UAE Free Zone: What you should consider before setting-up business

If you, like most investors, had your dreams of tapping into UAE’s vibrant business arena derailed by the need to find a local sponsor and adhere to the set percentage (51%) required by law, you don’t have to wait any longer. Setting up a company in UAE free zone doesn’t require you to have a sponsor.

Apart from 100% foreign ownership, you’ll also realize other valuable perks that make the region a favorite for many entrepreneurs. Tax benefits, financial incentives, capital and profits repatriation, modern infrastructure, and other supportive services are some of the highlights that make UAE free zones an ideal investment destination.

While setting up a company in a UAE free zone is easier, cost-effective, and promising as you tap into the lucrative business destination, you need to consider some things to facilitate smooth and profitable endeavors.

Let’s look at some of the must-consider things before setting business in UAE free zones.

Consider the basics

Entity type, activity, license, and name; the basics still apply while setting up a business in a UAE free zone.

There are three entity types; FZE (free zone establishment), branch of a foreign/local undertaking, and free zone limited liability company (FZ LLC/ FZ Co), with the primary variance being the number and nature of shareholders.

The activity you choose is vital as it tells you the license type you need while guiding you on the suitable business name. The good news is that some free zones allow you to run multiple business activities.

The primary license types available in UAE free zones include eCommerce, media, commercial/trading, educational, offshore, warehousing, freelance, services, industrial, and manufacturing.

While choosing the business name, follow the guidelines such as a name that doesn’t violate public morals, have not previously been registered in the free zone, be compatible with your activity, and showcasing your business’s legal form.

Location, location, location

While considering the region, it is not just about its appeal. For instance, you might be considering Dubai free zone but staying away due to the fierce competition fears. However, competition isn’t the only thing you should be considering.

The free zone you chose impacts your business in more ways; for instance, some are dedicated to certain industries, with restrictions limiting what you can or can’t undertake.

For example, Dubai Health City concentrates on the health industry. This means that setting a business in a dedicated free zone lets you enjoy more benefits tailored to enhance that industry.

Suppose the restrictions in dedicated free zones don’t seem to outweigh the benefits in your case. In that case, opting for others that concentrate on multiple industries, such as Dubai Multi Commodities Centre (DMCC), is advisable.

Know the laws

Free zone doesn’t mean that you can do everything you want; it is a no-brainer, but that’s not the point. UAE’s seven states don’t all conform to the same laws. You’ve set a business or are familiar with rules governing Abu Dhabi free zone, but don’t assume that they apply in all UAE zones.

Each state has its laws, and as you set up a company and run your business, knowing them can help you avoid legal complications that could jeopardize your progress.

Enlisting professional services in setting up a company in a UAE free zone is recommendable to facilitate a smooth process. The pros will hold your hand, ensuring that you pick an ideal free zone, follow the rights registration steps, get the license, and observe the laws while running your business.

Setting up a company in UAE free zones is easy if you follow the right steps. Researching before you dive in is advisable, and seeking professional services to guide the process makes it a breeze.