Freezone Setup Dubai – Pros and Cons of doing business in a Free Zone

Over the years, Dubai has seen tremendous economic growth and has been associated closely with its unique entrepreneurial flair of the community in the UAE.  The authorities have established SEZs where businesses can grow with minimal procedures and costs to push foreign investment and innovation.

What is a free zone?

An expatriate who is willing to freezone setup Dubai can either register a company with any free zone in the UAE or set up an LLC with an operational license in any part of the UAE. A free trade zone or free zone is a special economic zone where companies can get and operate a significant amount of fee and tax savings. Expatriate residents can also get company ownership of 100%. In free zones, companies are considered as offshore ones and they don’t have to engage with the Ministry of economy or customs authorities. They are instead protected by concerning authorities.

There are some advantages to set up a business in free zone –
  • There is no legal requirement for having a local service agent or sponsor for 100% of ownership of a foreign national firm.
  • Relaxation from export/import taxes and personal taxes
  • Waiver of renewal and time-bound corporate taxes for next periods
  • Long-term options for leasing, i.e. around 25 years, provided for investors at great terms
  • Faster incorporation than outside free zones when done
  • Free 100% transfer of funds
  • Easy, fast and cheap workforce and recruitment
  • Housing, legal, labour, immigration and other facilities are easily available

Investors should also know about some limitations. In a free zone, companies are limited to do business in the free zone. Only registered distributors are able to deal with companies out of the free zone. Business activities are also limited as some free zones are based on some industries like media, education, diamond or gold.

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