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Ten Things You Need to Know When Setting Up a Business in a UAE Free Zone
The United Arab Emirates (UAE) is a world-famous business hub these days among foreign investors. The diversity of businesses conducted in this region envisions a promising economic future, attracting even more wealth in its economic infrastructures. One of the main reasons why the UAE is one of the world’s most appealing entrepreneurship destinations is the government providing entrepreneurs with a head start in ‘free-zones.’ These sector-specific business areas have their own terms and regulations that aim to diversify the UAE’s economy.
The benefits of investing and entrepreneurship in the UAE are:
- Total tax exemption – Foreign business owners in the UAE free zones can own their business 100%, totally corporate tax-free, with total exemption from import and export tax. They will also receive assistance with recruitment.
- Foreign entrepreneurs will be in total control of their business. – Outside of the free zones, foreign investors need to work with local partners to establish a business – this is for businesses requiring a commercial or industrial license. The local partner shall own 51% of the business without government interference or no shares in benefits.
- No income tax – This is a huge benefit that foreign entrepreneurs are exempted from income or corporate taxes inside the free zones. Outside of these zones, although there is still no income tax, there will be corporate taxes.
- Owning 100% of benefits – Operating businesses in free zones provide foreign investors to own their capital and profits 100%.
- 100% import and export duty exemption – There are no payable duties on imports and exports in free zones. There will be normal customs duties, however, applied to selling in local and Gulf Cooperation Countries (GCC) markets. The paperwork and red tapes related to these affairs are simplified and are all in English.
- Ready access to the knowledge, expertise, and collaboration opportunities – Many businesses are being operated in the UAE’s free zones. Thus, it has become a knowledge hob for investors, businessmen, and entrepreneurs to exchange their knowledge and have a bigger picture of how various businesses are interconnected and operated.
- Multiple share capital options – Depending on the free zones a business is set up, the shares can be low or high in price. Establishing a branch of an existing firm, however, does not require any share capital.
- No need for having physical office space in some free zones – Most free zones demand foreign investors to be residents of the UAE and have a physical office presence in the region. On the other hand, some free zones can reduce this physical office presence to a Flexi-desk or Flexi-office.
- Facilitating visa applications for family members – Once the business owners receive their visas, they can get residence visas for their families and employees, which are normally issued quickly. Visa durations vary between one to three years.
- Various annual audits – Annual audits differ in different free zones. In some free zones, there are no annual audit requirements even. However, keeping a well-maintained set of accounts is still necessary. This is an exceptional opportunity for business owners as annual audits can be costly and time-consuming.
Setting up with Business Setup Specialists – Smart Zone
At Smart Zone, our team of Business Setup Advisors will guide you through the obligations of starting a mainland and free zone business, as well as support you to get the required documentation. With the right guidance and Governmental connections. Smart Zone can setup your UAE mainland or free zone business in no time. Call today.