It is no lie that the UAE is the most desired investment location for most businessmen. However, that often remains a dream due to certain requirements that foreign investors must fulfill like the mandatory inclusion of a local partner who is to own 51% shares of the business. This has led to the popularization of free zones; business setup in Dubai free zones grant foreign investors total ownership of their businesses. A free zone is basically a business zone which has very minimal trade barriers where goods may be manufactured, imported or exported completely tax free. Their strategic location is also another perk you may enjoy once you have your business setup in the Dubai free zones.
Types of Entities and Licenses
Business setup in the Dubai free zones is significantly smooth and hassle free, unlike most jurisdictions in the world. This is one of the main contributors of the surge in foreign investors flocking the country with minimum capital investment. There exist 3 main types of entities that can be set in a free zone and they are;
- Branch of a foreign or local company
- Free zone establishment (FZE) with a single shareholder
- Free Zone Company (FZC), with 2 to 5 shareholders.
For any business to commence operations, they require certain licenses from the various authorities. Having your business setup in the dubaifree zones allows you to obtain a number of licenses which include;
Trade license – grants on authorization to perform industrial, commercial, or consulting activities
Service license – these licenses allows services to operate
Industrial license – allows for importation of raw materials, manufacturing goods as well as exportation of finished product globally
Manufacturing license – basically allows applicants to manufacture products
General trading license – allows investor to trade in all kinds of products
Warehousing license – an investor can procure warehousing facilities on lease for distribution and storing of goods with this license.
Procedures and documents
There exist a number of procedures to determine before stating your business setup in the Dubai free zones and include the following;
Determine the type of legal entity
Determining the type of entity, you want to set up in any of the free zones is important because it allows you to know the exact capital required to form your business
Choose a trade name
One you have decided on a legal entity, choosing of a trade name should be next. Before deciding on a trade name, you must confirm it is not already in use by another business.
Apply for a business license
Business license application should come next. The type of business license you apply for should depend on the primary activity of your business. Issuance of supporting documents is also needed when applying.
Choose an office space
The government supports startups by providing office spaces either for leasing or buying at an affordable price. Office requirements are dependent on the type of business as well as the number of staffs.
Get pre-approval, register your business and get the license
You should get business approvals as well as the initial approvals from the relevant authorities, register your business at the portal and proceed to get your license.
