Dubai/UAE Free Zone Companies

A Free Zone Company is more expensive than an Offshore Company and it typically takes 4 to 6 weeks to establish. However, it is an onshore company (with some offshore characteristics). This type of company is ideal for market entry because it will give you the physical presence in the UAE through office space and visas without the need for a local sponsor. A Free Zone Company has offshore characteristics in the sense that all business needs to be carried out offshore/internationally or within the Free Zone itself. 

Yes, all Free Zone companies have a trade licence reflective of their business activity. It is possible to obtain licences for Trading, Manufacturing, Industrial, Consultancy and Services activities and, as mentioned above, most Free Zones specialise in a particular sector.

No, you can only carry out business internationally (outside the UAE) or within the Free Zone itself. You are not allowed to carry out any business on the mainland of the UAE. If your target market is mainland UAE you will need to establish a UAE Onshore Company with a local sponsor. Sovereign can also assist with this.

Yes. Depending on the nature of business, some external approvals may be required from certain Ministries or regulatory authorities for particular activities. For example, an investor looking to set up an educational or training practice may be required to seek approvals from the Knowledge and Human Development Authority (KHDA). If there are no external approvals required, the Free Zone Authority will carry out its own review of proposed business activity during the incorporation process.

Each Free Zone has its own governing authority so requirements vary from Free Zone to Free Zone. However, the majority follow a similar framework. There are two types of companies you can establish in the Free Zone and they are a Sole Establishment (FZE) with one shareholder and a Free Zone Company (FZC) where there are two or more shareholders. Both individual and corporate shareholders are allowed.

A manager must be appointed for the company and this person will be responsible for the day-to-day running of the company and is generally responsible for the operation of the bank account and the signing of any contracts on behalf of the company. For any changes that are made to the company structure, the manager will be required to sign off. The manager must be a UAE resident or have the intention of taking up residency.

That will generally depend on the type of office/premises selected. Between 2 to 3 visas will generally be allocated for a Virtual Office/Flexi-Desk option, while the size of a physical office space will dictate how many visas are allocated (generally 1 visa per 10sq. /m).

It is possible to apply for a Tax Residency Certificate for a Free Zone Company and this can be extremely beneficial if the intention is to utilise the UAE’s network of double tax treaties.

Sovereign can assist with the incorporation of any Free Zone Company in the UAE. For more information on such structures, please contact us.