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Company Formation Procedures for Dubai Free Zones

a)      Company Formation Procedures for Dubai Free Zones

Generally, similar regulations apply for setting up companies in the Free Zones all over the UAE with very slight differences from Free Zone to Free Zone. For a foreign company or individual planning to setup a business in Dubai, understanding the company formation procedures for Dubai Free Zones is a plus. Free Zones are the most sought after business setup options by foreign companies or individuals due to reasons such as 100% business ownership, faster registration process and availability of business infrastructure such as office space and telephone lines. Some Free Zones even have amenities like swimming pools, parks and social halls and boast of proximity to strategic points such as airports and residential areas which may make the attractive to investors but also costly to rent.

General Preparations for Dubai Free Zone Company Registration

If you are reading this article then you are most likely interested in setting up a business in the Free Zone. Just like with any business startup you will be required to do a background check of what you need. Here are some tips to get you started:

  1. Do Market Research and feasibility study.
  2. Confirm the requirements of your business
  3. Identifying the best location for your business
  4. Evaluating the various Free Zones in UAE.
  5. Come up with a business plan for your new venture

The license application procedure when setting up a business in Dubai Free Zone

Types of licenses:

The first step is always to determine the type of license that suits your business. The Free Zones offer several types of licenses. They include;

  • Free Zone Trading License.

This license allows you to carryout trade in the Free Zones. It permits buying, selling, importing and exporting three most related categories of goods under your trading license.

  • Free Zone General Trading License.

This license permits a business to deal with almost all types of goods but obviously limiting the trade to legal goods or services and exempting those that require special approval as defined by the UAE laws. It is therefore costlier than the Free Zone Trading License.

  • Free Zone Service/ Consultancy License.

This license is normally for professionals offering service businesses. For example, legal firms and accountancy firms.

  • Free Zone Industrial License.

This license is for industrial companies or businesses that engage in manufacturing, assembling, packaging and processing of goods.

Business Activity Check:

After you have determined the license that is appropriate for your business, you should choose a preferred Free Zone in Dubai. In doing so, a company should know that not all Free Zones allow all types of businesses. Free Zones are business specific and may even have limits as to how many activities a single business can perform in a particular Free Zone. This should also be done against that background of the exact infrastructure your business may need since the Free Zone facilities may not be customized to individual company requirements.

It is also important to confirm the cost of renting space keeping in mind extra charges. Most Free Zones are paid for annually and they attract an annual renewal fee too.

The License Application Documents:

When applying for the license, these are the must have documents;

  • A duly filled Free Zone application form.
  • A copy of your passport
  • Visa copy (if you have an existing UAE visa).
  • Business plan.
  • Bank statements (to prove the capital amount).
  • No objection certificate from the current agent (for UAE residents).

After an application has been received, a background check of the applicant is initiated. Some of the areas that are usually verified include;

  • The Immigration Department: The Free Zone checks with the immigration department to determine your legibility for a VISA or in the case of a company with several workers, they check for each company employee.
  • Environment Department: Depending on the type of license that you have, you will need a clearance certificate from the environmental department. This is particularly required for companies that engage in manufacturing activities.
  • Ministry of Health: You will also need a certificate of health from the ministry of health especially when handling pharmaceutical drugs and food.

Upon paying the fees, you will receive your free zone trading license. The fees vary from license to another and different Free Zones charge different fees. Depending on the Free Zone you choose, some have offers such as processing of a number of free VISAs for companies that take up to some amount of Space in their business premises. They may also give a company additional documents such as certificate of incorporation and share certificates among others.

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