Free Zone

• Available Legal Forms: Free zones offer various legal structures. Not all free zones offer every legal form, so verify availability with the chosen free zone authority.
• License Types: To legally operate, businesses must obtain the relevant trade license from the free zone authority. The type of license depends on the business activity and may include options such as a commercial, industrial, or service license. The license is usually valid for one year, after which it must be renewed to ensure ongoing compliance.

• Office Requirements: Free zones mandate leasing office space within their premises. Options range from flexi-desks for small teams to dedicated offices for larger operations. Some zones also offer warehousing facilities for businesses requiring storage or manufacturing spaces.
• Infrastructure Support: Evaluate the infrastructure offerings, such as high-speed internet, utilities, and proximity to ports or airports, to ensure they meet your operational needs.

• Minimum Capital: Some free zones may require a minimum capital investment to ensure the business has sufficient funds to operate. These requirements can vary based on the specific free zone and the nature of the business activity.
• Financial Planning: Align your financial resources with the capital requirements of the chosen free zone to ensure smooth business setup and operations.

• Business Activity Regulations: Certain activities may require additional approvals from UAE authorities. For example, public transport-related businesses may need approvals from the Road and Transport Authority (RTA). It's crucial to identify the specific approvals required for your business activity to ensure full compliance with UAE regulations.
• Compliance with Local Laws: Free zone businesses must also adhere to the UAE’s anti-money laundering and anti-terrorism financing laws, which require companies to have procedures in place to prevent illicit activities.
• Economic Substance Regulations: Be aware of the UAE's economic substance requirements, which mandate that entities conducting certain activities have substantial operations in the UAE.

• Business Activity Regulations: Certain activities may require additional approvals from UAE authorities. For example, public transport-related businesses may need approvals from the Road and Transport Authority (RTA). It's crucial to identify the specific approvals required for your business activity to ensure full compliance with UAE regulations.
• Compliance with Local Laws: Free zone businesses must also adhere to the UAE’s anti-money laundering and anti-terrorism financing laws, which require companies to have procedures in place to prevent illicit activities.
• Economic Substance Regulations: Be aware of the UAE's economic substance requirements, which mandate that entities conducting certain activities have substantial operations in the UAE.

• Setup and Operational Costs: Analyse the costs associated with company formation, office leasing, licensing, and other operational expenses.
• Financial Incentives: Many free zones offer tax exemptions, customs duty benefits, and other incentives to attract businesses. It's essential to assess these incentives in relation to your business model.

• Business Ecosystem: Free zones often foster a community of like-minded businesses, offering networking opportunities, collaboration, and a supportive environment for growth.

• Operational Scope: Understand the limitations on business activities within and outside the free zone. Free zone companies typically conduct business within the zone and may face restrictions on operating in the UAE mainland without additional permits. However, businesses in free zones are allowed to engage in B2B transactions with companies in the UAE mainland.
• Regulatory Jurisdiction: Be aware of the legal framework governing the free zone, as it may differ from mainland regulations. This includes aspects like labour laws, dispute resolution mechanisms, and compliance requirements.

• Scalability: Consider the ease of scaling operations within the free zone, including options for expanding office space, adding facilities, or increasing workforce capacity.
• Transitioning to Mainland: If you anticipate the need to operate outside the free zone in the future, explore the process and requirements for transitioning to a mainland setup.

• Annual Audits: Many free zones require businesses to conduct annual audits and submit audited financial statements. This practice aligns with international business standards and enhances credibility with both local authorities and global partners.

Select a free zone that aligns with your business activity. Each free zone caters to specific industries and offers unique benefits. 

Determine the legal structure of your company. Common structures in free zones include FZE, FZC, or branch. The structure will be different across different free zones. 

Choose a unique trade name for your business that complies with the free zone's naming conventions. Ensure the name reflects your business activity and adheres to guidelines regarding language and content. 

Select an office space that suits your business needs. Free zones in the UAE mandate that businesses lease office space within their premises, offering various options:

• Flexi-desks: Shared workspaces suitable for small teams or freelancers.
• Dedicated offices: Private offices for larger teams or specific requirements.
• Warehouses: For businesses requiring storage or manufacturing facilities.

Office requirements may vary based on the number of employees and business activity. 

Submit an application for initial approval to the free zone authority. This typically includes:

• Completed application for registration
• Board Resolution appointing Manager/Director (Notarised and attested)
• Power of Attorney given to Manager/Director (Notarised and attested)
• Memorandum and Articles of Association (Notarised and attested)
• Specimen signature of Manager/Director (Notarised and attested)
• Passport-size photo of Manager/Director against white background
• Share capital information.

After obtaining initial approval and selecting office space, submit the following documents:

• Completed registration application.
• Notarized Memorandum and Articles of Association.
• Board resolution appointing managers/directors.
• Power of Attorney for managers/directors.
• Copy of shareholder(s)’ passport and visa, if applicable
• Passport-sized photos of managers/directors.
• Share capital details and proof of deposit.

Pay the required registration and licensing fees, which vary depending on the free zone and business activity. Fees may include trade license fees, office rental charges, and other administrative costs.

Upon successful submission and payment, the free zone authority will issue your business license. This license allows you to legally operate within the free zone and, depending on the license type, may permit operations outside the UAE.

With your business license, you can apply for residency visas for shareholders, employees, and dependents. The number of visas available is typically linked to the office space size and business activity.

After obtaining the business license, you can open a corporate bank account. Be prepared to provide necessary documentation, including:

• A corporate account opening form
• A board of directors’ resolution sanctioning the opening of the account, and the signatories to the account
• A copy of your company’s certificate of incorporation and trade license
• A copy of your share certificate
• A copy of the company’s Memorandum and Articles of Association (MAA)
• Copies of passports for all partners in the company