Company formation in a UAE Free Zone
It depends on the type of company. For mainland companies, it is required that you have a resident visa or investor visa in the UAE. In case of a free zone company, since it provides 100% foreign ownership, the owners need not have a resident visa. However, the general manager of the company must reside in the UAE. Click here for our office space packages.
While the free zones vary in the names of the structures available, broadly speaking, the following legal structures are available in most free zones.
Free Zone Establishment (FZE) – Sole Establishments / Single Shareholder (can be individual or corporate)
Free Zone Company or Free Zone Limited Liability Company (FZCO OR FZ-LLC) – More than one Shareholder / Multiple Shareholder (can be individual or corporate, or both)
Branch office – Where the shareholder is a parent company registered outside the free zone (can be outside the UAE, or a UAE-based company).
The minimum capital requirement depends on the jurisdiction and the business activity you want to operate. Required capital ranges from AED 1,000 to AED 300,000. With a few exceptions (DMCC, Tecom Free Zones), this capital is not required to be deposited in a bank account in the name of the company.
However, in all cases, the capital can be used as working capital, i.e. withdrawn after the completion of the company setup formalities.
Branch companies do not require any capital.
A free zone company has 100% foreign company ownership, 100% repatriation of capital and profits, exemption from all import and export duties, no corporate tax and no dividend tax. However, if the business is established in the mainland, then, a 5% custom duty is applicable.
No, Free zone companies do not require the owner to live in the UAE as it offers 100% foreign ownership, however in most cases, a general manager of the company is required to be a resident of the UAE.
Yes, a company setup and licensed in the free zone can do business outside the UAE. If you wish to trade within the UAE mainland, you can sell your goods to an LLC in Dubai,that can act as a distributor.
This is done after paying the customs duty for the goods. You can also open a branch of the free zone company in the mainland, and carry out the activities as specified in your license.
Click here to know more about how to establish a branch of a free zone company in the Dubai mainland.
Here are some advantages of setting up a business in a Dubai Free Zone:
- 100% foreign ownership
- 0% corporate tax for 50 years
- 0% personal income tax
- 100% repatriation of capital and profits
- 0% import or re-export duties
- No currency restrictions
- No restrictions on foreign talent or employees
In addition to this, company formation in a Dubai Free Zone allows investors to derive benefits from the extensive network of double-tax avoidance treaties that the United Arab Emirates has signed with countries worldwide, including countries such as India, Pakistan, Singapore, China, Malaysia, Canada, Germany, Italy, Austria and Holland.
Dubai offers the additional benefits of a very high standard of living and a vibrant expatriate community with people from over 180 nations living and working in the region.