The United Arab Emirates is considered one of the most attractive business destinations globally, thanks to the path-breaking initiative, free zone.
The concept of free zones brought a paradigm shift in the reign of the global business pedestal.
The establishment of the first free zone in the Jebel Ali area in Dubai in 1985 marks a watershed so far as the flow of global business activity is concerned. Since then, the UAE has set up around 35 free zones, and around 20 of them are established in Dubai alone.
Do you also want to be a part of the free zones?
There are attorneys for the businesses in UAE where you can get your legal help for setting up these businesses.
Let us discuss the advantage of setting up businesses in the Dubai duty-free zone.
If you invest in a free zone, you become a free zone company. Now you are governed by the rules and regulations of the free trade zone where you are registered.
The free trade zones offer you the possibility of opening the following types of companies:
- Free zone establishment (Sole establishment).
- Free zone companies ( Limited liability companies with more than two shareholders).
- Branch of the representative office of some parent company that is established abroad.
Benefits Of Becoming A Part Of The Free Zone
A free zone provides a fertile ground for establishing businesses. Free zones are equipped with high-end infrastructure.
Other facilities include tax exemption and world-class business facilities. Let’s go through them in detail.
1. Availability Of Large-Scale Multicultural Skilled Professionals
If you are starting a business in the Dubai-free zone, you will be blessed with easy access to highly skilled professionals. There you are going to get educated and skilled employees from the subcontinent.
2. 100% Foreign Ownership
In the UAE, you can not have 100% ownership in any business that you set up. You will have to share it with the state.
But in the recent past, the government has loosened this rigidity and opened 13 areas where you can have 100% ownership.
3.No Currency Restrictions
Currency regulations are the restrictions that a government imposes to control the flow of the economy.
This regulation is made on foreign currency. But in the free zones, you are not going to have currency restrictions.
Hence the transaction process for the foreign businesses goes on to become quite fluid.
This is the most alluring part of the section. If you set business in the duty-free zone, you are definitely going to get a huge advantage.
This is because import and export duties are not applicable in the free zones. This works as a huge cost saver, which has accelerated business growth and development to the 4th gear.
5. Red Tape Go Away
The company incorporation in these free trade zones is extremely simple and straightforward. Here the licensing procedure and procurement of the permissions are easy.
6. No Personal Income Tax
This also accounts for one of the most important facilities that you are getting while you do business in the UAE.
When you are staying in the free zone, you are not entitled to personal income tax. This acts as a good cost saver for you, especially when you are new to the business.
7. Benefits Of Economic Concentration
Classification of business makes activity seamless. If a business zone is divided into clusters, it definitely helps business from getting growth. This is called clustering.
Different studies have provided the observation that clustering of business is highly beneficial to the growth and development of business.
In 2019, DFZ set record sales of 24.284 million transactions yearly. The best performers were Fragrance, which rose by 2% more than in 2018.
The sales value reached is US $307.825million. It is followed by liquor and cosmetics. The sales of tobacco accounted for 11% of total revenue generation. This is a phenomenal display of business development, one must say.
Other than the ones mentioned, you are going to get various facilities for the government of UAE.This corporate tax exemption for up to fifty years, a hundred percent repatriation of capital, and others.
These must give you enough confidence to start your own business in the Freezone.