Free zone Company:
Primarily, free zones are established to serve as a central business hub for companies to conduct global business and not specifically within the UAE. Therefore, UAE free zone companies are meant to operate within the corresponding free zone as a hub for worldwide operations and are not licensed to operate within the rest of the UAE. According to the World Federation of Free Zones, a free zone is a portion of clearly defined and isolated land or setting, with a special tax, customs and import regime, usually involving the status of extra-territoriality.
Technically, trading within UAE is not allowed as free zones are not considered part of the UAE market. However, you can appoint a local dealer or agent and trade with any local company in the UAE after payment of required customs duties. Some of the features of free zones in UAE are:
- No corporate or personal tax
- No Import / Export duties
- No restriction on hiring foreign workers
- Most free zones offer land and the assets developed on the land can be mortgaged to bank or financial institutes as collateral
- All UAE free zones are built with state of the art infrastructure
- 100% foreign tax free
- 100% ownership, no local national involvement required
- Liberal multi-currency
- bank account opening and maintaining
- Warehouse facilities & virtual office facilities
- Common facilities at free zones
- Offers UAE residence visas for investor and his/her family
- Attractive business environments and user-friendly free zone authorities
- Quick incorporation
Types of Free zone companies:
- Branch of the Company
A branch office of foreign company can be set up in Free zones. No capital is required to set-up a branch of an existing company.
- Free Zone Establishment (FZE)
An FZE is an establishment formed & registered within the free zone & regulated by the free zone authorities. Their liability will be limited to the amount of paid up capital. An FZE need to have a single shareholder (individual or a foreign company) and is an independent legal entity.
- Free Zone Company
FZC is registered with a free zone authority & does not require any local citizen as a shareholder. Minimum of 2 and maximum 5 shareholders are permitted in FZC. FZC’s are limited liability companies.
Some restrictions relating to registration of companies in FTZ apply thereto. For instance, in case of retail trading at the local market of the UAE.
There is a particular type of company for each type of business that best matches its objects and the most optimal in terms of costs, taxes, customs fees and other expenditures.