Why Choose UAE Free Zones for Your Business?
For the past years, UAE got attention from investors all over the world for its unique geographical location and tax benefits provided for international businesses. If you are planning to setup your business in UAE this blog will be helpful for you to get an idea about why choose a UAE-free zone for your business setup.
Free Zone business setup is the most demanded business setup in UAE because of the 100% ownership. Free Zone is a geographically defined area with a boundary where businesses are allowed to trade goods and services within the limits. There are over 60 Free Zones in the UAE and each free zone offers different benefits compared to each other. There are some free Zones dedicated to Media, Health Care, Education, Manufacturing, Importing and Exporting, Trading, and many more.
Finding the best free zone for you depends on the business activity you are looking to do in the UAE. Some business activities require several business approvals which must be taken separately by different respective local departments. For example, an aviation business should take special approval from the civil aviation department.
Further, you need to choose a facility as well for your business in the UAE. You could choose from virtual offices to ready-built shared offices, dedicated offices, warehouses, or even buy a plot of land to construct your own facility. Generally, it’s not that difficult to setup a business in a free zone in the UAE. Most Free Zones provide the business license within one day. Check out our post on how to start a free zone company in UAE for more information.
There are mainly three types of legal structures in a Free Zone business formation:
- FZE (Free Zone Establishment) – One Shareholder in the Company
- FZC (Free Zone Corporation) – Multiple Shareholders in the Company
- A Branch of a local or international company
Pros of Setting Up a Business in UAE Free Zone
1. 100% Business Ownership
Unlike in Mainland businesses where the highest shares of the company should be obtained by a local sponsor, Free Zones offer 100% ownership to all foreign business owners from small to large enterprises.
2. Setup your Business within one Day
It is relatively easy to setup your business in a Free Zone and most free zones offer business licensing within a single day.
3. Own dedicated Free Zone Jurisdiction – Trouble-Free Immigration Procedures
Investors and employees will get 2-3 years’ residence visas depending on the chosen free zone for your business. Each Free Zone has its own in-house team to process immigration-related services. Employees will benefit from many privileges from the visas like sponsoring their family, spouse, and children
4. 100% Repatriation of Capital and Profit
UAE offers 0% income tax for businesses and has a double taxation avoidance agreement with 135 countries. Business owners could get the full tax benefits.
Find out with what countries UAE has signed an agreement to avoid double taxation
5. Corporate and Duty Tax Exemptions
Enjoy 0% corporate and duty tax if you offer your service inside the Free Zone or import and export products internationally without dealing with the mainland of the UAE. However, it’s not the same case in mainland businesses. If you are offering a product or service for the mainland business community, you are liable for corporate tax (VAT) of 5% and duty tax separately. Check our blog post about Introduction to VAT in the UAE.
6. Labor and Staff Accommodation
If you are planning to hire employees for your company, some free zones offer onsite labor and staff accommodation, so you need not worry about your employees’ shelter. Restaurants and recreational centers are available in the free zone itself.
Cons of Setting Up a Business in Free Zone
1. Limited Business Expansion
2. Business Activity Restrictions
Eagle Eye International is a corporate service-providing company with over 22 years of experience in the UAE. Book a free consultation with our team to find out the most reliable and cost-effective solution for your business in the UAE.
