How to establish a new company in the free zone

A new company in the free zone

In light of the tremendous economic and developmental progress witnessed by the United Arab Emirates, opening a new company in the free zone is considered one of the crucial steps taken by ambitious investors to exploit the promising opportunities available. Among the distinguished economic zones in Dubai, the free zone stands out as a home for new and innovative companies seeking to expand their business and increase their influence in the local and global market. This article explores how to set up a new company in a free zone , covering the steps, challenges and benefits associated with this process.

Explore the free zone and its benefits

1.1 The concept of the free zone and its economic role in the United Arab Emirates. Free zones are considered specific economic zones characterized by facilitating laws and legislation that facilitate the work of companies and encourage investment and innovation. Free zones provide an ideal environment for business growth and provide many economic and legislative advantages to investors.

1.2 Benefits of opening a new company in a free zone The main benefits of opening a new company in a free zone include :

• Benefit from low or non-existent taxes.
• Access to the global labor market through facilitating trade laws.
• Obtaining modern facilities and advanced infrastructure.
• The ability to benefit from financial facilities and attractive legislation for investors.

Basic steps to open a company in the free zone

2.1 Choosing the type of company Before starting the company opening process, the investor must determine the type of company he wants to create, whether it is a sole proprietorship, a limited liability company, or a joint stock company.

2.2 Choosing the appropriate location and free zone The investor must choose the appropriate free zone that meets his company’s needs in terms of laws, financial facilities, and infrastructure.

2.3 Determine the activities and licenses required It is important to determine the activities of the proposed company and ensure that the necessary licenses are obtained from the relevant authorities.

2.4 Preparing documents and submitting the application The investor must prepare the required company documents and submit the application to the local authorities in the selected free zone.

 Potential challenges and obstacles

3.1 Local regulations and legislation New businesses may face challenges in understanding and complying with local laws and legislation, requiring specialist advice and legal support.

3.2 Financial costs The financial costs of opening a company in the free zone include registration fees, rents, labor costs and other services.

3.3 Competition Investors should be aware of the intense competition in the free zone business market and take effective competitive strategies.

Tips and directions for success

4.1 Investing in research and development Achieving success in the free zone requires investing in research and development to develop innovative products and services that meet market needs.

4.2 Building a strong network of relationships Building a strong network of relationships with other companies and local and international entities helps enhance the chances of success and expanding the business scope.

4.3 Investment in technology and innovation New companies must invest in technology and innovation to enhance business efficiency and achieve competitive differentiation in the market.

In conclusion, it is clear that opening a new company in the free zone requires good planning and careful analysis of the market, in addition to being prepared to face challenges and overcome them with innovation and creative thinking. With the right guidance and specialized advisory support, investors can achieve success and achieve their goals in the dynamic market of Dubai.

How to establish a new company in the free zone

Establishing new companies in the free zone

New companies wishing to establish their businesses in the free zone enjoy greater flexibility in choosing their own and multiple commercial activities or service activities that are compatible with the nature of their work. This is in addition to what distinguishes this region (Dubai Free Zone) in terms of tax exemptions, and this is one of the biggest attractive factors for many new contractors. This contributes to revitalizing investors’ experience and motivating them when convening or establishing companies in the free zone and conducting their business there.

How to establish a new company in the free zone

It is now possible for any person, regardless of his financial ability or who sets a financial budget for him, to establish and establish any investment project in the free zone or establish a company in Dubai. He can now establish any project or provide any investment service in the free zone, due to the multiple needs of the UAE and also due to the ease of Providing the requirements and methods for establishing investment projects there, but it is necessary to know the basic steps in establishing a company in the free zone, which are as follows: –

Determine the nature of the company’s activity:

Determining the nature of the new company’s activity in the free zone is considered one of the most important procedures imposed by the UAE law regarding the establishment of companies of 2009 in Dubai. This is based on facilitating the procedures. It also determines the parties associated with the company’s activity and the legal forms allowed within the new company.

There are approximately twenty thousand economic activities permitted in the UAE. Economic activities are classified into three main types: –

• Commercial activity (real estate, leasing, transportation, transportation, financial intermediation, wholesale, retail, storage, and communications).
• A professional activity that is specific to (agriculture, health, social work, education, and various service activities related to society, that is, any activity that depends on physical and mental activity to practice it).
• Industrial activity specializes in (transforming industries such as mining, water, electricity, and quarrying). There are also some tourism activities.

Determine the legal form of the company:

Here comes the role of determining the legal form of the new company that will be established, but this form depends on the nationality of the company’s owners, and the legal form of the company that you plan to establish in Dubai, which are as follows:

• Joint companies.
• Limited liability companies.
• Public joint stock companies.
• Private equity companies.
• Civil works companies.

Trade name registration:

The third step of establishing companies is determining the trade name in establishing a company in the Emirates, which is considered what distinguishes a commercial license from another license. The trade name of the new company is also related to the form and activity of the commercial company, and this is achieved by several important conditions stipulated by the Department of Economic Development. Before her approval of the name, the trade name must be that the company’s trade name does not contain inappropriate words, that it does not contravene public and private taste, and that the trade name reflects the commercial activity accurately and clearly.

Obtaining initial approval:

After determining the company’s legal activity, determining its legal form, and registering its trade name, it is now necessary to obtain initial approval from the competent authorities for the company’s economic activity and follow up to obtain the approval of the authorities related to the activity.

Preparing the articles of incorporation and choosing a location for your business:

Here comes the moment of preparing the contract designated for establishing a company in the free zone. This is done by bringing the incorporation contract in agreement between you and the competent authorities in the free zone. You must also choose a location to establish the company in the free zone or establish a company in Jebel Ali to proceed.

Obtaining approvals from the authorities concerned with the facility’s activity:

Some commercial activities require obtaining some additional approvals from the competent authorities for those projects concerned with them, such as approval from the Ministry of Economy, or approval from the Ministry of Interior, or from the Ministry of Justice, and specialized approval from Civil Defense if the activity, for example, is related to firefighting equipment activities, etc….

Obtaining the license:

After completing all the previous steps to prepare and establish a company in the Dubai Free Zone, you can now receive the commercial activity license and attach some papers and documents related to the company and to you, including the steps for economic development and paying the company’s commercial license fees, and then after registering in the Chamber of Commerce as a member.

Costs of establishing a company in the free zone:-

The costs of establishing a company in the free zone are mainly limited to several expenses, which are as follows:

• The cost of commercial license expenses to practice legal activity (license to practice business)
• The cost of purchasing a site or office space or the company through which you conduct your business, whether renting or purchasing.
• The cost of purchasing furniture and decorations for the office where you do your business.
• The cost of obtaining permits (work permits for sponsored employees) and visas required for them under your current company name.
• The cost of opening a new account in the name of the company in a bank to deposit the minimum capital according to the type of commercial activity of the company.
• The cost of determining the legal form of the company plays a fundamental role in whether the cost increases or decreases.
• Finally, the cost of the commercial license.

Frequently asked questions about how to establish a new company in the free zone