Over the past few decades, the UAE has firmly cemented its place as one of the world’s leading business destinations, with good reason. Entrepreneurs and business owners continue to flock to the country to enjoy its open and welcoming trading environment, its strategic location at the heart of the Middle East and its attractive tax regime and company formation process. But the attraction does not end there. The country’s free zones are also a major driver of business in the region. Offering a host of exemptions, initiatives and advantages, they are the perfect location for trading in the UAE and beyond. In this article, we will explore these advantages and detail the process of getting started in a free zone. Table of contents What is a free zone? Advantages of setting up a business in a free zone Choosing the right free zone for your business Setting up a business in a free zone What is a free zone? Free zones are designated economic areas where businesses can trade goods and sell services. There are over 40 across the UAE, all designed to facilitate smooth operations and save inhabitants time, effort and money. Every free zone in UAE offers distinct benefits to the businesses within them, including customs tax exemption, zero currency restrictions and repatriation of capital and profits. UAE free zones also allow for hassle-free 100% foreign ownership of businesses. Types of free zone in UAE On top of the general benefits, many free zones also offer advantages for those in specific industries such as manufacturing, freight, healthcare, media or technology. These advantages include proximity to transport infrastructure or industry-specific facilities such as studios or factories. Generally speaking, free zones conform with the UAE’s license categories – commercial, industrial and professional. In short, commercial includes all manner of trading activities, industrial covers manufacturing and assembly, and professional describes most service industries. Many free zones cater to a broad spectrum of businesses and freelancers, across many industries and license types. Advantages of setting up a business in a UAE free zone UAE free zones play a huge role in attracting entrepreneurs to the region. By complementing the country’s already attractive tax and business environment, free zones can help to streamline operations, reduce costs and facilitate access to large and growing markets. The top five benefits of setting up in a UAE free zone are ease of doing business, tax benefits, the established ecosystem of businesses, access to global markets, and diverse business opportunities. Let us look at these factors one by one. Ease of doing business Starting and running a business in a UAE free zone is incredibly straightforward, with online applications on offer in most cases. As free zones are self-governing, there is usually no need to obtain additional approvals before you can start trading. Free zones offer a variety of workspace options too, from coworking desks and private offices to warehouses, factories and land for development. Many also have on-site leisure facilities and staff accommodation. Once you are up and running, free zones offer a range of business support services, including visa assistance and other government administration, mail handling, telecoms and more. Tax benefits The UAE boasts a highly competitive tax regime, being one of the few countries to levy 0% on corporate and personal income. However, the UAE will levy a 9% corporate tax starting June 2023, which will still be one of the world’s lowest corporate taxes. The only notable widespread tax out here is VAT which remains low at 5%. Setting up in a UAE free zone brings further enhancements to these benefits. All free zone companies are 100% exempt from customs tax, while some are not required to pay VAT. Established ecosystem of businesses Free zones in UAE offer a great opportunity to work among like-minded business people. As soon as you obtain your business license, you step into an established ecosystem of successful business owners, giving you fantastic opportunities for networking and collaboration. Many free zones also offer accelerator and incubator initiatives for startups and SMEs, as well as assistance finding VC funding for businesses of all sizes. Access to global markets With no income or customs tax to pay, UAE free zones are highly advantageous for those wishing to trade with markets worldwide. As most free zones are well-connected by land, sea and air, they are built for large import and export operations. Add to this the UAE’s prime location and direct links with markets in the Middle East, Europe, Asia and Africa and there can be few, if any, better locations for global trade. Diverse business opportunities While free zones can foster industry-specific support, the welcoming policy of many others offers a multitude of diverse opportunities. Some free zones in the UAE are open to hundreds, if not thousands, of business activities, potentially giving you access to new markets and revenue streams. Choosing the right free zone for your business As with any business decision, there are many factors to consider before choosing a UAE free zone, including: Business activities While some free zones are open to all, others are limited to specific industries, so your business activities will play a huge part in where you can set up. While industry-specific free zones can be advantageous, you should also consider the networking and business opportunities on offer at cross-industry locations, too. Premises Free zones offer a wide range of office space and other business premises, so it helps to have a good idea of what you require. If you are a service business with a few employees, a private office may be enough. However, if you intend to start a large-scale manufacturing or