Freezone Company Set Up in Dubai

Company setup in the Dubai Free Zone involves various steps. Each step is interconnected, and missing any step could delay approvals. So, preparing thoroughly is vital for a better experience. Along with this, before you get into the application process, it’s crucial to understand whether you should opt to do it yourself or hire a broker for the whole process.

Most of the time, it is not easy for everyone to conduct detailed research and complete all the steps by themselves. Also, to avoid getting into uncertain payment processes, most investors opt for a broker who has already been through the process and has the know-how of it. Similarly, you can contact our team if you want assistance in establishing your free zone setup. However, it is not necessary, as you can follow the process below to do everything by yourself.

Setting up a company in every free zone generally follows a similar path; however, the operating regulations still vary from one free zone to another and from one business activity to another. The first step before starting the registration process is selecting the zone that fits your business activity. This will help you with the location based on your business needs and networking requirements.

Once you choose a free zone the next step is to register a valid brand name and select the right license type. These include commercial, industrial, or service—and be aware of the minimum capital requirements. After selecting an appropriate license consider visa options and office space based on business size. Finally, you have to process all required documents, pay fees, and set up a corporate bank account.

Along with these steps explore tax benefits and regulatory compliance. This helps you to better fit your budget and business objectives. This guide will help you save time, reduce costs, and avoid potential setbacks. Keep in mind that establishing a business is not that hard, but carefully assessing the advantages and challenges will set you up for greater success. Additionally, our team is here to help you with company setup in the Dubai free zone using 5 years of experience.

What are the requirements for a company set up in the Dubai Free Zone?

The company setup requirements include the submission of documents, payment of fees, and collection and verification of government approvals. The sequence for submitting documents may vary from one free zone to another. Overall, it is an easy process. 

For a detailed list of requirements for a specific free zone, you can visit its official website. However, investors must fulfill the following requirements in almost all free zones before starting their business operations with official permissions. Here is the list of mandatory requirements for free zone company formation.

1. 1. Select the Business Activity

1. 1. Register the Trade Name

1. 1. Obtain Initial Approval

1. 1. Submit Required Documents

1. 1. Draft Legal Documents (MOA/UBO)

1. 1. Apply for Additional Approvals (if necessary)

1. 1. Pay Fees and Collect the License

1. 1. Register with the Chamber of Commerce

1. 1. Obtain Final Approval

Select the Business Activity

Selecting the correct business Activity is mandatory in Dubai free zones. Every free zone provides a list of business activities that are officially allowed by the specific free zone authority. For instance, for the activity you can check the JAFZA business activity list on their official website. 

The business activity helps define operations, plan resources, and align with regulations. Without it, businesses face license rejection, legal penalties, and operational setbacks as some free zones only allow specific sectors.

Register the Trade Name

For a trade name, investors have to follow strictly the guidelines of each free zone. For instance, in the Jebel Ali free zone, you cannot copy another company’s name or suggest a false connection with famous people or governments. The name must also follow special rules, like ending with “FZ-LLC” and avoiding restricted words such as Dubai, Emirates, or UAE. Some of the restricted things while registering the trade name are:

1. 1. Similarity to Existing Names

1. 1. Offensive or Prohibited Words

1. 1. Governmental References

1. 1. Misrepresentation

1. 1. Trademark Infringement

1. 1. Restricted Industries

1. 1. Use of Special Characters

Obtain Initial Approval

As an investor obtaining initial approval is the first step for you to get a trade license. It is important for securing a lease for a commercial site and obtaining approvals from the specific free zone authority and other government bodies. These include the Dubai Health Authority, Dubai Roads and Transport Authority, Dubai Telecommunications Regulatory Authority, and the DED for specific economic activities.

To get initial approval for your business you need to follow simple procedures and fulfill some basic requirements. However, these requirements vary for each free zone, as the free zone authorities often modify them from time to time.

1. 1. Application Form

1. 1. Business Plan

1. 1. Passport Copies

1. 1. Proposed Trade Name

1. 1. Lease Agreement (if applicable)

1. 1. Other Relevant Documents

Along with these requirements, the cost and time may vary depending on the specific activity and free zone. However, the average cost ranges from 100-300 AED, and the time required for processing is typically 1-2 hours.

Submit Required Documents

Before we get into the details of the documents required, one thing you should know is that they highly depend on the company type. So, make sure to check the specific company-type guide for a complete analysis of the required documents. However, below, our team has shared some of the common documents you have to submit for getting business approval. These include

1. 1. Passport Copies

1. 1. Proof of Address

1. 1. Business Plan

1. 1. Shareholder Agreement (not needed for FZE)

1. 1. Memorandum of Association (MOA)

1. 1. Ultimate Beneficial Owner (UBO) Declaration

1. 1. A copy of the licensee’s passport or ID

1. 1. A copy of the applicant’s residence permit or visa

1. 1. A board resolution from the parent company (for branch only)

Draft Legal Documents (MOA/UBO)

A Memorandum of Association (MoA) and UBO are mandatory legal documents for company formation in Dubai. These documents showcase the company’s objectives, structure, and shareholder responsibilities. The MoA mainly includes the following sections however in some cases it goes beyond this.

1. 1. Object Clause

1. 1. Situation Clause

1. 1. Capital Clause

1. 1. Liability Clause

Once you have completely drafted the MOA, you will submit it to the relevant free zone authority. In the case of JAFZ, you will submit it to JAFZA, and so on.

On the other hand, the Ultimate Beneficial Owner (UBO) is mandatory in the Dubai free zone as per Federal Decree-Law No. 20 of 2018 and Cabinet Decision No. 58 of 2020. It is important for increasing transparency, mitigating risks, and ensuring Compliance. For every free zone investor, it is a must to follow their specific free zone authority UBO disclosure rules.

Apply for Additional Approvals

Depending on the business type, additional approvals are needed from government departments such as the Health Authority, Food and Safety Authority, and Civil Defense. However most of the time the business activities set by the free zone are already aligned with Dubai Laws so no additional approval is needed.

For medical-related businesses such as clinics, hospitals, or pharmacies, approval is required from the Dubai Health Authority (DHA).

For businesses involved in food production, distribution, or related activities, including restaurants, cafes, or food processing companies, approval is required as per the Dubai Municipality – Food Safety Department.

Along with this if you want to extend your business from the free zone to the mainland then irrespective of the free zone authority permission you have to get permission from the DED.

Pay Fees and Collect the License

Payment is among the primary needs of any institute that provides any service or fulfills any need. Similarly, free zones are a part of establishing the Dubai economy. Therefore, they also make a specialized framework to provide a smooth environment for investors to process the fees easily.

You can pay directly to the free zone authority through various methods. typically you can opt for the free zone authority’s designated office or online portal. But again it depends on the free zone where you are establishing your company. Some zones allow online payments through their official websites like Jafza.

On the other hand, most free zones accept payments via major banks in Dubai. However specific banks may be preferred for each zone. But you have to first confirm the payment options from the free zone authority. Two commonly accepted banks include:

• • Emirates NBD

• • Dubai Islamic Bank (DIB)

The time it takes to process the fee and get the license also depends on the free zone and the completeness of your documentation. Typically, the process takes anywhere from 3 to 7 business days. But the time required varies based on different conditions.

Register with the Chamber of Commerce

While registration with the Chamber of Commerce isn’t mandatory it can limit your business’s potential and opportunities. These include gaining legal recognition, boosting your credibility, opening doors to networking opportunities, and having access to dispute resolution services.

Obtain Final Approval

After completing the above steps, you must obtain final approval. The final approval is the last step to gaining permission for your company operations from the Free Zone Authority (FZA). To obtain it, you need to submit all the necessary documents to the authority. The authority will review your documents. Once everything is ok, you will receive the final approval.

Once you are authorized to operate within the free zone, then you can start operations. This approval ensures that your business complies with free zone regulations and is recognized by local authorities.

What is the cost of setting up a company in the Dubai Free Zone?

The cost of setting up a company in the Dubai Free Zone is a static figure because it is based on different factors. These include the entity type and your business activity. Our team has estimated the price for various company types in a table form outlining the approximate setup costs. These costs include registration fees, license charges, and other administrative expenses. This will help you to plan your business in a Dubai Free Zone in a much better way.

How much time is required to set up a company in the Dubai Free Zone?

The time required to set up a company in the Dubai Free Zone depends on various factors. The two major factors are the type of entity and the free zone selected. The table below provides an estimated timeframe for each entity type, helping investors plan their setup process effectively.

What are the benefits of the company set up in the Dubai Free Zone?

The benefits of business setup in the Dubai Free Zone include tax exemptions for qualified income and low operational costs. 100% foreign ownership and profit repatriation for foreign investors. Additionally, the strategic location and streamlined processes make it a favorable choice for investors. For a detailed overview of the benefits, you can check out Dubai Free Zone’s business advantages and disadvantages. 

Do you need a business plan for business setup in the Dubai free zone?

Yes, you need a business plan for business setup in the Dubai free zone as it is required for initial approval. It outlines your company’s objectives, activities, and operational strategies. A proper business plan helps in fast approval.

How many shareholders can a Free Zone Business have in Dubai?

A Free Zone Business can have 1 to 50 shareholders, depending on the entity type. However, shareholders can be individuals or corporate entities. The flexibility in shareholder numbers allows businesses of varying sizes to establish themselves. Some of the numbers of shareholders are provided below for the specific entity type

Can I switch from the Mainland to the Free Zone in Dubai?

Yes, you can switch from Mainland to Free Zone. But The process involves complex procedures. You have to submit transfer documents, obtain a free zone license, and cancel a mainland license with the exception of a branch of the company. For a branch of a company, you won’t need to cancel a mainland license but a free zone license and DED persimmon are needed to operate your business in both jurisdictions.