UAE Free Zone Company in Dubai

Traps to Avoid When Forming a UAE Free Zone Company in Dubai

Last updated on June 23rd, 2022 at 04:26 am

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The UAE is becoming a rampantly attractive destination to carry out businesses. Some of the factors that act in favor of this could be low taxation rates, stability. And its efforts to make dynamic the business law regime.

Dubai is gaining more popularity for free zone company register for the number of benefits the free zone has to offer. However, coming up with a Dubai free zone company can be challenging.

In this article, we discuss free zone businesses, the perks of incorporating a Dubai Free zone company, and the traps to avoid when forming a UAE free zone company in Dubai.

Free zones

The United Arab Emirates free zone is an area of business meant to encourage inward investment in a particular business industry category. The sole reason is to boost trade. These zones are governed by the independent Free Zone Authority (FZA), ensuring that qualified businesses get a free zone operating license.

Foreign companies looking to start a company in a Dubai free zone have these options to consider: an offshore company or a Dubai free zone company. A Dubai free zone company gets governed by the regulations. And rules of the Dubai free zone it is established.

The perks of incorporating a Dubai free zone company

The main benefit of free zone companies is that you gain 100% ownership. That does not put into account the nationality of the incorporator.

Free zone businesses get exempted from tax. The duration of the exemption depends on the company and the free zone. That may last for a couple of years and can get renewed.

Free zone companies have a business-friendly environment. They also enjoy the best infrastructure since they get a lot of government support.

The physical infrastructure in Dubai free zones can get benchmarked against international standards.

A Dubai free zone company has the right to open a bank account in Dubai. These companies also gain access to international businesses, and their business undertakings are kept confidential.

Also, a Dubai free zone company holds the property in its name and can get liquidated at any time.

Traps to Avoid When Forming a UAE Free Zone Company in Dubai

  1. Office space and tenancy terms and conditions

So much goes into advertising office spaces and tenancy terms in Dubai free zones. The truth is, the reality may be different on the ground. Sometimes the these are unfavorable, and what’s advertised may not be what you get.

Do your due diligence before you can sign up any tenancy documents.

  1. Annual rental fees

Rent tends to be much higher in the free zone compared to other areas. DIFC, for instance, charges the highest rates. As stated above, performing due diligence to come up with the ideal rent is the best idea.

  1. Verify published information

Confirming the validity of the published information for company registrations is crucial. Rules are subject to change, and free zones are not an exemption.

Some of the tips that can help you avoid such traps when forming a UAE free zone company in Dubai include:

  • Seeking to hire a business consultant to help you with the free zone company register.
  • Settling for the ideal location for the business
  • Being keen on the tenancy terms, costs, and conditions
  • Confirming your eligibility to get a Visa