Freezone Company In UAE | Discover How You Can Keep 100% Ownership of Your Business
Freezone company in UAE: Process, requirements, benefits, limitations, procedure, and costs to set up a freezone company in UAE
Freezone company in UAE: Many businessmen shied away in earlier days from this lucrative paradise of opportunity called UAE especially Dubai only because they needed to have a 51% local partner as the sponsor.
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As Jebel Ali Free Zone was introduced in 1985 foreigners became free to set up 100% owned businesses in the newly set up business areas called Free Zones.
From then on freezone company became a popular form of business. Now almost all emirates in the UAE have ever-growing free zones.
Free Zone companies do have some constraints when compared to local LLC companies but to an enterprising businessman, these hardly matter in accomplishing the business.
Procedure and costs to set up a free zone company in UAE
The procedure outlined below is typical for a free zone company in UAE. A free zone may skip or add some step. The time taken to complete this procedure is about 28 working days from the application. Please check with your consultant about the precise steps.
1. The first requirement to set up a free zone company in UAE is to decide who will the shareholder. You or your home company. Normally when you have more than one shareholder it is called an FZ LLC otherwise it is called by suffix FZE -Free Zone Establishment.
2. Thereafter you need to decide the share capital for your free zone company in UAE. Many free zones have a minimum share capital requirement. This is always given in UAE Dirhams (AED). Approximately AED. 3.67 = USD 1 at a fixed exchange rate.
This amount is per shareholder in some free zones, and in others, it is total for the company. Starting from AED. 150,000 it goes up to AED. 1 million in the case of Jebel Ali Free Zone.
3. You need to decide the company name and who will be the Manager of the new company. Manager’s name appears on the business license. A choice of the final company name is made from 3 alternatives submitted to the free zone by you.
4. If your home company is the shareholder then you must get the certificate of incorporation and memorandum of association attested by the local UAE embassy. This costs time and money.
Your home company must also pass a board resolution to form the free zone company in UAE. The board resolution must mention who the manager will be. This resolution must be attested.
5. An application for name and activity approval is made. Once this is done in a week the application in detail must be submitted.
6. The application form for the free zone along with the passport copies of the shareholder and the manager must be submitted to the Free zone authorities.
If the shareholder is a company then the attested company documents with the passport copies of the manager must be submitted. Some free zones ask for a business plan in brief.
7. A preliminary approval is granted and a letter to open a bank account is issued for the investor to deposit the capital. This capital must be retained until the trade license is issued.
8. On the deposition of capital, a letter is collected from the bank and shown to the Free Zone authorities to complete the legal process of registration.
This process involves payment of license and registration fees, lease rent, signing a lease deed, signing the Memorandum of association for the new company, and a resolution of the subscribers.
Some free zone allows the process to start even before the capital is shown. The Manager authorized to sign on behalf of the investors must sign all the legal documents.
9. Once the registration process is completed the license is issued and you are ready to start the operations.
The costs for setting up a free zone company vary from free zone to free zone.
It normally comprises of
- One time registration fee
- A yearly trade license fee
- Yearly lease rent and
- Sundry costs such as post box rent, card charges, name approval charges, and notarization.
Your set up consultant will provide the exact estimate.
Some free zones also form a company with a standard minimum package for a single investor that offers all components of costs for a lump sum yearly fee. This is economical.
Thus you will see that a foreign investor can easily own a 100% stake in the business by forming a freezone company in UAE. There are more than 30 free zones to choose from. They all vary in costs and procedures are almost the same. But speed varies from free zone to free zone.
All you need to do is get the basic KYC documents ready, pay the fees, show the capital and apply. An agent facilitates the process if you are not free to come personally.
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