Most investors in the past used to consider Freezone options in order to get the 100% ownership. We all know that the new FDI update has now given an opportunity to expatriates to set up businesses for over 1000 activities. This has surely made it less attractive to consider UAE Free Zone options.
We have already discussed some factors you need to consider when selecting between a UAE freezone and mainland company, here we would like to highlight some of the reasons why UAE Free Zones are still a great option for investments.
We have curated a list of reasons why investing in UAE Free Zones are still attractive:
1. Are you looking for a special company ownership structure?
Some UAE Free Zones offer the option to structure your corporate ownership in special ways. For example, a SPV is an interesting option that is available to investors. It is also incredibly useful if you would like to have a holding company, holding assets and companies.
UAE Free Zone options are also suitable when structuring a succession planning as well.
2. Everything in one place
When you approach a freezone, they have a package for your licensing requirements. Most of your requirements can be taken care of in one place itself. This includes visa, paperwork, office or warehousing options, and so on. Making it slightly easier to run the company.
3. No Corporate taxes
There are no corporate taxes or personal taxes in the UAE Free Zones. It is true that right now, there are no taxes in the UAE mainland as well. However, corporate tax is surely on its way. Keeping that in mind it might be a good idea to have your license setup in one of the UAE Free Zones for future tax benefits.
4. No Sponsor or Local Service Agent Needed
Some activities in the mainland even though you may get 100% ownership, however, you may need to have a local service agent involved, and in some activities you may not even be able to get the 100% ownership as well. In UAE Free Zones this will not be required. You will have complete control of the company.
5. Save on Customs Duty
Having a company in the freezone allows for having some customs exemptions. You not only get easy access to the ports but can also import and store the items in your own warehouse and not have to pay the 5% duty on it. This is very useful for businesses that do a lot of import and re-exports.
What this means is that although setting up a company in the mainland is a great option, UAE Free Zones still have their own advantages. You need to assess which option best meets your requirements. For some it might make sense to set up two licenses, one in mainland and one in the freezone, this will give them the best of both worlds.
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