The United Arab Emirates has long been an attractive destination for entrepreneurs around the world. With low taxes, a strategic location in the heart of the world’s largest and fastest-growing market, and governments dedicated to promoting and supporting businesses, it’s not hard to understand why. But while these are headline-grabbing factors, there is another important reason why so many people flock to the UAE coast to do the Business setup in UAE Freezone. So what is a free zone?
What is a Free Trade Area?
Also known as a free trade area – a free area is essentially an economical area where you can usually trade goods and services at reduced tax rates. These were originally introduced to boost international business in the region by offering benefits such as 100% foreign ownership of the company. The United Arab Emirates currently has 45 free trade areas.
Over the years, the UAE Free Zone has evolved to provide greater benefits to the businesses within it. Many free zones correspond to a particular industry or industry. For example, Dubai Healthcare City serves the healthcare industry, but the JAFZA Free Zone Authority is favored by importers and exporters because it is directly linked to the region’s largest port.
So why establish a free trade area as such an attractive option in?
What does that mean for your business?
Why set it as a free zone? If you want to start a business in the United Arab Emirates, there are many reasons to choose a free trade area.
Easy setup: The setup process in most free zones is very simple. The exact application process depends on your business consultant and the free zone you choose, but in many cases, you only need to provide some basic documents such as a copy of your passport or business documents. In many cases, the entire process only takes a week or two. Many free zones also offer flexible desks and virtual packages that allow you to use free zone addresses and features on an ad hoc basis.
Taxes and Obligations: This is probably the most compelling reason to choose a free zone: taxation. If you are in a free trade area, your company will not only benefit from 0% corporate and personal tax but is currently exempt from 5% VAT. And that’s not all. Free zone companies are also exempt from import and export taxes and can trade without currency restrictions. Your company, founded in the free Zone, not only benefits from 0% corporate and personal tax, but is currently exempt from 5% VAT.
Foreign Ownership: Another great advantage to establishing in the free zone is foreign ownership. Most foreign entrepreneurs who want to establish a position in the United Arab Emirates need to work with their local partners to do business. This is not the case in the UAE Free Zone. Company Formation in dubai here and retain 100% ownership.
