The aim of this overview is to provide the clear understanding of the Dubai Free Zone company registration procedure.
First of all, it should be noted that the so-called “Dubai Free Zone” does not exist at all. The term is used figuratively and comprises all the UAE Free Trade Zones that specialize in different sectors. Thus, the Dubai Free Zone is not an individual entity, but a general term for numerous FTZs that are located in Dubai.
In general, the Dubai company registration procedure is the same in all the FTZs. However, each FTZ can have its specifics of carrying out the incorporation. These peculiarities are regulated by the administration departments of each particular FTZ.
Dubai Free Zone company formation is the best way to start a successful business in the UAE for both foreign legal entities and natural persons. The UAE Law provides transparent and the most advantageous terms and conditions for setting up new businesses.
Dubai Free Zone Company Formation Procedure
It stands to reason that the decision to set up a company in any of the Dubai FTZs is always preceded by certain preparations. It implies, at least, conducting a thorough market analysis and creating a well-thought-out business plan.
The regular procedure of company formation (unless there are certain peculiarities of a particular FTZ) consists of the following stages:
- Choosing a license that meets the needs of a particular business;
- Confirming the activities permissible under the license with the activities acceptable in the chosen FTZ;
- Checking the availability of all the necessary premises or a possibility to open a virtual office;
- Calculating total expenditures on the company formation process;
- Submitting all the required documents to the FTZ’s administration department;
- Payment of various administration and registration fees;
- Applying for additionally required documents (establishment card, PO Box, etc.);
- Bank account opening and share capital payment (if applicable);
- Obtaining additional approvals and permits (if applicable);
- Receiving business license and other company registration documents.
Now let us see in detail each stage of the Dubai Free Zone company formation procedure individually.
Choosing a license
Choosing a license is the first and important step in the process of Dubai free zone company registration procedure. The choice of a license will predetermine the type of activities you will be able to carry out. That is why it should relate to your business plan.
You may choose among the following types of business licenses:
Free Zone Trading License
The license provides a possibility to conduct the main types of trading activities (buying-selling, import-export). The number of permitted goods is limited to three closely related categories of items.
Free Zone General Trading License
Dealing with almost all types of goods and commodities (unless they are prohibited by the Law or require special approvals). The General Trading License is more expensive than the regular one. Substantial payments for the share capital may be obligatory.
Free Zone Consultancy / Service License
Provision of consulting, accounting, IT or other services.
Free Zone Industrial License
Allows manufacturing, process, and packaging and assembling various goods, machinery and equipment.
Free Zone Commercial License
Opening workshops, providing fixing and other services, etc.
Approving business activities
Some FTZs put restrictions on the type or number of permitted activities. Check your business plan with the guidelines applied in an FTZ.
Determining the legal structure of the company
The legal structure depends on the number and nature of the partners involved and effects the required documents, associated costs, etc.
Confirming business facilities
Be sure that you will be able to get premises of the necessary type. Office premises and storage facilities are provided in almost all the FTZs. At the same time, you should remember that the availability of real space can become a limiting factor. However, a service of virtual offices is obtainable only in some FTZs.
Calculating total expenditures
When choosing an FTZ it is necessary to pay attention not only to the evident cost of a company formation procedure but to take into account all the unseen charges and extra fees.
Usually, the cost of company registration procedure includes:
- first year cost for company formation;
- renewal costs (paid yearly);
- facilities costs (if a real office is required);
- share capital requirements;
- visas costs.
Sometimes, the offered packages include only the costs of a business license. It means that you will have to pay rent for needed premises and other yearly package charges. It can be difficult to uncover such hidden charges at the stage of choosing an FTZ. That is why it is advisable to use the services of an experienced business consultant.
Submitting all the required documents to the administration of the Dubai Free Zone
A set of the required documents varies depending on the nature of the business (branch - subsidiary, establishment - partnership, trading - industrial - services).
Usually, the following documents are required:
- application form;
- a copy of the passport;
- a copy of the visa (if the visa is available);
- business plan;
- statements of bank accounts (proving the capital value);
- no objection certificate from the current sponsor (for the UAE residents).
Obtaining additional approvals
Some additional approvals from various regulatory departments may be required depending on the type of company activities.
Usually, approvals are necessary from the following institutions:
- Ministry of Education: in the case of providing education-related services;
- Environment Department: in the case of carrying out industrial or other activities;
- Ministry of Health: in the case of carrying out activities related to food industry, pharmaceuticals, etc.
At this stage, you have to pay the entire company incorporation and licensing fees and other charges. If you rent any premises you should pay rent. You should also open a company account in the case if the share capital payments are required.
Receiving business license and other documents
On the final stage of the Dubai Free Zone company formation procedure, you receive a Free Zone Business License and other documents (certificate of incorporation, share certificates, etc.). It allows you to start carrying out business operations and, if necessary, to apply for the UAE visa.
Dubai Free Zone Company Registration Procedure is the complicated and time-consuming process, which requires considering many factors and analysing bulks of information.
It may take you up to 8 weeks to register a company in the UAE. On average, you will spend 3-4 weeks in the UAE to get information on all the features of the UAE FTZs and banking institutions. Then you will have to assess all the possible options to make a right choice for your business. Another 2-4 week will be spent on getting a residency visa.
However, you can entrust all your concerns to professionals. In this case, you will have to spend only two days in the UAE. Then we will handle all the necessary issues for you. Our company possesses a vast experience in registering all types of companies in the UAE. Contact us and start your business in the UAE - one of the most favourable places in the world.