The Advantages Entrepreneurs Get by Setting up Business in UAE Free Zones

If you are planning to start a business and want to learn the main benefits of starting a business in the free zone of the United Arab Emirates, you have come to the right place. However, before you understand the benefits of starting a business in the UAE, there are some important facts that you should pay attention to about starting a business in the UAE. Over the past few decades, the UAE government has played an active role in attracting foreign investment to Emirates from all over the world. The visionary government, pro-business policies and entrepreneurial spirit of the UAE people are the main reasons for the UAE’s economic progress.

The taxes and other financial benefits that the government offers to foreign investors are numerous. . When starting a business in the UAE, investors must choose one of 3 jurisdictions based on their business, clients and goals. Starting a business in this jurisdiction has its advantages and disadvantages. In this blog, we will briefly understand free zone jurisdiction and the benefits that come with it.

What are the Free Zones in the UAE?

Free zones are areas or special economic jurisdictions that issue permits to run companies and provide financial and tax exemptions. In total there are more than 40 free zones in 7 emirates. The Free Zone Authority or FZA is the administrative authority responsible for the main activities related to the operation and licensing of free zones. Investors can set up 3 types of business entities in the UAE Free Zone which are listed below.

Free zone company (FZC)
Free zone establishment (FZE)
Branch of a business concern

Benefits of Forming a Free Zone Company

Now let’s get to the heart of the matter. The benefits of starting a business in the UAE free zone are listed below.

100% Foreign Ownership

One of the most obvious advantages of setting up a free zone business in the UAE is that it allows full foreign ownership. This means that foreign investors do not need to look for a UAE national sponsor to start a business. Foreign ownership is possible regardless of the nationality of the investor.

None Currency Regulations

Currency regulation refers to currency restrictions imposed by the government on foreign exchange transactions. There are no currency regulations in the UAE Free Zone. This makes financial transactions easier.

Duty Exemption on Import and Export

Import and export duties do not apply to UAE Free Zone jurisdictions. It helps promote international trade.

Tax Benefits

For companies in the free zone, a 100% tax exemption applies. This includes income tax and corporate tax.

Repatriation Benefits

The company is entitled to full repatriation service. And that includes profits and financial assets.

Smooth Labour Recruitment

Companies in the free zone can complete the formalities for hiring workers easily and cheaply. The company has the right to employ foreigners.

Availability of Workspaces

Warehouses and serviced offices in Dubai are easily accessible in the free zone area. UAE Free Zone ideal for SMEs and start-ups

Ease of Company Incorporation

The procedure for setting up a business in a free zone is simple and clear. because You can complete the licensing process in a few days compared to other jurisdictions.

Hassle-Free Immigration Procedures

Immigration facilities connected to the UAE Free Zone are efficient and hence save time.

Extraordinary Communication and Modern Infrastructure

The UAE free zone has the most modern communication system with perfect infrastructure. The free zone enjoys cheap and abundant energy.

Drawbacks Connected with UAE Free Zone Jurisdictions

Not all of them support the formation of free zone companies in the UAE. Because Investors should also be aware of these restrictions. These restrictions are listed below.

Restrictions Connected With UAE Mainland Trade

Direct trading in the local UAE market is strictly prohibited for companies based in the UAE Free Zone jurisdictions. If a UAE Free Zone company wants to trade on the UAE market, trading is only possible through local traders. Because, For the sale of goods or goods in the UAE local market, the company has to pay 5% duty in the free zone.

Business Activity Related Restriction

There are also certain restrictions on the type of business. Moreover, The UAE Free Zone is defined by a specific business activity or group of business activities. Therefore, companies established in certain free zones must carry out the assigned economic activities. It’s the best time to start a business in Dubai Free zone.