5 Key benefits
of doing business in a UAE freezone.
Setting up your business in the UAE, in itself can feel like an enormous task to finish, and yes without any proper guidance, or doing it yourself, I am sure it will feel that way. There are various factors involved when first entering the UAE market and establishing your presence in the UAE region, and the most vital point in this is the legal entity establishment of your business, the type of license you choose and where exactly you establish it in the UAE.
For many, they have heard stories of sponsors taking 51% of the business, and for others its been a misguided trail of information that is given, just so that the client sets up their business in the UAE in the way that the consultant can benefit more. However, for people wanting to make informed choices with setup, there are of course various options available to potential entities that want to setup in the UAE. Today I share with you the option of setting up in a freezone, and the benefits it has for your business, based on the business model you have.
What is a freezone?
Free Zones are special economic zones set up with the objective of offering tax free, and free customs duty benefits to expatriate investors. Free Zones in Dubai and the UAE are governed pursuant to a special framework of rules and regulations applicable to concerned freezone.
The UAE has a standard system setup of registering a business in the UAE. This entails the use of a sponsor (UAE national) for your business, either as a service agent or as a partner in your business.
The use of free zones, and the available amount of free zones are of course increasing which has made it beneficial for many companies to make use of this facility. Even though it may always seem like a better option, it is important to understand the rules and regulations of each freezone involved and how it affects you doing business in the region.
Today we focus on the 5 key benefits of setting up your business in the UAE in one of its freezones.
100% Foreign Ownership
Many companies choose the option to have 100% foreign ownership, and therefore avail of this option in the free zone. This option is not available to expatriates when setting up your business in Dubai , where you have to make use of a UAE national sponsor.
0% Income & Corporate Tax Exemption
As the UAE already charges no tax, there is also this in the freezone that no personal income tax is applicable which is a great benefit for many companies and individuals.
100% Repatriation of Capital and Profits
Companies are allowed to freely do with their capital and profit as they please and hence no restrictions in this regard.
100% Import and Export Tax Exemption
This is a great benefit to companies that do a lot of import and export to other regions. Therefore it is a great benefit for these businesses. Note that if the goods of course are taken out of the freezone, a 5% duty will apply on the goods that is taken out of the specific freezone.
Smooth Setup Process
To setup in a freezone is in many instances smoother and faster to setup, than to setup your company in Dubai directly. Reason being is you are making use of one central department that does the setup for you and you can start operating faster in the UAE. However establishing a business in Dubai directly, you would have to make use of a PRO service, or if you do it yourself it will entail a lot of back and forward and run around.
Based on what option fits your requirement, hence setting up your business in a UAE Freezone, indeed has great benefits for companies. Have you had any struggles and challenges with choosing a freezone to setup in, or for setting up your business? If you have I would love to hear from you. Setting up in the UAE can certainly be a breeze, if you make an informed decision.