Everyone will agree that Dubai and the UAE are the global business destinations with all the necessities to set up a company, including an investment-friendly environment, framed laws, and specific regulations to lead the way for the company’s prosperity.
Moreover, free zones are among the factors that make Dubai a business lighthouse in the region and worldwide. In this article, we will provide a comprehensive answer to the question: “What does free zone mean in Dubai”. Also, we will discover the benefits of business in Dubai free zones and the famous free zones of Dubai.
So, let’s find out the details of these specialised free zones and their range of benefits for fintech startups and companies:
What Are Free Zones In Dubai?
Firstly, free zones are not only limited to Dubai; they function across Dubai and the UAE. Therefore, Dubai is popular and offers an obvious option for investors seeking lucrative investments.
So, let’s answer the main question: What does free zone mean in Dubai?
Free zones in the UAE generally function as phases of an international investment project to establish freehold industries and provide investors with facilities for organising their activity. A Free Zone, a Free Trade Zone or an authority of a Free Zone is an economic area subject to its own rules that do not apply to businesses outside the zone.
Moreover, free trade zones diversify the economy and attract more foreign investors to Dubai and UAE in general, so that they can start up a business in an evolving landscape of free zones and profit from it. Jebel Ali Free Zone is the first free zone in the UAE, established in 1985. Now, more than 40 free zones can be found throughout the UAE.
Benefits of Doing Business In a Dubai Free Zone
Free Zones support businesses looking for strategic locations besides favourable conditions for growth. The specialised free economic zone in Dubai often proves to be advantageous for entrepreneurs and investors in several ways:
1. 100% Foreign Ownership
Only Dubai Free Zones provide complete control to foreign investors. Unlike many other regions in the UAE, foreign entities can start their business independently without a local partner within a free zone. It gives international entrepreneurs full control of their business.
2. Customs Privileges
Businesses operating within Dubai Free Zones have customs benefits. Trade processes within these zones are exempted from import and export duties. Moreover, many Dubai free zones offer more streamlined customs procedures. Not only does this make possible efficient international trade or interactions with entities within the same free zone but it also cuts down the operational costs.
3. World-Class Infrastructure
Known for its sophisticated infrastructure, several free zones offer an ideal corporate set-up for companies of all shapes and sizes. These companies have the necessary resources to flourish: modern office spaces, warehouses and advanced facilities.
4. Simplified Setup Process
Company registration in a Dubai Free Zone is relatively easy. The streamline international trade processes within these zones and minimal paperwork requirements make it an enticing choice for startups and entrepreneurs. That’s why businesses in Dubai free zone can start on the fly and focus on their core operations. However, the company registration fees may vary depending on the free zone you choose.
5. Networking Opportunities
Operating in a Free Zone often involves surrounding yourself with other like-minded businesses and industries. It brings entities closer together, enabling collaboration, networking, and knowledge sharing and creating opportunities for growth and development.
6. Diverse Industry Clusters
In Dubai, individual industries are provided in dedicated free zones! It guarantees that businesses find the best environment to succeed. They include Dubai Internet City (technology), Dubai Media City (media and entertainment), Dubai Healthcare City (healthcare services) and Dubai International Financial Centre (financial services).
If you want to open a successful company in the Rakez free zone, contact Xpert Advisory for easy business setup and compliance with free zone regulations.
What is the Right Legal Structure for Your Dubai Free Zone Business?
Three primary legal entities can be established in a Dubai Free Zone, which are as follows:
Free Zone Limited Liability (FZ LLC)
Free Zone Limited Liability Company (FZ LLC) is a common choice for businesses operating within free zones of Dubai. The FZ LLC’s most important benefit is its corporate owners’ limited liability. This results in shareholders not being personally responsible for the company’s debts and liabilities.
The FZ LLC can have both persons or corporate entities as shareholders, and there are no minimum or maximum number of shareholders. This flexibility can be used by all companies in free zones.
A further advantage of the FZ LLC is that it is easily set up and administered. Therefore, it is a good option for businesses that want to conduct a Dubai Free Zone business smoothly and well put together.
Free Zone Company (FZCO)
A Free Zone Company (FZCO) is more flexible than an FZ LLC because there may be more shareholders. Therefore, it is fit for those companies who wish to invite more investors or partnerships. FZCO also offers shareholders limited liability and provides a relatively simple setup.
As the FZCO may wish to manage the interests of more than one shareholder, its governance structures and administrative procedures could be more complex than those of a conventional private limited company.
Free Zone Establishment (FZE)
FZE is the least complex legal entity in Dubai Free Zones. Designed for businesses owned by a single person, either an individual or a corporate entity. Businesses that wish to maintain a great deal of power and not have to deal with the complications of multiple owners can benefit from doing so.
