Factors to Take into Account When Selecting a UAE Free Zone
Understanding permissible Business Activities: It’s important to review the list of permissible business activities in the free zone you’re thinking about before moving further. Make sure the zone permits the kind of business you wish to run. Verify whether there are any limitations or unique specifications for particular sectors.
Flexibility in Business Licensing: Take into account how simple it is to get the required licenses in your preferred free zone. Examine the procedure for future expansion or modification of business activity. A flexible free zone will aid in the expansion and future diversification of your business.
Investigate free zones designed for that industry if your company works in a specialized zone for a specific market. Being surrounded by companies that share your interests may promote networking and encourage collaboration. These areas frequently provide incentives and perks tailored to the business.
Facilities and Infrastructure in UAE Free Zones
- Location and Accessibility: The success of your business depends on the free zone’s location. Take into account how accessible it is for clients, customers, and workers as well as how close it is to important transit hubs. Analyze its accessibility to important markets and cities as well.
- Physical Infrastructure: Evaluate the free zone’s built-in infrastructure’s level of quality. Verify the accessibility and dependability of necessities like water, power, and internet connectivity. For activities to run well, infrastructure must be adequate and dependable.
- Facilities and Services Provided by Free Zones: Seek for free zones that provide more than simply office space. Think about the accessibility of amenities like business centers, conference rooms, and exhibition halls. Check for other support services, such as accounting, HR, and legal help.
- Customs and logistics assistance: For companies that import and export products, effective customs processes and logistical support are essential. Look at the warehousing and cargo-handling possibilities, as well as the customs facilities and logistical services offered by the free zone.
- Technology and innovation: In the current digital era, technology and innovation are crucial for corporate expansion. To promote innovation and advancement, find out if the free zone offers technological parks, research and development facilities, and incubation facilities.
Your selected business activity will largely determine the ideal free zone for you. This is the case because each free zone conducts particular business activities. In addition, only a limited number of business activities are permitted in the free zone with a business license. If you choose to conduct additional commercial activities, the cost of your license will rise. In certain instances, you may be required to obtain more than two business licenses for a single enterprise. Want to avoid incurring additional fees? You can accomplish this by selecting multiple activities from the same license category and activity group.
The following common categories of business licenses are permitted in free zones:
- Business (trading) certificate
- License for consulting services
- License for production (manufacturing)
- Electronic commerce registration
- General Trading permit
- Media permit
Exploring the Potential for Economic Expansion and Advancement in the United Arab Emirates’ Free Zones
Investment Requirement
In order to register a company in the United Arab Emirates, you must deposit the share capital. And each autonomous zone has its own minimum deposit requirements for share capital. The authorities of the respective open zone will be able to provide you with the threshold. Your business activity will determine how much of your capital will be deposited.
Facility Class
The selection of an open zone also depends on the number of employees and the nature of the enterprise. In free zones, you can lease or purchase office and warehouse space. Additionally, a business is only permitted to have a facility within the free zone where it is registered.
You must consider the infrastructure, location, and availability of facilities within the free zone of your choosing. Not all autonomous zones provide facilities like retail stores and warehouses.
Choosing a shared or Flexi-desk at a co-working space is appropriate for those who wish to establish a modest business in the Emirates over the course of several years. If you are considering expanding your business, which involves daily employee hiring and direct client meetings, you should choose office space in a distinct physical location.
Total amount of UAE Residence Visas
The number of UAE residence cards needed will also affect the choice of a free zone. Foreigners who want to start a business or company in the UAE need to get a UAE residence visa from the right government. If any of your workers are not Americans, they will also need residence visas. The number of visas will depend on how your location is classified. Also, each autonomous zone has its own cap on visas. People who do business in the Northern Emirates can get more than one visa. But if your business is in Dubai and you have a place where people can share a desk, you can get two or three visas. Visas also have space limits. One UAE residence visa is given for every 9 to 10 square meters of office space.
Legal Entity Class
Each free zone can only register a particular form of business entity. Similarly, Free zone authorities have their own set of regulations regarding the form of legal entity a business owner may register for his or her company. You may choose to incorporate your company as:
Free Zone Organization (FZE)
Free Zone Limited Liability Company (FZ LLC) and Free Zone Corporation (FZ Co) are both legal entities that operate within the Free Zone.
Legal entity type determines the maximum number of shareholders your company can have. The limitation also depends upon whether the shareholder is a legal person or a natural individual.
Nationalities of Investors
Additionally, a free zone has its own restrictions for certain shareholder nationalities. Therefore, before choosing an open zone, you should investigate its nationality restrictions. In Dubai’s free zones, it is permissible for a company’s shareholders to be of exceedingly risky nationalities.
Location of the Free Area
Numerous enterprises are most concerned with the location of the free zone. This is particularly true for businesses engaged in imports and exports. Some free zones are located near airports, whereas others are located near seaports. On the basis of air, land, and sea connectivity, their primary objective is to facilitate and expedite access to target markets in Africa and Asia. The proximity to strategic transportation routes and key stock exchanges is also crucial for companies engaged in trade, manufacturing, or logistical operations. Selecting a free zone with a strategic location will help you save money.
Competitor Evaluation
Choosing the economic zone also necessitates a thorough and comprehensive analysis of competitors. Determine where your competitors are conducting business before settling on the free zone. Some free zones also require annual audit reports to be submitted when registering your company. Before registering your business, ensure that you have all the necessary paperwork, including financial records. If you submit your annual audit report on time, you can also experience a plethora of advantages.
