What You Need to Know About Company Formation in Dubai


The United Arab Emirates (UAE) has undeniably become a worldwide business hub that houses tons of companies in its location. The rising number of investors who form a company and even expand their organization in the UAE is a good indicator that UAE is seen as one of the best places in the world to invest and expand in.

Company formation in Dubai free zone is a well-known activity that businessmen conduct in the UAE nowadays. There are hundreds of organizations that can be found in Dubai alone. This is found to be even more attracting to the investors because it only means that the economy of the country is soaring, and therefore, a good opportunity to grow. Business setup in Dubai free zone brings a lot of advantages with it that will be discussed below as well.

What is a Free Zone?

Before diving into this notable undertaking, one must first be familiar with the basics of business setup in Dubai free zone and what it entails.

When an investor plans to set up a business in Dubai, there are two choices to choose from for them. The first one would be to obtain a license that will allow them to operate in the UAE or register in one of the free zones.

Many businessmen choose to form a company in a free zone because of its benefits that are highly advantageous.

Before that, a brief explanation of a free trade zone is that it is an area in a country wherein the companies that are built there only pay a small amount of tax or nothing at all for the purpose of boosting the economy. It is made fordrawing foreign investment that is why its benefits are attractive.

In Dubai alone, there are more than 30 free zones thatare industry specific and some even have ports to cater the requirements of the planned businesses of investors. They are all governed by the authorities’ own rules and regulations to set order inside the zone.

Foreign investors are benefiting from the way the UAE is handling its business and economic sides of things, encouraging to conduct company formation in Dubai free zone.

Why Do Most Investors Prefer to Have a Business Setup in Dubai Free Zone?

There is a long list of advantages in free zones in Dubai. The basic ones are listed below:

  1. 100%business ownership, not needing any local sponsor for the business setup
  2. Corporate taxes waiver
  3. Personal and import and export tax exemption
  4. 100% repatriation of revenue and profits
  5. Less documentation for investors
  6. Long-term leasing options
  7. Easy, faster, and inexpensive recruitment and workforce processes
  8. Availability of facilities, such as immigration, legal, housing,etc.
  9. Faster business set up
  10. 100% free transfer of funds

Company Formation in Dubai Free Zone – Basic Steps

There may be quite a few differences in each free zone when it comes to how they handle business setup in their location. However, the below is the basic and usual thins to know in forming a company in Dubai free zones.

  1. Shareholders

The business that you’re going to form can be run by an individual or a lot of people. For establishments with only one shareholder, it’s called Free Zone Establishments (FZE); on the other hand, if there are more than one shareholder, it’s called Free Zone Companies (FZCo) and has the suffix FZ-LLC.

  1. Capital

There is a minimum capital amount required in some free zones and it differs in each. It is best to look for your desired free zones and find out what their minimum capital requirements are for you to be prepared.

  1. Company name

You can pass three names and the free zone authority will decide which one can be used by your organization. The manager should be decided as well since his name will appear on the trade license that will be issued.

  1. Application

The application should then be processed and submitted along with the requirements of the free zone authority (like passport copies and the likes)

The above steps seem to be fairly easy but it is advisable that you seek the help of consultants before you even take a step forward towards setting up a business. When you have finalized everything and have made up your mind, these consultants will be responsible to do all the above steps and further steps that should be taken, like the issuance of your trade license and any other documents that you would need to be able to start with your operations.

FAR – Farhat & Co. has been setting up businesses in the UAE and neighbouring countries for more than 30 years now. This is why we are one of the leading business setup consultants in Dubai. You can contact us to book a consultation.