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What You Need to Know About Dubai Free Zone Companies?

It is true that there are companies registered under the Freezone currently operating in the UAE There are many more under construction. 

The most significant benefit of forming an entity in one of the free Zones can be that they are no restrictions regarding foreign-owned companies. The company is governed by an independent Freezone Companies Formation Authority (FZA), who is responsible for the issuance of operating licenses as well as regulating the operations of businesses operating in the Free Zone.

The UAE is quickly becoming an important hub for business and is an excellent location to establish an office for a representative or company. The UAE has more than 40 “Free Trade Zones” within the UAE thus identifying the most appropriate Freezone Company Formation which can be used to conduct business in the area can be a challenging task. It’s also widely believed the Freezone’s Company Formation Corporation can be described as an offshore enterprise, however, despite the similarities there are distinct differences between them.

Alongside the ability for shareholders, directors employees, shareholders and shareholders to apply for residency visas to those who reside in UAE The benefits of Freezone Company include: 

  • 100 percent foreign ownership (no requirement to find an local sponsor or partner);
  • 100% repatriation of capital profit;
  • All tax exemptions for income tax;
  • There aren’t any restrictions on the currency that can be used;
  • Numerous different kinds of work are licensed;
  • Energy that is plentiful and inexpensive;
  • Modern, efficient communication;
  • Efficiency in the logarithm of operations due to this cluster effect the business
  • Offices and desks which are equipped with services designed specifically for SMEs and startups.
  • Excellent support services.

The type of business plan you want to establish will play an important role in the selection of Company formation Dubai that is able to meet your requirements. The principal Free Zones as well as their license activities include:

  • Dubai Multi Commodities Centre (DMCC) – Commodities Trade and Exchanges;
  • Jebel Ali Freezone Company Formation (JAFZA) – Trading, General Trading, Service, Logistics and Industrial;
  • Dubai International Financial Centre (DIFC) – Banking, Financial Services and Legal;
  • Dubai World Central (DWC) Dubai World Central (DWC) Aviation, Logistics, Light industry and other services;
  • Dubai Knowledge Park (DKP) – Human Resources Management, Training and Personal Development;
  • Dubai Internet City (DIC) – Internet and Communications Technology;
  • Dubai Media City (DMC) media-related activities;
  • Dubai Silicon Oasis (DSO) – Information Technology, Telecom, Electronic and Engineering
  • Dubai Healthcare City (DHCC) – Healthcare, Medical Education and Research, Pharmaceuticals and Medical Equipment;
  • Ras Al-Khaimah (RAK) – Trading, General Trading, Service, Industrial and Educational;
  • Fujairah Creative City (FCC) – Media, Consulting, Communications, Design and Technology.


Investors can register the company as a new entity by creating an entity called the Free Zone Establishment (FZE) or Free Zone Company (FZC) (an FZE is owned by one shareholder whereas an FZC is owned by two or more shareholders ) or establish an office or representation for the parent company located in the UAE or in another country. An FZE (or FZC is an entity that has limited liability and is must comply with the regulations and regulations of the law on formation in Dubai the country where the company is registered. The rules that form included in the UAE Commercial Companies Law (CCL) do not apply to FZEs.

In order to begin the process of setting up a Company Formation Dubai we will require the following documentation and due diligence from all shareholders/directors of the proposed new company:

  • Certified Passport Copy and UAE Visa/UAE Entry Stamp in the case of Visa/UAE (if non-resident)
  • 2 Two (2) Proofs of address (dated within the three months preceding the date of issue)
  • Bank or Professional Reference Letter
  • Curriculum Notice of Qualifications (summary of professional experience)
  • Request for Company For Form (which we’ll send)
  • Be aware that some Free Zones could require a comprehensive business plan, which is based on the business model of the business being formed. Sovereign provides a range of templates that will assist you.
  • Once a legal entity has been established within the Free Zone the company must lease the land or build a structure and obtain an operating licence from the Freezone Company Formation. Different types of licences are offered to various types of zones. Companies with licences for trade or industry can conduct transactions inside company formation Dubai as well as in other countries. For selling their products in their own UAE it is essential to be an UAE authorized agent in addition to joint ventures need to be created.


This Q&A will provide further information regarding the legal requirements and the advantages of establishing a Dubai Company in the UAE.

Why set up a Freezone Company Formation?

Freezone Company Formation will be more expensive when compared with an Offshore Company setup and it typically takes between 4 and 6 weeks to create. However, it is an offshore company (with specific offshore features). This type of company is ideal for gaining entry to markets as it grants you a formal presence in the UAE with offices and visas, without the need for local sponsors. 

Can I conduct business in any place using the help of a Free Zone Company?

It is not permitted to conduct business internationally (outside of the UAE) and within the Free Zone itself. It is prohibited to conduct commercial activities on the mainland of the UAE. If you’re preferred market is the mainland UAE it is required to set up an UAE Onshore Company with an appropriate local sponsor. Sovereign can assist in this.

Are there any restrictions on your business activities?

Yes. Based on business’s nature, specific approvals from outside may be required by certain Ministries and regulatory bodies in order to perform specific tasks. For instance, an investor seeking to establish an educational or training institution may be required to seek approval from the Knowledge and Human Development Authority (KHDA). If there aren’t any other outside approvals, the Free Zone Authority will carry an internal audit of the business idea when it comes to incorporation.

What are the legal obligation for Free Zone Company? 

Each Free Zone has the power to regulate it, therefore requirements vary between each Free Zone. However, the majority of them use a common structure. A manager must be appointed for the business and is accountable for the day-to-day running of the company and is usually accountable for the management of the accounts at the banks and signature of contracts on companies’ behalf. When any changes are made to the organization’s structure. The manager has to approve. Managers must be a UAE resident or planning to become one.



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