What is Free Zone in the UAE? Is it a profitable zone to setup new business?
If you are looking to establish a business setup in the UAE, find out everything you need to know about the relevant conditions and procedures in this article.
The free zone
If you do not want to involve any UAE citizen in your business and prefer to have full ownership, the free zone is for you. You may want to consider setting up a business in the free zone, as you will have 100% ownership of the business. Each emirate has its own terms and conditions. This represents benefits such as not having to involve a UAE national partner in your business. Your company will also benefit from an exemption from customs duties and taxes according to the terms of the emirate where you have chosen to create your company. However, you must designate an agent or distributor to sell your company’s products or services along with an approximate 5% tax rate. Free zone companies require less paperwork.
There are no limitations regarding the number of shareholders, their residence or their nationality. A single shareholder may be sufficient and may also be a manager / director. There is no minimum capital requirement nor is it mandatory to “lock” it in a bank account. The companies are adapted to all types of legal activity and activities related to finance, online games, banking or insurance can be carried out after obtaining the corresponding license. A company can carry out several activities. Companies can own real estate in the UAE. The domiciliation of the company in a free zone is necessary. Companies can be managed from another country.
An offshore company created in Dubai does not pay taxes or fees on profits, dividends and capital gains. You simply have to pay a fixed annual fee of a few hundred dollars. Likewise, offshore companies are not required to maintain or present their accounting. Shareholders who create an offshore company are anonymous and their identity is not registered in the local Registry. A “nominee” system can also be established, for both shareholders and the manager. Dubai applies bank secrecy.