distribution business, then you are likely to require warehousing or factory space. The good news is, whatever facilities you require, you are almost certain to find them in a UAE free zone. Location There are several reasons why location is a vital factor when choosing a free zone in UAE. For one, it can have a considerable impact on your bottom line. The cost of labour, business premises and accommodation can vary significantly from emirate to emirate, so it is worth looking throughout the country to see how they compare. Services and facilities The facilities on offer can also vary greatly between free zones. While some offer standard mail and call handling services, others provide a full concierge plus assistance with accounting, marketing, IT and much more. You should also investigate other practical facilities and utilities such as internet speed, parking and 24-hour access. Benefits of RAKEZ – the most popular free zone in UAE Ras Al Khaimah Economic Zone (RAKEZ) is situated in the heart of Ras Al Khaimah, less than an hour from Dubai. The free zone is open to businesses of all sizes, from freelancers and startups to multinational enterprises across more than 50 industries. Today, RAKEZ is home to over 16,500 companies from more than 100 countries. Businesses setting up in the free zone can benefit from a choice of workspaces, including coworking desks, shell and core and serviced offices, warehousing, land for development and more. RAKEZ also offers ten license types, including commercial, industrial, professional and e-commerce, as well as freelancer permits. Other benefits of setting up at RAKEZ include: • Free zone and non-free zone entity formations • One-stop shop for all government services • Connectivity to major logistical hubs • 100% foreign ownership • Wide-ranging business and industrial facilities • Fast and efficient business set-up processes • Easy access to markets across MENA, Europe, and Asia Setting up a business in a free zone The required steps and procedures for setting up in a free zone will differ slightly depending on your chosen jurisdiction. Let’s look at some of the universal aspects of the process, to give an idea of what’s involved. Step 1: Outline your business activities As mentioned above, your business activities will greatly affect the free zone that’s right for you. So, the first step is to clearly define those that you intend to carry out. This will speed up the process of finding the most suitable free zone and ensure you are correctly licensed. Step 2: Pick a suitable company name Choosing an appropriate name for your business is not only crucial for paperwork, but it also reflects the identity of your brand. So, you should think carefully about how well your chosen name represents your offering and ethos. On top of this, you will need to adhere to the naming rules laid down by the UAE government. One of the main points to bear in mind when choosing a business name is to avoid obscene or indecent words that may offend the general public. You should also refrain from using words or names containing religious attributes. Step 3: Make your license application The next step is to make your license application. Before submission, you will need to prepare some basic documentation, including: • Copy of your passport and visa. • Copy of your Emirates ID or entry visa stamp (for non-residents). • Copy of the passport and visa of partner/s (if any). • Two coloured passport-sized photographs. • Additional business documents such as the business plan and other necessary documents supporting your company. These may include no-objection certificates and approval letters from various government entities. You can then apply directly to your chosen free zone, online, in person or via the mail. Cost of setting up in a free zone in UAE The exact cost of setting up your free zone business will depend on your chosen location and business activities, as well as your company size. RAKEZ offers a business license package from just AED 5,499, guaranteed for three years, which includes the use of the organisation’s coworking space. Another option is the all-inclusive visa for life package, which includes a license and UAE residency visa for just AED 16,500 per year. Assistance for investors In addition to supporting the company formation and visa process, RAKEZ offers easy payment plans through its banking partners, so you can spread the cost of company setup. Value-added services The support on offer from RAKEZ extends way beyond launch. The free zone’s expert team can also assist with business bank account opening, VAT registration and filing, and all matters relating to UBO and ESR. Other value-added services include: • Attestation • Translation • E-services and typing assistance • Pro services • Insurance • Consultancy • Recruitment and staffing • Procurement • Creative and printing Start your free zone business with RAKEZ Whatever your business idea, RAKEZ can help make it a reality. Our application process is simple, and our packages are affordable. Moreoever, you can start your UAE free zone company under 5 minutes with RAKEZ instant business license quick online process. With the RAKEZ business set-up packages, you will get a UAE trade license, use of our coworking space, and a host of value-added services, including business bank account opening, VAT, accounting and compliance assistance. Ready to get started? RAKEZ is here to help you with your UAE business setup.
Over the past few decades, the UAE has firmly cemented its place as one of the world’s leading business destinations, with good reason.
Entrepreneurs and business owners continue to flock to the country to enjoy its open and welcoming trading environment, its strategic location at the heart of the Middle East and its attractive tax regime and company formation process.
