The procedure for company registration in the UAE Free Zones involves certain licensing and administrative processes that are more or less the same across the various Free Zones. At the same time, the costs and company structure is decided independently by each Free Zone, so you can expect certain changes in the laws and regulations from zone to zone. Also, the documentation process, capital requirement, company structure and time plan will be dependent on the category of business activity.
A company in a Free Zone can come under any of the following three categories;
- Branch of a Foreign Company – As part of the licensing procedure, the parent company’s incorporation documents, board resolutions and related documents will have to be submitted to the Free Zone Authority. All agreed rental and license fees have to be paid although there are no minimum capital requirements. If the company requires the Free Zone Authority to sponsor employees on its behalf, then the payment of visa charges and provision of bank guarantee is necessary.
- Free Zone Establishment(FZE) – FZE is a separate legal entity that is formed within the Free Zone. It has limited liability with a single shareholder and a minimum of one UAE-resident Director. Once the Certificate of Formation is issued by the authorities, the FZE is allowed to conduct its operations as set out by the trade licence.
- Free Zone Company(FZC) – All FZCs should have a minimum of two and maximum of five shareholders. The board of directors should include at least three people of which at least two should be UAE residents. Being a private company, FZC cannot issue shares to the public.
Licence Types in the Free Zones
The Free Zones in the UAE have various types of licences that allow certain types of permitted activities for each company. Some Free Zones are categorized by the type of activities promoted by the zone. E.g., Dubai Media Zone, Gold and Diamond Park, Dubai Healthcare City etc; But in general the licences provided by the Free Zones are as below:
- General Trading License – allows the company to export, import, store, sell and distribute goods. Distribution and sales within the UAE has to be carried out by a licensed agent.
- Industrial License – allows the company to import raw materials, manufacture products and distribute the finished products across the globe. Products can be sold in the UAE through an authorized distribution agent.
- Service License – allows the company to render services as set out in the company formation document in compliance with the laws and regulation of the Free Zone.
Whatever the category of the company and the type of licence, company incorporation in uae can become a hassle for anyone who is new to the job. It is always better to leave the legalities to an experienced and authorized company formation expert who will smooth the way towards setting up your company in the UAE Free Zone.