Step by step guide for Free Zone company set up
Free zones are special trade zones set up by the UAE government to promote economic and business activity in the region. Each free zone is an independent regulatory body that creates its own rules and regulations to conduct business. A unique aspect of free zones is that each one specializes in particular business activity. This provides entrepreneurs with a conducive environment of likeminded individuals to run their business effectively. To ensure that free zones act as centres of business activity, the government has introduced numerous policies to encourage company formation in UAE. The most prominent being 100% foreign ownership and reparation of profits. With over 30 free zones to choose from in Dubai alone, each with its own rules and regulations, free zone business set up in UAE can be a daunting experience.
Our experts for company formation in UAE have broken down the process into 5 simple steps.
Choose the type of business entity
The first and most essential aspect of company set up in the UAE free zone is determining the type of business activity and structure to opt for.
The options include
- Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.)
This type of company is similar to limited liability and has two or more shareholders.
- Free Zone Establishment (FZE)
This type of company has a single shareholder who is either an individual or a company.
Free zones also offer the option of establishing a branch of a local or international company.
Choose a trade name
Choosing the company’s name is an essential first step for business set up in the UAE. The trade name has to be decided before filling the application and submitting the required documents. Trade names must abide by the restrictions put forward by the free zone authority or the Department of Economic Development. While choosing the trade name can be an exciting prospect for investors it must be in line with the country’s morals and public order for it to be approved.
Some key rules to keep in mind are that the name should be compatible with the type of business activity that the company wishes to undertake and include the legal form as well. The trade name should not contain the names and logos of religious figures, government bodies, and external bodies. LegalWorks will not only ensure that your company trade name complies with the rules put forth by the respective free zone but also help in every step of the trade name approval process.
Apply for a license and register your business.
The process for registering a company varies with each free zone. However, a general procedure includes obtaining initial approval. The documents required for initial approval include
- A complete application form for initial approval
- A detailed business plan of the company
- Passport copies of the company’s shareholders, managers, and directors.
- A NOC from a local sponsor for individuals
After obtaining the initial approval, companies initiate the registration process and pay the required fees which depends on the type of license. For a license to be registered the following documents must be submitted to the free zone authority
- A complete application form for registration
- Notarized and attested Memorandum and Articles of Association
- Notarized and attested board resolution appointing the company manager and or director
- Notarized and attested Power of Attorney
- Passport size copies of manager and director’s photos
- Share capital information.
Choosing the right office space and Visas
The last step in the free zone business set up in UAE is selecting an office space. Companies can either buy or rent an office facility. All free zones offer multiple office solutions ranging from virtual desks to warehouses. Each company’s office requirement varies depending on the type of business they conduct and the number of employees they have. Almost all free zones office space is linked to the number of visas the company avails. For example, in Dubai Airport Free Zone (DAFZA) offers a standard office space of 25 sq.m with up to 2 employment visas. Companies can opt for the office space and number of visa that suits their needs.
Opening a company bank account
Opening a bank account is the last step for company formation and one without which you cannot start conducting your business operations. The type of bank you should choose depends on your business requirements. To set up a corporate bank account companies need to submit a list of documents to their respective banks which includes
- A completed application form
- Passports or other government ID for the owner and all shareholders
- Company certificate of registration(incorporation) and trade license
- Share certificate
- Company Memorandum and articles of association
- Board resolution confirming the opening of the account
Banks usually take up to four weeks to open an account. LegalWorks can assist companies in choosing the right bank and submitting the required documents so that the process is quick and easy.
Our team of experts at LegalWorks can help you choose the right free zone for your business and assist you in all aspects of the incorporation process. We understand that our clients are short on time.