One of the many reasons the UAE has become a popular choice for companies to incorporate in the GCC is the growth of freezones. Freezones are specific geographical areas that are self-governed and have exceptions when considering tax, imports and customs. These areas have several benefits compared to other jurisdictions:
- 100% foreign ownership of the enterprise
- 100% import and export tax exemptions
- 100% repatriation of capital and profits
- Corporate tax exemptions for up to 50 years
- No personal income taxes
- Profits and capital are fully repatriated
- Assistance with recruitment, and additional support services, logistics, shipping, housing and transport
Currently, there are 45 operational freezones in the UAE with 6 more already planned and under construction.
Number of freezones in each Emirate:
Dubai – 22
Abu Dhabi – 7
Sharjah – 6
Ras Al Khaimah – 5
Fujairah – 2
Ajman – 2
Umm Al Quwain – 1
In comparison to the mainland, generally freezones offer a less expensive and more straightforward company set up and renewal process. Each freezone is designed around one or more business industry categories and only offers licences to companies within the stipulated. For example – Dubai South is home to Dubai Logistics City (DLC) and Al Maktoum Airport (DWC), thereby making it an attractive location when considering aviation and logistics business activities. If a business is considering access to shipping services and the sea ports, then Jebel Ali Freezone Authority (JAFZA) would be the freezone of choice. Dubai Internet City (DIC) is home to the likes of Microsoft and Dell, hence this kind of affiliation with clients and intermediaries brings a certain status and security to the future of a company.
An independent Freezone Authority (FZA) governs each free zone and is responsible for issuing Free Trade Zone (FTZ) operating licences and assisting companies with establishing their business in the FTZ. Investors can either register a new company in the form of a Freezone Establishment (FZE) or simply establish a branch or representative office of their existing or parent company based within the UAE or abroad. An FZE is a limited liability company governed by the rules and regulations of the Freezone in which it is established. Except for acquiring nationality in the UAE, the provisions of the Commercial Companies Law (CCL) do not apply to FZEs, provided that the freezones have special provisions regulating such companies. Find out about the differences between each company type in the UAE.
Dual Business Licence
There are a few freezones in UAE that offer Dual Business Licences for investors. It will allow them to do business in the freezone as well as in the mainland of UAE using the same business licence. One such example is the Dubai World Trade Centre (DWTC), which offers a dual licence, enabling investors to easily offer services in the mainland and freezone together. With corporation tax due to be implemented in the mainland from 1st of June 2023, CBD predicts an increasing interest in freezone company formations, especially as investors are considering their long term corporate structures.
Dubai Multi Commodities Centre Authority (DMCC)
Seven times crowned ‘Global Free Zone of the Year’ by the Financial Times FDI magazine, it is home to a community of different companies and comes with its own innovative infrastructure, services and spaces, all minutes from air, sea and road links to the world.
Dubai South
Dubai South was realised as a continuation of the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
Spanning 145 square kilometres and home of Al Maktoum International Airport, Dubai South was established between Dubai and Abu Dhabi as well as in proximity to the Jebel Ali seaport to act as a keystone of the bridge that connects the region and the world.
Khalifa Industrial Zone Abu Dhabi (KIZAD)
Known as the industrial hub of Abu Dhabi, KIZAD’s infrastructure provides the necessary internal transportation, as well as water and electrical power at a competitive rate. With trade and logistics, and manufacturing at the core, KIZAD creates value through integrated service offerings that span aluminum, steel, metal products, paper and packaging, food processing, pharmaceutical and healthcare equipment, polymer converting and automotive spare parts.
Ras Al Khaimah Economic Zone (RAKEZ)
Situated in the heart of Ras Al Khaimah, RAKEZ is a business and industrial hub in the UAE that offers customisable solutions to freezone and non-freezone businesses in over 50 industries, follows an international best practices and enforces an effective compliance framework.
To know more about how CBD can assist you with company formation in the UAE, freezone setups or provide support regarding Dubai visas, UAE PRO services and UAE payroll, send an email to: enquiries@cbdcorporateservices.com