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3 Top Free Zones for Business Formation in Dubai

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Location decisions are critical to a business, regardless of its size, type, or scale. It can break or make your business. Many companies have to shut down due to poor location choices.

While it was easy for you to head to Dubai for your first or next business formation, the journey here onwards isn’t. Even if you are certain about setting up your company in a Dubai free zone, not the Dubai mainland, the question “which free zone is right for my business setup in Dubai?” still can leave you scratching your head. Well, first of all, the sky is the only limit when you set up your business in a Dubai Free Zone. With Dubai boasting over 30 free zones, choosing a free zone for your business formation can be tricky. But the answer to which free zone depends on a variety of factors such as the intended business activity, your business formation budget and other related costs, ease of business set-up process, accessibility, logistics, and infrastructure, level of competition, regional demographics, local governance, and growth opportunities. The best way to pick a free zone in Dubai for your business is to analyse the needs and priorities you have at present and the visions you have for the future of the company. You may also seek professional help regarding the same. Dubai has no dearth of qualified and experienced business setup consultants. One of them is of course Adam Global, whose blog you are reading already. Carry on to know what are the top 3 free zones in Dubai that most business persons fall for. So you can make an informed decision before incorporating your company.

List of popular free zones in Dubai for business formation

Free trade zones in Dubai are the special business areas that are not regulated by the UAE’s Federal Commercial Companies Law, applicable to businesses in Dubai mainland. Having their own regulatory jurisdiction, these free zones provide not just easy setup of business but also offer unmatched benefits to the licencees such as 100% foreign ownership, zero taxes and world-class infrastructure that is every bit right for businesses. Below are some of the Dubai free zones that are popular amongst entrepreneurs and investors worldwide.

Tips to choose the right free zone in Dubai for business formation

Establishing a free zone business in Dubai is thrilling, but selecting one is not a piece of cake. To choose the right free zone for your company in Dubai, you should know what a free zone has in its store to offer you. But before that, there are so many other considerations (aforementioned) as well that must be done by you only. Without further ado, let’s have a quick look at the steps you should walk to reach the best free zone in Dubai for your company formation:

  • Shortlist your business activities to be conducted in the UAE
  • Understand your office space needs now and in the next few years
  • Determine the number of UAE residence visas your company will need
  • Figure out whether you need to be close to seaports or airports
  • Find out the amount of share capital you will need to set up your business in a free zone
  • Check whether the preferred free zone imposes any restrictions on shareholders
  • Find out whether the chosen free zone requires an annual audit report
  • Ensure the reputation of the desired free zone with local banks is good
  • If you are already a UAE resident, figure out the NOC requirements
  • Make a budget for your annual operating costs

3 Best Free Zones in Dubai for Business Setup

Dubai Multi Commodities Center Free Zone (DMCC)

Smack dab in Jumeirah Lakes Towers (JLT) lies a 200-hectare mixed-use free zone named Dubai Multi Commodities Centre (aka DMCC) which is grouped into clusters each comprising 3 tower blocks around 3 enormous lakes and a central park. Launched in 2002 by the Government of Dubai, the DMCC provides the best-in-class physical, market and financial infrastructure required to establish a hub for global commodities trade. Granddad of all the free zones in the UAE, DMCC Dubai is the region’s #1 free zone and known for providing healthy market space to more than 20,000 businesses from a comprehensive range of industries and sectors, as diverse as agro, energy and financial services to diamonds, gold and base metals. If you are looking to planning to set up a business in the financial or commodities sector, DMCC is the best pick! The luxurious free zone:

  • Features 68 towers and the 200-hectare development currently comprising about 180,000 sq/m of commercial, residential and retail space
  • Offers a smorgasbord of state-of-the-art workspaces and top-notch amenities that your business needs to function in the future-forward Dubai
  • Allows up to 6 business activities (from the same group) with a single licence, including industrial, service, and general trade as well as crypto commodities trading
  • Supports commodity trading through organizations such as the Dubai Diamond Exchange (DDE), the Dubai Pearl Exchanges (DPE), DMCC Tradeflow, the Dubai Good Delivery Standard (DGD) for Gold, the DMCC Tea Centre, and the DMCC Coffee Centre.
  • Provides dual licences for entrepreneurs
  • Has recently founded the Middle East’s first Google for Entrepreneurs Global Tech Hub with AstroLabs Dubai
  • Gives entrepreneurs a dynamic community and excellent connectivity by air, sea, and road to operate
  • Presents financial products such as Dubai Commodity Asset Management (DCAM), Dubai Shariah Asset Management (DSAM), DMCC Tradeflow, and the Dubai Gold & Commodities Exchange (DGCX)
  • Legalised the trading operations with cryptocurrency in the UAE by issuing the first сrypto assets trading licence for making over-the-counter transactions with cryptocurrencies in order to develop the crypto industry in the United Arab Emirates

What else does one need to successfully run a business in Dubai? To know more about why and how to set up a business in DMCC, check out our blog.

