In the contemporary business world, free zones are one of the main options that entrepreneurs resort to to establish their companies because of the exceptional advantages they provide. Free zones are an ideal environment for business thanks to the tax exemptions and facilitating legislation they provide, in addition to easy access to global markets and advanced infrastructure. Establishing a company in a free zone offers great opportunities for growth and expansion, making it an attractive option for investors seeking to expand internationally. This introduction highlights the key benefits of free zones and sparks curiosity to learn more about how to get started on this exciting business journey.

 

Establishing a company in the free zone

New companies wishing to establish their businesses in the free zone enjoy greater flexibility in choosing their own and multiple commercial activities or service activities that are compatible with the nature of their work. This is in addition to what distinguishes this region (Dubai Free Zone) in terms of tax exemptions, and this is one of the biggest attractive factors for many new contractors. This contributes to revitalizing investors’ experience and motivating them when convening or establishing companies in the free zone and conducting their business there.

How to establish a company in the free zone

It is now possible for any person, regardless of his financial ability or who sets a financial budget for him, to establish and establish any investment project in the free zone or establish a company in Dubai. He can now establish any project or provide any investment service in the free zone, due to the multiple needs of the UAE and also due to the ease of Providing the requirements and methods for establishing investment projects there, but it is necessary to know the basic steps in establishing a company in the free zone, which are as follows

Determine the nature of the company’s activity

Determining the nature of the new company’s activity in the free zone is considered one of the most important procedures imposed by the UAE law regarding the establishment of companies of 2009 in Dubai. This is based on facilitating the procedures. It also determines the parties associated with the company’s activity and the legal forms allowed within the new company. There are approximately twenty thousand economic activities permitted in the UAE. Economic activities are classified into three main types:

1. Commercial activity (real estate, leasing, transportation, transportation, financial intermediation, wholesale, retail, storage, and communications).
2. A professional activity that is specific to (agriculture, health, social work, education, and various service activities related to society, that is, any activity that depends on
3. Physical and mental activity to practice).
4. Industrial activity specializes in (transforming industries such as mining, water, electricity, and quarrying). There are also some tourism activities.

Determine the legal form of the company

Here comes the role of determining the legal form of the new company that will be established, but this form depends on the nationality of the company’s owners, and the legal form of the company that you plan to establish in Dubai, which are as follows:

1. Joint companies.
2. Limited liability companies.
3. Public joint stock companies.
4. Private equity companies.
5. Civil works companies.

 Trade name registration

The third step of establishing companies is determining the trade name in establishing a company in the Emirates, which is considered what distinguishes a commercial license from another license. The trade name of the new company is also related to the form and activity of the commercial company, and this is achieved by several important conditions stipulated by the Department of Economic Development. Before her approval of the name, the trade name must be that the company’s trade name does not contain inappropriate words, that it does not contravene public and private taste, and that the trade name reflects the commercial activity accurately and clearly.

Obtain initial approval

After determining the company’s legal activity, determining its legal form, and registering its trade name, it is now necessary to obtain initial approval from the competent authorities for the company’s economic activity and follow up to obtain the approval of the authorities related to the activity.

Preparing the articles of incorporation and choosing a location for your business

Here comes the moment of preparing the contract designated for establishing a company in the free zone. This is done by bringing the incorporation contract in agreement between you and the competent authorities in the free zone. You must also choose a location to establish the company in the free zone or establish a company in Jebel Ali to proceed.

Obtaining approvals from the authorities concerned with the facility’s activity

Some commercial activities require obtaining some additional approvals from the competent authorities in those projects concerned with them, such as approval from the Ministry of Economy, approval from the Ministry of Interior, or from the Ministry of Justice, and specialized approval from Civil Defense if the activity, for example, is related to firefighting equipment activities, etc.

Obtaining the license

After completing all the previous steps to prepare and establish a company in the Dubai Free Zone, you can now receive the commercial activity license and attach some papers and documents related to the company and to you, including the steps for economic development and paying the company’s commercial license fees, and then after registering in the Chamber of Commerce as a member.

Costs of establishing a company in the free zone

The costs of establishing a company in the free zone are mainly limited to several expenses, which are as follows:

1. The cost of commercial license expenses to practice legal activity (license to practice business)
2. The cost of purchasing a site or office space or the company through which you conduct your business, whether renting or purchasing.
3. The cost of purchasing furniture and decorations for the office where you do your business.
4. The cost of obtaining permits (work permits for sponsored employees) and visas required for them under your current company name.
5. The cost of opening a new account in the name of the company in a bank to deposit the minimum capital according to the type of commercial activity of the company.
6. The cost of determining the legal form of the company plays a fundamental role in whether the cost increases or decreases. Finally, the cost of the commercial license.

Documents required to establish a company in the free zone

To establish a company in a free zone, the required paperwork usually varies slightly depending on the type of company and the free zone itself, but here are the basic papers that are often required:

1. Registration application form: contains company information such as name, business activity, address, and shareholders.
2. A copy of the articles of incorporation: A document that specifies the company structure, types of shares, and shareholders.
3. Passport and residence: for major shareholders and directors.
4. Business plan: A document that explains the company’s goals and future plans.
5. Certificate stating that there is no legal impediment: This means that there are no legal problems hindering the establishment of the company.
6. Bank certificate: to prove the capital required to establish the company (requirements may vary depending on the free zone).
7. Other declarations: The free zone may require additional documents such as work permits if the company plans to hire workers.

These papers represent the basis, and it is possible that you will need additional documents according to the requirements specified by each free zone. It is always necessary to check with the relevant authorities in the selected free zone to ensure that all conditions and requirements are met before starting the incorporation process.

In free zones, commercial licenses are issued to establish companies after submitting all necessary documents and fulfilling the required conditions. The commercial license is the official document that allows the company to conduct commercial activity within the free zone. The basic steps to obtain a business license include:

1. Submit a company registration application form and submit it to the competent authorities in the free zone.
2. Submit all required documents as mentioned previously, such as articles of incorporation, passports, legal succession certificates, and financial certificates.
3. Pay the fees required to obtain a commercial license.
4. After receiving the documents and fees, they are reviewed by the relevant authorities, and if approved, the commercial license is issued.
5. After approval, the final commercial license is issued that allows the company to start work.

All documents must be submitted based on the official form provided by the competent authorities in the free zone. It is also always recommended to check with local authorities to find out the exact requirements and procedures needed to obtain a business license in each specific free zone.

At the conclusion of this article, we realize that establishing a company in a free zone represents an important strategic step for those wishing to expand their business internationally. Free zones provide an ideal environment for business thanks to tax exemptions, advanced infrastructure, and easy access to global markets, making them attractive to investors and entrepreneurs alike.

To ensure the success of the process of establishing a company in a free zone , investors should carefully study the market and local requirements, and ensure that all documents and conditions required by the relevant authorities are met. With good planning and making the right strategic decisions, companies can greatly benefit from the advantages provided by free zones to achieve sustainable growth and outstanding financial success.

Frequently asked questions about establishing a company in the free zone