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How to establish a new company in the free zone

١٩ فبراير How to establish a new company in the free zone

How to establish a new company in a free zone? Establishing a new company in a free zone is a strategic option for ambitious investors seeking to benefit from a flexible business environment and promising economic opportunities. Free zones in the UAE provide an ideal investment environment thanks to tax incentives, full foreign ownership, and easy legal and administrative procedures. Establishing a company in a free zone gives investors access to advanced infrastructure and global logistics services, making it a preferred destination for international and local companies alike. In this article, we will discuss the steps for establishing a new company in a free zone , the most important legal requirements, and the benefits that can be achieved from this investment step.

How

How to establish a new company in the free zone

Establishing a company in a free zone requires following specific steps to ensure compliance with local laws and regulations. Here are the main steps to establish a new company in a free zone:

  1. Choosing the right free zone: There are many free zones in the UAE, each with its own advantages and conditions. You should choose the one that suits your type of business and the nature of your company.
  2. Determine the type of company: The company can be either a limited liability company (LLC) or a branch of a foreign company. The type you choose depends on your needs and the size of your business.
  3. Determine the business activity: You must determine the business activity that your company will be conducting, as activities differ in terms of licensing and requirements. These activities include commercial, industrial, and service activities.
  4. Choosing a trade name: A trade name must be chosen that complies with the free zone regulations and does not conflict with previously registered names.
  5. Submitting the required documents : The required documents include passports, personal photos, and business plans. You may also need to submit additional documents depending on the type of company.
  6. Obtaining Approvals: After submitting the application and documents, you will need to obtain the necessary approvals from the relevant authorities in the free zone.
  7. Payment of fees: The fees vary depending on the free zone and the chosen business activity. After payment, the business license is issued.
  8. Renting an office or workspace: Depending on the requirements of the free zone, you may need to rent an office or formal workspace.

After completing these steps, you can start operating your new company and benefit from the benefits offered by the free zone.

Advantages of establishing a new company in the free zone

Establishing a company in a free zone offers many advantages that make it a preferred choice for investors and entrepreneurs. Among these advantages are:

  1. Full foreign ownership: Foreign investors can own 100% of the company without the need for a local partner, giving them complete control over the management and development of their business.
  2. Tax Exemptions: Companies in free zones enjoy comprehensive tax exemptions on income and profits, which increases the company’s profitability in the long run.
  3. Ease of establishment and procedures: Free zones provide quick and simplified processes for establishing companies, as establishment can be completed in a short period of time with reduced administrative complexities.
  4. International Trade: Companies in free zones are allowed to easily export and import without restrictions on business activities with global markets, enhancing opportunities for expansion and growth.
  5. Advanced investment environment: Free zones provide modern infrastructure and advanced logistics services, which helps facilitate business operations and ensure work efficiency.
  6. Profit transferability: Companies in free zones are entitled to transfer their profits and capital abroad without restrictions, which enhances investment flexibility.
  7. Customs exemptions: No customs duties are imposed on goods imported or exported to and from the free zone, which reduces operating costs and enhances competitiveness.

Establishing a company in a free zone gives investors the opportunity to benefit from these advantages to expand their business and achieve success in a distinguished economic environment.

Conditions for establishing a new company in the free zone

Establishing a company in the free zone requires compliance with a set of conditions and procedures imposed by the relevant authorities. The following are the most important conditions for establishing a company in the free zone:

  1. Choosing the right business activity: You must determine the business activity you wish to practice, as each free zone requires specific activities that must be compatible with the nature of the company and local laws.
  2. Choosing a trade name: The company must choose a trade name that complies with the regulations of the free zone, and the name must not be used by another company or conflict with commercial laws.
  3. Determine the type of company: You must determine the type of company you wish to establish, whether it is a limited liability company (LLC), a branch of a foreign company, or a sole proprietorship, depending on the nature and size of your business.
  4. Capital Requirement: Capital requirements vary depending on the free zone and business activity. Some regions may impose a minimum capital requirement to establish a company.
  5. Submitting the required documents: A set of documents must be submitted, including a copy of the passport of the founders and directors. Personal photos. And a signature form.
  6. Obtaining the necessary approvals: The required approvals must be obtained from the competent authorities in the free zone. This may require examining some special activities that require additional approvals.
  7. Renting an office or workspace: Depending on the type of activity, you may need to provide a workspace in the free zone, and this is in accordance with the regulations of each free zone.
  8. Compliance with legal requirements : All laws and regulations governing work in the free zone must be adhered to, including employment, health and safety, and other regulations.
  9. Payment of fees: Licensing and establishment fees vary from one free zone to another depending on the chosen business activity and type of company.

After fulfilling these conditions and submitting the required documents, you can receive the commercial license and start operating your company in the free zone.

Documents required to establish a new company in the free zone

The documents required to establish a company in a free zone vary depending on the type of company and the free zone chosen, but in general they include the following:

  1. Copy of passport: for each partner, founder or director of the company.
  2. Personal Photos: Recent personal photos of both founders and directors (usually passport size).
  3. Sample Signature: A sample signature must be provided for both the founders and the directors.
  4. Business Plan: Includes details about the company’s business, goals, and business strategies.
  5. No Objection Letter (NOC): If one of the founders or directors is already operating within the UAE, a No Objection Letter from the current sponsor may be required.
  6. Copy of the lease agreement: If it is necessary to rent an office or workspace in the free zone, the lease agreement must be submitted.
  7. Copy of the commercial license of the parent company : A copy of the commercial license of the parent company must be submitted if the new company is a branch of a foreign or local company.
  8. Registration Forms: Company registration forms required by the Free Zone Authority, which contain details about the type of company and business activity.
  9. Capital Documents: In some cases, free zones may require proof of paid-up capital as per the minimum requirement.

Requirements may vary from one free zone to another, so it is essential to check the specific requirements for each zone before starting the incorporation process.

How

How long does it take to establish a new company in the free zone?

Establishing a company in a free zone usually takes between 3 to 10 working days, but this may vary based on several factors, including:

  1. Type of business activity: Some activities may require additional approvals from certain government agencies, which may result in an increase in the establishment period.
  2. Required Documents: If all documents are ready and complete, the incorporation process can be accelerated. Delaying the submission of documents or the need for additional documents may extend the time.
  3. Company Type: Establishing a limited liability company (LLC) or foreign branch may take longer than a sole proprietorship or small business.
  4. Special approvals: Some activities such as financial or medical activities may require approvals from additional regulators, which may delay the process.

Once the procedures are completed and all required documents are submitted, the company can obtain the license and start operating within a relatively short period.

In conclusion, establishing a company in a free zone is a strategic step that opens up wide horizons for investors and entrepreneurs who wish to benefit from a flexible and encouraging economic environment. Free zones in the UAE offer unique advantages, such as full foreign ownership, tax exemptions, and advanced infrastructure, which facilitate the establishment process and provide great opportunities for expansion and growth. By following the necessary legal procedures and choosing the right free zone for your business, you can quickly establish your company and start your journey towards success in one of the most vibrant investment environments in the world.

Frequently asked questions about establishing a new company in the free zone

What are the main advantages of setting up a company in a free zone?

Full foreign ownership, tax exemptions, no restrictions on import and export of goods, easy repatriation of profits, and advanced infrastructure.

Can I get a residence visa when establishing a company in the free zone?

Yes, most free zones provide the possibility of obtaining a residence visa for you and the employees working in the company.

Is there a minimum capital requirement?

The minimum capital varies depending on the free zone and business activity, and some zones do not require a minimum capital.