This article was updated on July 7th, 2023
This article has been researched and written by Scott Cairns and the team at Creation Business Consultants and has not used AI in generating this article.
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UAE Free Zones – Which is Best for Your Business?
Free zones provide attractive options for foreign investors to set up their company in the UAE. Every free zone area in the UAE is considered a distinct geographical location, and each free zone observes laws and regulations unique to their specific free zone.
Selecting the right free zone for your company is imperative for the success of your business. However, with more than 50 free zones throughout the UAE, it can prove to be overwhelming trying to determine which free zone is right for your business. To help you understand your free zone possibilities, Creation Business Consultants has put together some helpful tips to get you started.
KEY FACTORS TO CONSIDER WHEN CHOOSING A FREE ZONE FOR YOUR COMPANY
1- WHAT IS THE ACTIVITY OF YOUR BUSINESS?
Every UAE free zone has specific business activities that can be performed within a particular free zone jurisdiction and internationally. For example, some free zones may permit your company to have multiple activities under the same trade license, while others limit you to one or two business activities. Depending on the free zone you select for your business, you may be required to have multiple license types (such as service, industrial, and trading).
On the other hand, some free zones have limited business activities targeted toward a specific industry. Some examples include:
- Dubai Silicon Oasis (DSO) – this free zone is aimed towards the IT and technology industries. DSO free zone is primarily comprised of companies related to the IT sector, high-tech, engineering, trade, and consulting.
- Dubai Design District (D3) – D3 free zone is recommended for companies performing fashion and design related activities. From local boutique design studios to prestigious global fashion houses wishing to enter or expand to Dubai and the Middle East market, D3 free zone is ideal for companies large and small.
There are also free zones that are more “general”. These free zones are not industry-focused and offer a wide range of business activities. Some examples include:
- Dubai Multi Commodities Centre (DMCC) – DMCC free zone has over 550 business activities, ranging across 21 sectors that include: energy, commodities, gold and diamonds, technology, construction, FMCG, healthcare, aviation, shipping, education, and media, as well as services such as professional, financial, personal and community.
- Dubai World Central (DWC) – is also known as Dubai South and is a generalist free zone. DWC free zone offers a wide range of business activities that are suitable for businesses ranging from startup companies to multinational corporations.
2- WHAT INFRASTRUCTURE DOES YOUR COMPANY REQUIRE?
As you decide on which free zone to select for your company setup, it’s important to think about the future of your business. Once you register your company in a free zone, your business is only permitted to operate within the free zone jurisdiction and internationally. Therefore, it is critical to know where your current or target clients/customers will be located. If your clients are in mainland UAE, a free zone company setup/structure may not be the right option for you.
At Creation, we will analyse your needs, advise you on the various UAE free zones, identify and assess the type of structure suitable to your business, as well as your needs for future expansion and growth. Below are some points to consider when selecting a free zone:
- Which free zone enables you to open a corporate bank account?
- Does your business require a factory to produce goods?
- Does the company require access to ports to run its operations?
- Will you need office space to meet with and impress your clients?
- How many employees will you hire and which type of office facilities will you need?
- Do you have the required paid up capital for opening a new company?
- Do you know that some free zones require you to lodge financial audited reports each year?
Not all business/office facilities will be available in all free zones. Some free zones have a modern infrastructure and offer facility rental for ready to operate offices, retail shops, or warehouses. Depending on your specific company requirements, you may only need a co-working space or a flexi-desk. On the other hand, you may require very specific offices and warehouses to conduct your daily operations.
Before making your free zone choice, you should consider both location and existing infrastructure within the free zone itself. It’s important you choose the free zone that meets the specific needs of your business operations and customers. Assess with caution, be sure to get in touch with our expert team who can guide you towards the correct free zone. Selecting the wrong free zone without fully assessing your business plans can prove more costly and time consuming in the long run.
3- HOW MANY UAE RESIDENT VISAS WILL YOUR COMPANY REQUIRE?
You will need to obtain the UAE residence visas for every non-expat employee working in your UAE company. Visa requirements differ from free zone to free zone, so it’s essential for you to understand your needs before selecting your free zone.
For example, the visa quota depends on the office facility type, and this quota varies depending on free zone regulations. You may be able to obtain two or three visas with a “flex desk” or “smart desk,” which is ideal for startup companies. Whereas, a flex desk would not be practical for mid-size businesses or MNC’s with many employees. A standard 200 sq. ft. office space will enable you to apply for around four or five UAE residence visas. However, when it comes to larger physical office spaces, one eligible visa is applied for every 9 -10 square meters of office space. Therefore, the larger the office, the more visas you can apply for. Larger offices in the free zone can be much more costly compared to mainland UAE. Free zone offices are subject to availability at the time of your company registration. Therefore, if your desired office is not available you may have to settle for an office that you would not normally choose or one that is perhaps over your budget. Whereas, with mainland UAE license you will have complete flexibility to lease a larger office at your preferred location and within your budget and at a much lower rate compared to the free zone office facilities available.
CREATION BUSINESS CONSULTANTS
At Creation, our team of expert consultants is ready to help you set up your company in the UAE. From selecting the right free zone for your business to navigating the various local and free zone laws and regulations associated with moving your company to the UAE, we can have your company setup, operational, and earning profits in as little as 24 hours.
What’s more, we minimise any risk associated with setting up or expanding your business to the UAE by making sure you maintain control of your company. We can even help you set up your corporate bank account, which can prove to be a bit challenging. Whether you are in IT, manufacturing, hospitality, or health care (and everything in between), our team of experts has the skills and experience to guarantee you start your company in the right free zone.
Let Creation help you navigate this complex but extremely rewarding journey and find what works best for your business requirements. Contact a member of our Corporate Structuring team today to schedule your free consultation.
