The Free Zone company in the Emirates
General presentation
Free zones in Dubai offer numerous advantages for businesses, from administrative flexibility to streamlined procedures for foreign investors. However, each zone has its own characteristics, and it is essential to thoroughly understand the strengths, weaknesses, opportunities, and threats before pursuing this path.
Strengths and weaknesses
Free zone forces in Dubai
- No Emirati partner required: Unlike other forms of business, companies based in a free zone in Dubai do not need local Emirati partners. This allows foreign entrepreneurs to retain full control of their company.
- Common law: The legal system used in free zones in Dubai is based on common law, which is often more familiar and understandable to international investors.
- Administrative simplicity: Administrative procedures in a free zone in Dubai are streamlined, making it easier to establish and manage a business.
- Wide choice of locations: Free zones offer a variety of strategic locations for establishing your business, allowing you to choose the zone that best suits your specific needs.
- Offices with employees: Companies can benefit from offices in the free zone, with the possibility of hiring employees, which facilitates business operations.
Weaknesses of the free zones in Dubai
- Office costs: In some free zones in Dubai, office costs can be high, which may be an obstacle for certain companies, particularly those with a limited budget.
- Limited activities: Certain business activities are not permitted in some free zones, which limits the possibilities for some companies.
- No import code: It is not possible to obtain an “import code” in a free zone in Dubai, which may complicate business operations for some companies.
- Restricted location: Offices must be located in the free zone in Dubai, which may not be ideal for companies seeking to expand into other parts of Dubai.
Opportunities and threats
Opportunities in Dubai's Free Zones
- Double taxation treaties: free zones in Dubai benefit from international tax agreements that help reduce tax liabilities by avoiding double taxation.
- Economic substance: By choosing a free zone in Dubai, companies can demonstrate genuine economic substance, which can enhance their credibility in the international market.
- Dual licence: Some free zones allow companies to obtain a "dual licence", authorizing them to conduct activities both in a free zone and on the mainland, thus offering greater flexibility.
Threats to Free Zones in Dubai
- No activities outside the free zone: Companies based in a free zone in Dubai cannot conduct business activities outside the zone without a specific license.
- Reputation issues with certain free zones: Some free zones may have a poor reputation, which can make it difficult to open bank accounts or collaborate with business partners.
Key features
Register
More than forty Registries across all the Emirates: DMCC, DWC, Meydan, IFZA, DIC, etc.
Permitted activities
Consulting, Trading, Holding.
Minimum capital
Depends on the free zone.
Release of capital
Manager
Minimum one. It may be an individual or a legal entity (in the latter case, an individual Manager must also be appointed).
Associate(s)
Any individual (private person - minimum age 18) or legal entity (company).
Requirement to have an Emirati shareholder
No.
Bank account
Business bank account.
Registration obligations and deadline
Accounting
Required.
Audit
Mandatory (sometimes not required by the Registry).
Time to register
From 7 days to 1.5 months according to the Register.
Which Free Zone registration should you choose in Dubai?
There are about sixty Free Zone registries in the Emirates. We present on our website the registries that usually meet our clients’ needs: