Dubai has a plethora of business opportunities to explore; similarly, it also has plenty of prime locations to choose from to set up your business. Investors or entrepreneurs are allowed to begin their business in the Mainland or Free Zone jurisdictions of Dubai. 

From my experience, I tend to see investors leaning towards free zone company formation in Dubai.  A free zone is a special jurisdiction or region designated for a particular business activity or group of activities. It is primarily distinguishable by the tax and ownership advantages it provides for foreign investors. There are more than 40 free zones in the UAE and some are under construction. The number of free zones in the Emirate of Dubai is 30 as of now. 

This article will explore more about setting up a free zone company in Dubai. Let’s delve into it.

Free Zone Company Incorporation Procedures

The governing body that issues the business or trade license in a free zone is called the Free Zone authority or FZA. A Free zone authority is an independent body and is in charge of governing the activities of a free zone company. Your activity of business should come under the group of business activities assigned to the Free zone. Therefore, have a precise understanding of the free zone jurisdiction and select the one that is most feasible for your requirements. 

The rules pertaining to company incorporation are listed below.

• Decide on the legal structure of the company: Select the desired legal structure for the company. Certain free zone jurisdictions require a minimum capital prerequisite. The prerequisite depends on the type of free zone. This minimum capital requirement does not apply to certain free zones that belong to other Emirates.
• Find an appropriate trade name: Finding the most suitable and relevant trade name for your business is an important aspect of company registration in Dubai. You are not supposed to select already registered names. Therefore get in touch with the Dubai Free Zone Authority regarding the same. After verification, you are allowed to register the trade name on the website of Dubai FZA.

• Acquire the trade license: After trade name registration, you may apply to acquire the trade license. The trade license is now issued based on the type of activity. The Dubai Free Zones issue various business licenses and they are listed below:

                       1. Commercial License

                       2. Industrial License

                       3. Professional License

                       4. General Trading License

                       5. Manufacturing License

                       6. Warehousing License

For example: 

A professional license is issued, if your business activity is associated with the service sector like law firms, consultancies etc.

A Manufacturing license is issued, if the activity involves the production of various goods and products. Industrial License is issued if the activity involves import or export of commodities. 

A General Trading License involves multiple business activities.

• Select an appropriate office premise – Businesses are allowed to lease or purchase office premises depending on the requirement. You may consider the business activity and the labour requirement to make a decision.  Start-up ventures may go for Flexi-desk options.
• Acquire the Initial approval and do the registration – the Initial approval is issued after further scrutiny. After you receive the Initial Approval, you are allowed to register the company on the website of the FZA.
• Acquire the business license – Business license is issued after the registration. After you acquire the business license, you may commence the operations.

Also read, Top 10 Benefits of Forming a Free Zone Company in UAE

Major Free Zones in Dubai

Dubai is the Emirate that boasts of the maximum number of free zones in the UAE. Dubai has a logistic and infrastructure advantage over other free zones and therefore many investors and entrepreneurs around the world prefer Dubai as their hub.

The major Free zone jurisdictions in Dubai are listed below. 

• Jebel Ali Free Zone (JAFZA) – JAFZA deals with logistics, warehousing and trading activities. JAFZA is the oldest free zone. JAFZA has a major role in the overall economic development of the UAE.
• Dubai Multi Commodities Centre (DMCC) – DMCC is a trading hub and houses a wide range of business enterprises – from coffee to precious metals like gold and diamond. The free zone also offers various financial services. 
• Dubai Airport Free Zone – A fast-growing free zone that deals with logistics, aviation, pharmaceutical industries, Information Technology and various other sectors.
• Dubai Media City – The free zone focuses on a wide variety of activities pertaining to Media like film, entertainment, marketing, music industry etc. The free zone comes under the Dubai Creative Clusters Authority. (DCCA)
• Dubai World Central – the free zone deals with various ancillary services, the aviation sector.
• Dubai Healthcare City – The Dubai Healthcare Free zone dedicates its services to the healthcare industry. Medical devices, equipment and technology, medical research etc.
• Dubai International Financial Centre – the free zone is considered as the financial hub of the Middle East. The free zone deals with banking and finance sectors.

I hope this article helped you gain insight into starting a company in the free zone jurisdiction of Dubai. Select the most appropriate free zone in Dubai based on your business goals and requirements. 

For additional information regarding individual free zones, please get in touch with Kiltons Business Setup Services LLC. We have a team of free zone experts who can guide you through the business set up procedures anywhere in Dubai.

Have a look: Dos and Don’ts of Connected with Business Formation in Dubai