Basics of a Free Zone Company Formation

The United Arab Emirates is etched in everyone’s mind as an oil-rich nation, with futuristic architecture, advanced technology and an enormous tourist appeal. A great deal of revenue in the UAE is generated through its tourism industry. However, many are unaware of the liberal business environment in the UAE. In cities like Dubai, Ajman, Abu Dhabi, Sharjah, Ras Al Khaimah (RAK) and Fujairah, there are many free zones, where one can easily obtain license for a smooth business venture.


To set up a Free Zone company, there are certain technicalities and formalities one has to go through. For instance, as is with every other company in any country, a Free Zone license has to be obtained from the appropriate authorities. Incidental to the nature of the business venture, a Free Zone license is of various types. If you want to set up an exclusive manufacturing and packing business, you will have to get a ‘Free Zone Industrial’ license.

Similarly, if export-import is your forte, you can opt for a ‘Free Zone Trading’ license or a ‘Free Zone General Trading’ license. Licenses are also available for services such as consultancy, warehousing and media.

Depending on the type of business and license obtained, there will be legal obligations to fulfill. This includes documentation such as notarizations, submissions, translations, Visa and work permits, , housing or property documents, partnership papers, auditing requirements and so on.

The List of Free Zones in UAE is increasing by the day. The regulatory body wishes to promote free and unrestricted trade. Within Dubai itself there are 25+ Free Zones. The advantage of a free zone business venture is that you will have complete ownership of your venture. You can relinquish or wind up as per your whim. Besides, there are no taxes that will be levied on the business. A yearly renewal charge has to be paid for continuation of business. You have flexibility to expand the venture while maintaining utmost confidentiality.

If you want to set up a free zone venture from the scratch in Dubai, there are business consultancies that can aid and advise you on the best foot forward. It is undoubtedly advisable that before embarking on the assignment, you do a market research of your own. Having sufficient knowledge of the desired industry will help you secure the business requirement and enhance your negotiation power. It will also be worthwhile to make a detailed business projection plan for your chosen venture.

Every free zones in UAE has its own regulatory authority that inspects and oversees the documentation and registration process. Even businesses owned by foreign entities are allowed to engage in free zone activities with a valid license. Assistance with housing, leasing options, recruitment, etc become hassle-free with a free zone license. Moreover, your venture will be exempt from corporate taxation for over 50 years. There are no restrictions as to the number of activities. On receiving permissions from the Health Ministry, Immigration Department, Environment Ministry, Civil Defence Department, all you have to do is make the necessary payment and sign the agreement, and now you are a step closer to fulfilling your business dreams.

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