6 Tips for Choosing the Right Free Zone to Establish Your Business in Dubai


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Establish Your Business in Dubai. Opening a company in Dubai entails choosing between two business locations: mainland Dubai or a free zone.

Both business areas offer several benefits, but choosing to establish your company in one of Dubai’s free zones allows you to access more.

When you opt for a company formation in a Dubai-free zone, you own 100% of the business. You can be the sole owner or be in a partnership or corporation with your choice of partners who don’t have to be Emirati nationals.

Additionally, Dubai free zones offer entrepreneurs a fast and simple setup process without red tape and unnecessary delays.

Setting up your business in a free zone also means you won’t be subjected to personal, corporate, and income taxes. In addition, your company will be exempted from import and export duties.

Trusted consultants in business setup in the UAE also say that establishing your company in a Dubai-free zone means you’ll have access to world-class modern infrastructures, amenities, and services that will help you run your venture efficiently.

Selecting the Ideal Dubai Free Zone for Your Business

At present, there are over 30 free zones in Dubai. The variety of options means you’ll have more potential business addresses to choose from.

However, this can also cause a problem since you’ll need to put in the time to study and narrow down your options wisely.

If you need help with choosing from the different free zones in Dubai to set up your business, below are some tips you can follow to streamline the selection process:

Specify your business activity.

The free zones in Dubai and across the United Arab Emirates have established sets of permissible activities that companies are allowed to undertake.

When you know what type of business you want to open in Dubai, you can have an easier time choosing which free zone can best support your activities.

For instance, if you want to open a business related to health and wellness, Dubai Healthcare City or DHCC may be your best option. This free economic zone specialises in services and solutions in healthcare, medical equipment, medical education and research, pharmaceuticals, and wellness.

If you want to open an online marketing company, Dubai Media City or DMC is the ideal location for businesses involved in publishing, advertising, media technology and services, and other related activities.

Identifying your business activities will also enable you to know which license you need to obtain for your company. This could be a trading, professional, or service license.

Some free zones allow multiple activities under one license, while others do not. If you plan to offer different products or services, you’ll have to look for a hub that allows companies to provide various business activities under just license.

Know the share capital requirement.

Before registering a company in the UAE, you need to deposit the share capital amount.

The minimum amount differs for each zone. For instance, in Dubai Airport Free Zone or DAFZA, the minimum share capital required to open a company is AED 1.

Since each zone has guidelines for the minimum share capital requirement, you need to look into this to ensure you won’t have any difficulties putting it up.

Determine the facilities your business needs.

Even if you are still in the early stages of making your business plans in Dubai, you have to think about both your short-term and long-term goals.

If hiring several employees in the next few years isn’t in your plans, you can get a shared or flexi-desk space at a coworking facility. Aside from being budget-friendly and low-maintenance, these workspaces meet the minimum facility requirement to get a business license in the UAE.

However, if you have plans to have a big team now or in the future and meet regularly with clients or customers, you’ll have to get a bigger space.

Additionally, you should consider the location, infrastructures, and availability of facilities within the free zone.

For instance, if you need access to a warehouse, look for a hub that has this facility.

Know how many UAE residence visas you’ll need.

Companies in the UAE need residence visas for all employees who are not citizens or residents of this country.

If you intend to set up your business in a coworking space, you’ll only get a limited number of residence visas, which varies from one free zone to another. In Dubai, you may only be able to acquire two or three visas.

Some free zones set space requirements for residence visa applications. For instance, you will be able to receive one visa for every nine to 10 square metres in your office.

Choose your type of legal entity.

Whether you are a long-time or new entrepreneur. You have to know that you can set up your business. As a Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.). Or Free Zone Establishment (FZE) in free zones in the UAE.

You have to think carefully about the type of legal entity you choose. Since this will have limitations on the number of shareholders your company can have if you want to have a corporation or partnership.

Additionally, all free zones have their own guidelines on the type of legal entity they can register.

For instance, the Dubai Multi Commodities Centre or DMCC allows the formation of a limited liability. Company made up of a newly formed entity with single or multiple shareholders. The LLC venture can also be a wholly owned subsidiary of a local or foreign organisation.

Find out if you need to submit annual financial reports.

Some UAE free zones require companies to submit financial statements or reports, such as annual audit reports.

For instance, the DMCC free zone requires companies to submit. An annual audit report at the end of every financial year or as specified by the memorandum of association or MOA.

This report also has to be submitted through one of the UAE auditors from the list of DMCC-approved auditors.

Failure to submit this report before the deadline can mean stiff penalties for business owners.

Although preparing and submitting this report entails additional work on your part. Complying with this requirement means you’ll have access to certain benefits. Such as eligibility to apply for a business loan.

With sufficient research and these tips in mind, you can find the ideal free zone. That can help you achieve your business goals in Dubai.