What Are Free Zones?
Free Zones are geographic areas in a nation where goods, services & commodities may be traded without the intervention of stringent customs regulations. In most Free Zones, companies are taxed minimally or sometimes even fully exempted, to encourage economic activity.
The Free Zones Operating In UAE
Any entrepreneur focuses on planning the most profitable environment for his or her business to make sure that it keeps flourishing. Perhaps, this is the reason why the bulk of entrepreneurs who own companies of any scale, from local businesses to multinational corporations, have heard about setting up a company in a free zone in UAE But why the UAE? And why is this option pops up here and there and promises to be unbelievably beneficial? Let’s figure it out.
The UAE has long been an engaging destination for entrepreneurs the world over. Offering low tax, a strategic location at the heart of the world’s largest and fastest emerging markets, and a government committed to nurturing and supporting business, it’s not hard to see why.
But while these may be the factors that prepare the headlines, there’s another major reason why so many flock to the UAE’s shores to do business – free zones.
The UAE’s free zones – also recognized as free trade zones – are essentially economic areas where goods and services can be traded, usually at preferential tax and customs rates. They were basically rolled out to boost international business in the region by offering benefits such as 100% foreign company ownership. There are currently 45 free zones over the UAE.
Over the years, the UAE’s free zones have developed to offer ever-increasing advantages to the businesses within them. Many free zones contribute to specific industries or business types – for example, Dubai Healthcare City serves those in the healthcare industry while Jebel Ali Free Zone Authority is directly connected to the largest port in the region and is accordingly favoured by those in the import/export trade.
Creating a business presence in one of UAE’s Free Zones is an attractive option for foreign investors, as Free Zones facilitate business activities and attract companies looking to start up businesses quickly and easily. The Free Zone areas in UAE are geographically separate divisions and follow laws and regulations vastly different from the laws that govern companies within the UAE. Companies operating within the Free Zones are acknowledged as foreign companies or companies operating outside the UAE.
Each Free Zone in the UAE is a separate thing with its own Free Zone Authority that governs, handles enrollment and issues licenses within the Free Zone. Although Free Zones vary over the Emirates, the basic principles remain the same.
Advantages of setting up a business
Free trade zones are specific fields which offer tax, tariff, and regulatory incentives in order to attract export-oriented companies.
Usually, these incentives only apply for raw elements/products that are for destined for export, if they are eventually sold to the local market, normal tariffs will apply.
• Easy Set up
• Support & Assistance
• Exemption from customs duties;
• Exemption from value added tax (VAT)
• Exemption from import and export tax
• Reduction in corporate tax
• 100% foreign ownership
• Increase in limit of foreign employees. 100% repatriation of capital and profits
• 100% free transfer of funds
• 100% exemption from import and export duties
• Free zone company formation is faster than incorporation outside in the city
• Inexpensive workforce and easy recruitment procedures
• 25 years lease options, warehouse equipments, availability of areas for production and assembling, etc.
• No personal income tax
• No corporate tax
• No customs duties (within the area)
• Free capital transfer
• Foreign company ownership
• Liberal Visa regulations
• Speedy business setup & licensing
• Low overhead
• Availability of an ample, skilled workforce
• Ready path to a potential market of 2 billion consumers
• No currency restrictions.
• Modern efficient communications
• No duties on import or export.
• 100% repatriation of capital and profits.
• Liberal labor laws and no recruitment problems.
• Attractive working environment
As one of the leading Dubai-based consultancy firms, Consult us & Thrive can cost-effectively research your Product/Services of a UAE company, establish your physical presence in the Emirates, and guide you to a future of prosperity. We at Consult us and Thrive can help you set up your company, open local and international bank accounts, and obtain residency visas. SSC is able to assist in all aspects from completing the incorporation process to installing your company in our business center, we’ve got you covered.