Various factors dictate the type of legal entity that will be appropriate for your business, such as the size of your business, your ownership structure, and business goals. Be sure you think carefully about your business needs and speak to Xpert Advisory legal professionals to see what legal entity suits you within the free zone you choose.
Popular Free Zones In the UAE
Below are some of the most popular Dubai Free Zones you should be aware of to get started with:
Dubai South
The ‘City of You’ is a part of Dubai South, formerly known as the DWC free zone, in which resides the logistics industry. The Free Zone is built around Dubai’s Al Maktoum International Airport and supports many logistics and aviation companies. This Dubai free zone involves various strategic locations that allows direct access to the Jebel Ali Sea Port and Al Maktoum Airport, making transport easier.
The Dubai Multi Commodities Centre (DMCC)
The DMCC free zone is one of the leading cosmopolitan centres and the biggest free zone in the UAE and houses very successful businesses. It also has a high interconnectivity and strong infrastructure trade corridor created for gold, diamonds, tea, food and industrial trade.
Dubai Internet City
Dubai Internet City is tailored for financial technology companies. Moreover, you’ll get many financial incentives if you set up your business in a Dubai Free Zone Internet City. Tech companies have 50 years of tax exemption and no import or export duties on companies trade services and products within the UAE.
Dubai International Financial Centre (DIFC)
Dubai International Financial Centre (DIFC) is the place that has all the infrastructure and support services that every finance business requires. Dubai’s strategic location and simple business set-up of DIFC make doing business far easier for those companies seeking to tap into the global market.
Dubai Healthcare City
Dubai Healthcare City’s free zones have played a big role as an integrated healthcare community, with its economic zone bringing high healthcare and medical education fliers. This specific free zone allows flexible real estate design to suit your business needs.
Understanding each zone’s laws and regulations is very important. Xpert Advisory Consultants will then advise you about the required compliance laws according to the relevant free zone authority.
Free Zone Authority (JAFZA)
Second only to the DMCC free zone, JAFZA free zone offers state-of-the-art facilities. Firms in the manufacturing, industrial, trade and logistics sectors fall in this category. The customs procedures in the JAFZA for imports entering the free trade are due to the very high level of trade conducted in the JAFZA to facilitate better tracking of goods and equipment.
The Dubai Airport Free Zone Authority (DAFZA)
DAFZA is a perfect location for businesses involved in overseas trade, near Dubai International Airport, the world’s busiest airport measured by passenger traffic. Moreover, the DAFZA Industrial Park of the Free Zone has contributed to making transporting and storing goods and cargo a breeze with its amazing warehouse technology.
Other Free Zones
Dubai Media City (DMC)
The Dubai Media City (DMC) was launched in 2001 by the Dubai Media Free Zone authority to encourage and support businesses related to the media, including advertising and marketing services, broadcasting agencies and event management firms.
Since setting up a physical office is not required in the DMC, freelance entrepreneurs can comfortably start up a business in the creative industry.
Dubai Textile City
The textile industry is growing rapidly to be the second largest trading industry after the oil industry. Dubai Textile City Free Zone was a joint venture between Dubai Port and Customs Authority and TEXMAS to make manufacturing and storing textile fabrics easier.
Dubai Silicon-Free Zone
The Dubai Silicon Oasis free zone is a government-owned free zone known as a technology park. Dubai Silicon Oasis company setup offers incubation services in the free zone to new entrepreneurs in collaboration with IT, industrial, research and development businesses, which find the zone truly attractive.
Summary
One must know what does free zone mean in Dubai to reach its vast advantages and understand the competition within these zones. Many free zones of Dubai offer a buzzing business world with advantages such as 100% foreign ownership, tax exemptions, class-leading infrastructure and simplified setup processes. Moreover, selecting the right zone and legal structure for success is essential. When To get expert consulting services for a smooth business setup, contact Xpert Advisory to thrive in Dubai free zones like JAFZA!
FAQs
What Are The Disadvantages Of a Free Zone Company In Dubai?
Direct trade with the UAE mainland market is one of the main drawbacks for a free zone company because you need to hire a local distributor or agent to do so.
Can Dubai Free Zone Companies Trade On The Mainland?
Yes, a person can own a free zone company and the mainland company and conduct business on both, but the company may need proper approval from respective Free Zone authorities of Dubai.
Can a Business Is Transferred from One Free Zone to Another?
Yes, you can transfer your company from one free zone to another, but the procedure may vary depending on the specific free zone and the type of company you own.
