Free Zones

Free Zones in UAE

Designed to encourage foreign direct investment, the UAE’s range of free zones are free from many of the costs and restrictions placed on businesses established throughout the rest of the UAE.

While there are free zones throughout the Emirates, most are concentrated in and around Dubai. These free zones are often industry-specific, restricting the activities of businesses within each free zone to the range of permitted activities related to that industry.

Why choose a free zone entity?

Free zones are permitted their own laws and regulations within specific areas, quite apart from those enacted elsewhere in the UAE.

As an example of this, the Dubai International Financial Centre (DIFC) has its own body of law, including corporate law, contracts law and employment law, as well as its own court system.

In certain respects, free zones govern themselves, which allows them to provide a number of incentives to foreign investors looking to set up in Dubai.

• Foreign investors can retain 100% ownership of their business. Unlike a limited liability company on mainland UAE, which typically requires a local partner to hold a 51% stake in the business, free zone entities can be wholly owned by foreign investors.
• The regulations for establishing a free zone entity are less rigorous and time-consuming than on mainland UAE, making them quicker and easier to set up.
• Much the same throughout each free zone, establishing a business is typically a two-step process. First, obtain an initial approval from the free trade zone authority, then apply for a trade licence and registration.
• There are a number of free zone structures on offer, including a representative office or branch of a foreign company, a free zone company or a free zone establishment.
• Free zone entities are permitted to import and export good with no custom duties or levies, and are free to repatriate 100% of their capital and profits.
• Companies and individuals pay no corporate or income tax, and can obtain visas from the free zone authority, rather than the UAE government.

Essential Free Zone Information

Where mainland UAE or “onshore” businesses are free to undertake an array of activities, free zone or “offshore” business are restricted to the industry-specific activities permitted within their free zone.

Onshore businesses are also free to trade throughout the GCC and UAE, including within the free zones, however, offshore businesses are typically only allowed to trade internationally, or within their own free zone.

Another factor to consider is the cost of setting up and running a business within a free zone. Ongoing costs such as office space rental can be higher than elsewhere in the UAE, with fewer options on offer.

To find out more about establishment options in Dubai, contact us today on 00 971 4381 7333 to arrange your free, no-obligation consultation. While Fusion Middle East does not offer free zone establishment services, we will happily put you in touch with a trusted company that does.