Today, Dubai is considered to be one of the most open, dynamic and growing cities in the world. One aspect of its growing economy is providing flexible platforms for investors and businessmen. Creation of free zones was a big step of Dubai towards becoming a successful business hub. It paved a way for freezone company formation.
WHAT IS A FREE ZONE?
Free Zone is an area with special customs where companies are taxed very lightly or not taxed at all. The idea behind the creation of such zones is to encourage the foreign investment and trade. Among all the benefits of setting up a business in the free zone is 100% business ownership besides incentives and tax relaxation. Leveraging this new platform of business development and economic growth, many countries around the world have already created many free zones and turned them into successful business hubs. MENA region tops the list of a number of free zones and the free zones in the United Arab Emirates are among the best in the world.
FREE ZONES IN DUBAI
There are about 20 free zones in Dubai, and more are expected to come. Every free zone offer different types of service and each zone has its own framework of rules and regulations. Also, each free zone is governed and managed by a free zone authority. A free zone is designed around a specific type of business category and has its own sector preferences and their facilities. For example, main activities in Dubai Airport Free Zone include import, export, manufacturing, processing, assembling, packaging, distribution, storage and logistics. Similarly, Dubai Healthcare City is a hub healthcare businesses and Dubai Internet City caters to web-based services, software development and IT support services. Various free zones of Dubai are listed as under:
1. Dubai Airport Free Zone
2. Dubai International Academic City
3. Dubai Healthcare City
4. Dubai Cars & Automotive Zone
5. Dubai International Financial Centre
6. Dubai Knowledge Village
7. Dubai Media City
8. Dubai Gold & Diamond Park
9. Dubai Internet City
10. Dubai Multi Commodities Centre
11. Dubai Silicon Oasis
12. International Media Production Zone
13. Jebel Ali Free Zone
14. Dubai World Central Business Park
15. Dubai Academic City
16. Dubai Biotechnology and Research Park
17. Dubai Industrial City
18. Dubai Technology and Media Free Zone
19. Economic Zones World
20. Dubai Outsource Zone
ADVANTAGES OF SETTING UP A BUSINESS IN DUBAI FREE ZONES
There are many benefits of setting up your business in a free zone. Some of them are listed here:
1. No sponsor is required. Normally for setting up a business in Dubai, a local sponsor is required who own 51% of the company. That is 100% foreign ownership.
2. Relief from corporate taxes
3. 100% repatriation of income tax
4. Relief from import and export tax
5. 100% free transfer of funds
6. 100% repatriation of capital and profits
7. State of the art IT infrastructure
8. Low operational cost
9. No currency restrictions
10. Fast track business licensing and registration process
11. Pre-built offices, factories and warehouses
12. Inexpensive workforce, support services and easy recruitment procedures
13. Abundant & inexpensive energy
14. Option of operating for 24 hours a day
LIMITATIONS OF SETTING UP A BUSINESS IN DUBAI FREE ZONE
With so many benefits of business set up in a Dubai free zone, there are some limitations too. A free zone company cannot directly trade with UAE market. However, a free zone company can trade within UAE through local distributors with an application of 5% custom duty.
PROFESSIONAL ADVICE FOR BUSINESS SET UP IN DUBAI FREE ZONES
As discussed already, different free zones of Dubai benefit different business categories. While choosing a location, it gets very important to take an advice before deciding on business set up at a particular free zone. After all your business location should match your business objectives (both long term and short term goals). Also, different free zones have different capital requirements. Al Taresh business consultants offer professional advice about choosing a perfect business location besides help in business registration licensing process.