residence visas for employees and managers if required. You will need to submit employment and establishment documents to obtain visas.
Starting a business: After completing all procedures and obtaining the necessary licenses, you can start the company’s operations and implement your business activity.

Key Advantages of Setting Up a Company in a Free Zone

Establishing a company in the free zone Dubai comes with a host of benefits that make it an attractive option for foreign investors. Here are some of the most notable benefits:

Full foreign ownership: Foreigners can own 100% of the company without the need for a local partner. This gives investors complete control over the company and profits without the need to share ownership.
Tax exemptions: Companies in free zones often enjoy extensive tax exemptions, such as no corporate or profit tax. This helps reduce costs and increase profitability.
Simple and fast registration procedures: The process of establishing companies in free zones is faster and more efficient than in onshore areas. Procedures are simplified and often handled electronically, which reduces time and effort.
Customs duty exemption: Companies in free zones typically benefit from customs exemptions on imports and exports, reducing trade and transportation costs.
Advanced infrastructure: Free zones provide modern infrastructure and advanced facilities including offices, warehouses, and service facilities. This infrastructure supports business efficiency and contributes to accelerating business processes.
Easy access to global markets: Dubai’s strategic location makes the free zones an important regional hub for international trade, allowing easy access to the markets of the Middle East, Asia and Africa.
Various office space options: Free zones offer a wide range of office space options, from single offices to large facilities, allowing companies to choose what suits their needs.
Flexible work and residence visas: Free zones provide ease of obtaining work and residence visas for employees and managers, which helps in bringing in the necessary competencies to operate the business.
Exemption from legal restrictions: In free zones, investors enjoy greater flexibility in legal systems, which reduces administrative restrictions and complexities related to business activities.
Encouraging business environment: Free zones provide a stimulating and growth-friendly business environment, with government support and facilitation measures for investors and entrepreneurs.
Integrated support services: Free zones provide comprehensive support services including licensing assistance, legal advice, and business development assistance, which helps speed up the start-up of a business and facilitate the process.

Documents required to establish a company in the free zone

To set up a company in a Dubai free zone, the required documents usually follow a similar pattern in most free zones. Here is a general list of the basic documents you may need:

Commercial License Application Form: The commercial license application form specified by the free zone operator must be completed. This form must be signed by the founders or authorized directors.
A copy of the founders’ passport: A copy of the passports of all founders and shareholders of the company must be submitted. Passports must be valid.
Copy of residence (if any): If the founders have a residence in the UAE, a copy of the valid residence must be provided.
Detailed business plan: A detailed business plan must be submitted, including a description of the proposed company’s activities, marketing plans, organizational structure, and projected financial estimates.
Bank certificate (for cash contribution): You may be required to provide a bank certificate proving that the required cash capital for the company has been deposited in a specified bank account.
Memorandum and Articles of Association: The articles of association and memorandum of association of the company must be prepared and submitted in accordance with the requirements of the particular free zone.
Power of attorney for the person authorized to sign (if any): If someone is appointed to submit documents and signatures on behalf of the founders, an official power of attorney must be provided.
Approval of the operating entity of the free zone: Some free zones may require prior approval from the free zone operator to establish the company. You must ensure that all documents and requirements are in compliance before submitting them.

Free Zone Company Formation Fees

When setting up a company in Dubai Free Zone, there are a number of basic fees that need to be taken into consideration. These fees include:

Licensing and registration fees: The cost includes issuing a commercial license and registering the company in the free zone.
Rental costs for office or commercial space: It varies depending on the size of the office and its location within the free zone.
Bank account opening fees: Administrative fees related to opening a business account in a bank.
Work and residence visa fees: Costs of obtaining work and residence visas for employees and managers.
Legal and accounting consulting fees: Relates to the cost of legal and accounting consultations to prepare legal documents and licenses.
Additional service fees: Additional services include insurance, office fit-out, and legal translation.
License renewal fees: Annual license renewal fees after the initial license expires.

At the end of our article about the cost Establishing a company in the free zone In Dubai, this option is an attractive opportunity for many foreign investors looking to enter the UAE market. Dubai’s free zones offer an ideal business environment, with significant benefits including 100% foreign ownership, tax exemptions, and simplified and fast incorporation procedures. However, it is important to understand that costs vary depending on the type of activity, location of the free zone, and size of the company.