International Free Zone Authority, Dubai (IFZA)

Next on the list of business-perfect free zones in Dubai is International Free Zone Authority (IFZA) which is more than a free zone. First founded in 2018 in Fujairah and then moved to Dubai in 2020 under the patronage of the Dubai Silicon Oasis Authority (DSOA), the Johnny-come-lately free zone is anything but ordinary, with its strategic location providing the business owners easy access to global markets. The highly cost-effective IFZA is an ideal free zone for entrepreneurs who have a limited budget for business formation in Dubai. IFZA is dedicated to dispensing business licences to entrepreneurs who are interested in conducting consulting, service, e-commerce, commercial and trading-related business activities in Dubai. You don’t need to have a physical office space to initiate your business in IFZA. The business formation in IFZA is effortless and instant with streamlined company formation processes and requirements, and the low service costs and zero paid-up capital requirement. With an IFZA company formation, you get to enjoy:

  • Full ownership with no paid-up share capital requirement
  • 100% repatriation of capital and profit
  • 100% import and export tax exemptions
  • 100% exemption from personal income and corporate taxes
  • No forex restrictions
  • Ability to establish holding companies
  • A safe and business-friendly legal framework for trade licencees
  • Complete flexibility for IFZA licence upgrades or downgrades
  • A flexible number of visas, subject to authority approval
  • Residency visas with 3 years validity
  • Residency visas available to shareholders and employees
  • A fast-pacing business network of registered companies from the world over
  • Hassle-free quick business formation as there is no need for office space (with basic licence packages) and no physical presence of business owners is required during the incorporation processes
  • No requirement to file an audit report with IFZA
  • A variety of trade licence options such as Industrial/Commercial trading/General trading, Holding Company & Consultancy/Service licence
  • Competitive Free Zone licence packages and an expert team with up-to-date knowledge of rules and regulations to help you achieve speedy and efficient incorporation

Dubai International Financial Centre (DIFC)

No other free zone in Dubai strikes the right chord in the hearts of the entrepreneurs planning to start a financial services company in Dubai more than Dubai International Financial Centre (DIFC). And the free zone’s robust legal system, vibrant lifestyle and healthy business ecosystem are the major culprits. DIFC nestles in Dubai’s prime location, next to the iconic World Trade Centre and opposite Emirates Towers, parallel to the arterial road of Dubai – Sheikh Zayed road. Calling all the entrepreneurs looking to set up a company in the Fintech sector, Dubai International Financial Centre (DIFC), is the foremost financial hub in the region. One can obtain a trade licence in DIFC to conduct a variety of non-financial and financial service activities in Dubai. These include retail outlets, business consultancies, law firms, professional service providers, travel agencies and translation services, investment banking, private banking, fund management, asset management, brokerage & investment advisory services, and more.

Founded in 2004, the DIFC has developed to be one of the top 10 onshore financial centres in the world. Dotted with retail outlets, cafés and restaurants, art galleries, residential apartments, public green areas and hotels dotting the landscape, DIFC is a premier destination to live and work and brings with it several advantages and efficiencies. Having its own court, DIFC is known for its legal system, which is based on English common law as compared to civil or commercial laws of the UAE. If you wish to engage in financial service activities, you will find that the DIFC as a jurisdiction brings with it credibility and certainty. The laws and Dubai Financial Services Authority (DFSA) regulations are broad, solid, and explicit. Relevant approvals from DFSA are needed to establish and run a financial company in Dubai International Financial Centre, in addition to payment of all registration fees. DIFC-based companies are considered well regulated, and the prospective clients feel comfortable in doing business with them. Rooted in the heart of Dubai, DIFC companies can cater to the booming MENASA market. It is also worth noting that US dollar is the main currency within DIFC and all DIFC management fees are accepted in the same currency. Currently, more than 2,000 companies are operating from DIFC which itself has formed a financial ecosystem where corporations can engage, discuss and make deals, hold events and execute business. The following benefits further make DIFC the jurisdiction of choice.

  • 100% foreign ownership
  • 100% capital repatriation is permitted
  • Zero tax for 50 years on profits, capital or assets from 2004
  • Zero restriction on foreign talent or employees
  • Legal framework backs up cross-border activities
  • Highly regarded, trusted, independent regulator
  • Independent, English-speaking, common law judicial system
  • Distinct from the UAE legal system
  • Risk-based regulatory approach
  • Central to regional deal making
  • The largest fund domicile in the region
  • Management offices, holding companies and family offices are situated closer to the assets they own or manage
  • The Middle East, Africa and South Asia (MEASA) is increasingly the centre of gravity for the global economy
  • Dubai plays a prominent role in the growing South-South trade, principally between Asia and Africa
  • Well-positioned to harness the potential of emerging markets
  • High concentration of international firms, investment funds, wealth management firms, banks and financial institutions
  • World-class regional and international law and auditing firms, and other professional services
  • Offers a wide range of non-regulated activities, such as corporate offices, regional headquarters, family offices, holding companies and proprietary investment companies
  • Entities such as consultancies, service providers and product providers can also establish in the centre and are not subject to regulation by the DFSA. In fact, they are authorised directly by the DIFC Registrar of Companies

Feel free to get in touch with our qualified business setup advisors in Dubai for any kind of assistance in your Dubai free zone company formation. No consultancy fee to get to know us and how can we help.

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