A single-member limited liability corporation that can be formed in all UAE Free Zone is Free Zone Establishment (FZE). The Free Zone Company (FZC) is therefore similar to the multi-shareholder incorporation (maximum 5 shareholders) (maximum 5 shareholders).
The primary attraction for establishing an enterprise in the UAE free areas is that there are no limitations on foreign ownership and that enterprises are regulated by an autonomous Free Zone Authority (FZA), which is responsible for approving operational licences and regulating businesses within the Free Zone.
Significant features of the Free Zone Company
Not only common persons but legal persons such as corporations can integrate Free Zone company in Dubai. FZC is a limited liability company. After incorporation/registration, FZE/ FZCs, including branches of local or international corporations, would have to obtain the Free Zone Certificate.
The only shareholder business would be an FZE. A multi-partner FZC with 2 to 5 shareholders will be created. The fiscal years shall be from January through December of each year, with the exception of the beginning of the first year which would be the date of implementation. Without any previous written consent of free zones, the share is not transferrable.
Benefits Of Free Zone Company In Dubai
There are several free zone company advantages. Some of them are among the most impressive.
- 100% ownership despite UAE sponsorships assistance
- Exempted from the personal income tax and capital gain tax.
- Full capital resettlement and company income
- Minimum duty for import/export
- Corporate tax zero per cent
- No currency travel limit
- Organisational facilities single-window clearances
- Quick licencing and establishment of businesses
- Laws and regulations stable and clear
- Effective contact system, complete infrastructure
- High operating and start-up costs
- Visa restrictions on recruitment are not implemented under the liberal labour laws
- Access to the technical pool
- Structures – pre-constructed offices, mills, warehouses
- Support services for businesses with fast and successful operation by pressing a button
- Further programmes like sponsoring, on-site accommodation and job aid
- Modern multi-level data centre IT infrastructure
- Quick access to transport networks for air, rail and road
- A lovely work setting
- Functioning capacity 24/7
Requirements to set up a Free zone company in Dubai
Investors may either register a new company as a Free Zone Establishment (FZE) or a Free Zone Company (FZC) – one shareholder has one FZE and two or more shareholder has two or more FZCs – or just set up a branch or office of their current or international parent company in the UAE or elsewhere. A limited liability corporation is an FZE or FZC that governs its formation under the rules and regulations of the Free Zone. The UAE Commercial Company Law (CCL) regulations are not applicable.
In order to start the establishment of the company Free Zone, it requires all shareholders/directors of the proposed new company to have the following documents and due diligence:
- Copy and UAE/UAE entry stamp Approved Passport copy (if non-resident)
- 2 x Address proof (dated within 3 months)
- Letter of reference from a bank or any professional
- Curriculum Vitae (summary of professional history)
- Owner’s personal details
- Reference of the Bank (Original) (Original)
- Letter of appointment of the manager (Notarized) with his copy of the passport and attorney’s office.
For individuals –
- Incorporation/Company Registration Certificate. Bank’s letter of reference to the company’s creditability (Notarized)
- Bank’s letter of reference to the company’s creditability. Letter of appointment for the executive director, with his specimen signature (Notarized) (Original)
- Letter of appointment for the executive director, with his specimen signature (Notarized).
- The Free Zone will prepare the licence upon signing the Facility Lease Agreement and Personal Secondments.
The Free Zone issues the licence and all related paperwork upon payment.
Free zone company rules and regulations
Free zones companies formation in UAE happened but in each respective emirates, they are governed by local governments. Every free zone, therefore, has its own set of guidelines and constraints.
In general, a business registered with a free area is not allowed to operate outside of the free zone, i. e. On the mainland.
If the company wants to expand its operations on the mainland, however, the respective free zone jurisdiction must grant it an initial authorization. Then in order to satisfy licencing criteria, the business could contact the local Economic Development Department in the respective emirates.
You are required to comply with the rules, as a responsible entrepreneur
- Regulate your company
- protecting the interests of employees, users, and Intellectual property rights
- safeguarding health and wellbeing and also protect the climate
- manage the free area where your company is built
The free zone authority in which your business is formed and in some cases additionally may be regulated by another government body may rule your business. Your company will also be regulated by strict laws about the type of business you do.
Labour rules, consumer rights and intellectual property rights
The UAE has unique regulations to safeguard the interests of employees, customers and IPO. It is up to you as a company owner, to amend yourself and comply with the rules. Under the respective legislation and courts, failure to abide by the law could lead to penalties being applied.
Free zone Company’s legal minimum requirements
Free Zone Company (FZC) should comply with the Rules and Regulations for FZC implementation. The Enforcing Regulations and Rules of the FZE are equivalent to their Memorandum and Articles of Association, in that they equivalent to their Articles of Association as FZC implementing rules.
Every year, within 3 months from the end of the fiscal year, FZC shall send its audited financial statements to the UAE Free Zone Authority. Minimum 2 directors and a secretory are required for the free zone company auditing. A single person can hold the offices of Director and Secretary.
Please keep in mind that, depending on the business activities of the proposed new company, some Free Zones can request a comprehensive business plan.
The company shall lease premises or land and obtain a Free Zone Authority (FZA) Operating License once the legal presence has been established in a free zone. In the various free area categories, different licence types are applicable. Trade and industrial licence companies are allowed to only work inside or outside the Free Zone. A UAE official agent and a joint venture must be formed if goods are to be sold in the UAE.