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How to Choose the Right Free Zone for Your Business Setup in Dubai?

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How to Choose the Right Free Zone for Your Business Setup in Dubai

Making an intelligent choice can be challenging for foreign investors because there are more than 50 Free Zones in the United Arab Emirates. Before establishing a business in one of the UAE Free Zones, you should seriously consider your options and conduct a thorough study. Remember that each Free Zone has its prices, distinct lists of approved business activities, alternatives for location and facilities, and criteria for share capital.

It can all be very nerve-racking and headache-inducing. With so much information available, using the internet will not make you feel any less anxious. Thus, to help you select the ideal Business Setup in Dubai Free Zone for your company, we will clarify a few things for you. These are the actions that you ought to do.

Select a business venture for your company in the UAE

Every Free Zone operating in the United Arab Emirates has a unique set of approved activities permissible to be carried out inside the designated Free Zone. Regarding the number of commercial operations that can be conducted under one business license, separately Free Zone has its own set of principles. 

A license will cost more with the greater number of activities you select. It is sometimes obligatory to obtain two or more business licenses for the same enterprise. One workaround for this is to pick multiple activities from the same licensing type and inside the same activity group so you will not have to pay extra.

Commercial (trade), Service (consulting), Production (manufacturing), E-commerce, General trade, and Media licenses are among the most common types that firms obtain.

Select the kind of facility your business needs

You will have to make some strategies for the ensuing years. You can secure a shared or flexi-desk at a co-working space if you do not intend to grow your establishment significantly over the next few years, including adding staff to work or supervise. In the United Arab Emirates, obtaining a commercial license also necessitates these locations to meet basic facilities requirements.

You should choose an office in a different physical location if you intend to hire staff and hold frequent client meetings. You should consider a free zone’s location, infrastructure, and the availability of facilities. Not all free zones include certain facilities like warehouses or retail stores.

Additionally, remember that a business established in a free zone is only permitted to own a facility within the UAE free zone in which it’s registered.

Determine the number of UAE Residence Visas your business will require

Each employee of your organization in the UAE will require a residence visa. The type of facility determines the visa quota. Only a certain quantity of visas is available through shared desks, and these vary throughout Free Zones. If you have a shared desk in Dubai, you can often obtain 2 or 3 visas. But, if your company is in the Northern Emirates, you can obtain more.

Visas also have area requirements for a physical workplace. Usually, you are granted one visa every 9–10 square meters.

Determine if being near airports or seaports is a crucial ask

You must decide if having an airport or a seaport nearby is necessary for your business in the United Arab Emirates. To keep your costs as low as possible, you want to have the most advantageous transportation hubs and routes. It is particularly crucial if you intend to establish a trading business in the United Arab Emirates. For instance, your business would be situated in the Jebel Ali port if you decided to locate your trading, logistics, or manufacturing operation in the JAFZA Free Zone. 

This area has many storage facilities, brokerage firms, and logistics firms. Thus, everything a trading company may require is close by. Do not forget to conduct competitive research to know which companies are in your target market.

Because of its sophisticated infrastructure, DMCC Free Zone is a prestigious location. If you are looking for a high-end workspace in one of the many striking buildings that can hold meetings, customers, and staff, this Free Zone is a great option. You can buy and rent offices at the DMCC. This is not like most other Free Zones, where the offices are owned by the Free Zone government, and are only available for rental.

Find out if a certain amount of share capital is needed

A share capital deposit is one of the standard prerequisites for registering a company in the United Arab Emirates. This must be deposited into the UAE Free Zone authority account or your firm account. You will also have to give the Free Zone documentation proving your deposit. It implies that you must know the minimum share capital needed for your company activity in advance in each Free Zone.

Find out if shareholders are subject to any limitations

Certain nationalities of shareholders are subject to restrictions in Free Zones. One benefit of establishing a business in Dubai Emirate is the ability to include stockholders from high-risk countries.

Find out if you need to submit an annual audit report

While some UAE Free Zones do not, others require the submission of financial statements, such as an annual audit report. An annual audit report must be submitted to the DMCC Free Zone by the MOA’s deadline or after the fiscal year. Additionally, one of the UAE auditors on the DMCC Approved Auditors List must submit the report. Penalties will apply if the report is not turned in by the deadline.

When you consistently turn in financial statements, you will be qualified for specific advantages. These advantages include the opportunity to seek business loans at nearby institutions, drawing in new investors.

Check with nearby banks to learn about a free zone’s reputation. You must complete this work before establishing a business in any UAE Free Zone. Asking a friend or searching online will not provide the best response. For this reason, you ought to talk with business service providers and specialists. They ought to be working in areas of company establishment in the United Arab Emirates and corporate account opening at the top UAE banks. To ensure you can open a corporate bank account for your firm, do this before registering it.

Find out what the NOC requirements are if you live in the UAE

In essence, a NOC is a letter from the company sponsoring your visa now. It says that your corporation is in favour of you starting a business in a specific Free Zone. You must give this serious thought because, for instance, a UAE citizen must present the NOC from their current sponsor to be eligible for the SAIF zone. There is no such necessity in a free zone like the DMCC. For example, if you work for the government or are on a spouse visa in the Dubai South Free Zone, you must present a letter of recommendation from your job.

Make a budget to cover your yearly operations costs

Find out how much it will cost to register, obtain licenses, get an establishment card, and pay leasing costs during your first and second years of business ownership. You must also budget for the cost of obtaining all necessary visas, including those for shareholders and prospective hires in the first year of employment. This will guarantee that your business is correctly established and updated every year.

It will be complicated to ensure a Business Setup in Dubai on your own, which is why Business Consultants can assist you and thousands of other entrepreneurs by sharing our experience and creating highly customized solutions for their companies.