Free Zones are geographic areas within a country where goods, services and commodities may be traded without the intervention of stringent customs regulations. In most Free Zones, companies are taxed minimally or sometimes even fully exempted, to encourage economic activity.
Free Zones in the UAE were intended as international business hubs for companies conducting business outside the UAE, since they are not licensed to operate within the rest of the UAE. Although during the initial phase, most of the free zone companies were involved in import and re-export, now most companies conduct business within the UAE and GCC through local distributors.
Creating a business entity in one of UAE’s Free Zones is an attractive option for foreign investors, as Free Zones facilitate business activities and attract companies looking to start up businesses quickly and easily. The Free Zone areas in UAE are geographically distinguished sections, and follow laws and regulations vastly different from the laws that govern companies within the UAE. Companies operating within the Free Zones are considered as foreign companies or companies operating outside the UAE.
Each Free Zone in the UAE is a separate entity with its own Free Zone Authority that governs, handles registration and issues licenses within the Free Zone. Although Free Zones vary across the Emirates, the basic principles remain the same.
UAE Frees Zones offer investors and business start-ups significant incentives for setting up their office in the free zones. Here are some of the most noteworthy of them.
There are more than 38 free zones operating across the UAE, spread out across the seven emirates. This number is constantly on the rise, with new free zones being declared each year. Most free zones are specialized to handle a certain type of business such as Dubai Healthcare Park, RAK Media Free Zone and Fujairah Creative City. Although the rules and laws that govern most Free Zones are similar, there will be differences in the business environment and the services they offer.
If you are planning on opening an office in any of the UAE Free Zones, it would be a good idea to do plenty of preliminary research. An authorised company registration agent would be able to smooth your path through the registration and start-up process which can prove to be hassle for newcomers.