What is Your Business Activity?
Find Your Tribe!
Many Free Zones specialize in specific sectors like tech, healthcare, or media. This creates a vibrant community for networking and collaboration with like-minded businesses.
First Things First:
Identify your core business activities and the license you will need. If you don’t fit neatly into one niche, a general Free Zone might offer more flexibility.
What Legal Entity Will Your Business be?
Free Zone Limited Liability Company (FZ LLC):
This type of company can have one or more members who can be either individuals or companies. This offers more flexibility in terms of ownership structure.
Free Zone Company (FZ Co.):
This type of company must have a minimum of two shareholders, and both shareholders must be individuals. This structure is more traditional and offers some benefits in terms of transparency.
What are the Tax and Customs Benefits in UAE-Free Zones?
0% Corporate Tax on Qualifying Income:
Most Free Zones in the UAE offer a 0% corporate tax rate on qualifying income. This means that businesses will not have to pay any corporate tax on their profits as long as they meet certain criteria.
These criteria can vary depending on the Free Zones, but they typically include requirements such as the business being majority foreign-owned and its activities being limited to the Free Zone.
5% VAT in UAE Free Zones:
In the UAE, Free Zones are often treated as “Designated Zones” for VAT purposes. While VAT is generally levied at a standard rate of 5% in the UAE, these Designated Zones are considered outside the UAE for VAT purposes under certain conditions.
This means that VAT may not apply to specific types of transactions within these zones. However, businesses established in such zones may still need to register for VAT if the criteria for registration are met.
100% Exemption from Customs Duties:
Businesses located in a UAE Free Zone are typically exempt from customs duties on imports and exports. This can be a significant advantage for businesses that import raw materials or export finished goods.
No Restrictions on Repatriation of Profits and Capital:
Businesses operating in a UAE Free Zone can freely repatriate their profits and capital. This means that there are no restrictions on how businesses can move their money in and out of the country.
No Withholding Taxes on Dividends and Interest:
There are no withholding taxes on dividends or interest paid by companies located in a UAE Free Zone. This can make UAE Free Zones an attractive location for holding companies and investment vehicles.
What Facilities does your Business Require?
Planning for the Future:
Consider your future growth while choosing a Free Zone in the UAE. Do you need a co-working space now and a bigger office later? Remember, most Free Zones may require physical space for licensing purposes.
Beyond the Office:
If you need warehousing, production facilities, or employee accommodation, narrow down your search to Free Zones offering those. Nonetheless, a business setup in Dubai Free Zones would be an ideal option.
How important is the location?
- Access is key! For import/export businesses, easy access to airports and seaports is crucial.
- Financial district dreams? Consider a business setup in Dubai Free Zones – such as the bustling financial hub like DIFC for proximity to banks and financial institutions.
What About Budgets and Banking?
Cost Comparison:
Each Free Zone has different licensing and visa fees. Factor in setup costs, operational expenses, and the number of employees you will have. Don’t get hung up on which is the cheapest Free Zones in Dubai or anywhere in the UAE. Rather, consider the long-term growth potential and support offered.
Smooth Sailing for Your Finances:
Opening a corporate bank account is essential. Choose Free Zones with a good reputation with local banks to avoid any headaches.
What networking opportunities are available?
Your Business Growth Partner:
Some Free Zones are like startup fairy godmothers, offering networking events, conferences, and trade shows to help your business flourish. If your business goals align with them, you should choose a Free Zone that offers such events.
Talk to the Locals:
Existing businesses in your chosen zone can provide valuable insights into the business environment and support available.
Top 10 Free Zones in UAE (With Estimated Company Setup Costs)
Always remember that these are estimated costs and may not reflect the final cost for your specific business needs. It’s always best to contact a business setup consultant – like Corp Creators or the chosen Free Zone Authority directly for the most up-to-date details and pricing information.
For more information on company formation in Free Zones or even business setup in mainland Dubai, talk to our experts! Book a free consultation today!