But the attraction does not end there. The country’s free zones are also a major driver of business in the region. Offering a host of exemptions, initiatives and advantages, they are the perfect location for trading in the UAE and beyond.
In this article, we will explore these advantages and detail the process of getting started in a free zone.
Free zones are designated economic areas where businesses can trade goods and sell services. There are over 40 across the UAE, all designed to facilitate smooth operations and save inhabitants time, effort and money.
Every free zone in UAE offers distinct benefits to the businesses within them, including customs tax exemption, zero currency restrictions and repatriation of capital and profits. UAE free zones also allow for hassle-free 100% foreign ownership of businesses.
On top of the general benefits, many free zones also offer advantages for those in specific industries such as manufacturing, freight, healthcare, media or technology. These advantages include proximity to transport infrastructure or industry-specific facilities such as studios or factories.
Generally speaking, free zones conform with the UAE’s license categories – commercial, industrial and professional. In short, commercial includes all manner of trading activities, industrial covers manufacturing and assembly, and professional describes most service industries.
Many free zones cater to a broad spectrum of businesses and freelancers, across many industries and license types.
UAE free zones play a huge role in attracting entrepreneurs to the region. By complementing the country’s already attractive tax and business environment, free zones can help to streamline operations, reduce costs and facilitate access to large and growing markets.
The top five benefits of setting up in a UAE free zone are ease of doing business, tax benefits, the established ecosystem of businesses, access to global markets, and diverse business opportunities. Let us look at these factors one by one.
Ease of doing business Starting and running a business in a UAE free zone is incredibly straightforward, with online applications on offer in most cases. As free zones are self-governing, there is usually no need to obtain additional approvals before you can start trading.
Free zones offer a variety of workspace options too, from coworking desks and private offices to warehouses, factories and land for development. Many also have on-site leisure facilities and staff accommodation.
Once you are up and running, free zones offer a range of business support services, including visa assistance and other government administration, mail handling, telecoms and more.
Tax benefits The UAE boasts a highly competitive tax regime, being one of the few countries to levy 0% on corporate and personal income. However, the UAE will levy a 9% corporate tax starting June 2023, which will still be one of the world’s lowest corporate taxes. The only notable widespread tax out here is VAT which remains low at 5%.
Setting up in a UAE free zone brings further enhancements to these benefits. All free zone companies are 100% exempt from customs tax, while some are not required to pay VAT.
Free zones in UAE offer a great opportunity to work among like-minded business people.
As soon as you obtain your business license, you step into an established ecosystem of successful business owners, giving you fantastic opportunities for networking and collaboration.
Many free zones also offer accelerator and incubator initiatives for startups and SMEs, as well as assistance finding VC funding for businesses of all sizes.
Access to global markets With no income or customs tax to pay, UAE free zones are highly advantageous for those wishing to trade with markets worldwide. As most free zones are well-connected by land, sea and air, they are built for large import and export operations.
Add to this the UAE’s prime location and direct links with markets in the Middle East, Europe, Asia and Africa and there can be few, if any, better locations for global trade.
Diverse business opportunities While free zones can foster industry-specific support, the welcoming policy of many others offers a multitude of diverse opportunities.
Some free zones in the UAE are open to hundreds, if not thousands, of business activities, potentially giving you access to new markets and revenue streams.
As with any business decision, there are many factors to consider before choosing a UAE free zone, including:
Business activities While some free zones are open to all, others are limited to specific industries, so your business activities will play a huge part in where you can set up.
While industry-specific free zones can be advantageous, you should also consider the networking and business opportunities on offer at cross-industry locations, too.
Premises Free zones offer a wide range of office space and other business premises, so it helps to have a good idea of what you require.
If you are a service business with a few employees, a private office may be enough. However, if you intend to start a large-scale manufacturing or distribution business, then you are likely to require warehousing or factory space.
The good news is, whatever facilities you require, you are almost certain to find them in a UAE free zone.
Location There are several reasons why location is a vital factor when choosing a free zone in UAE. For one, it can have a considerable impact on your bottom line. The cost of labour, business premises and accommodation can vary significantly from emirate to emirate, so it is worth looking throughout the country to see how they compare.
Services and facilities The facilities on offer can also vary greatly between free zones. While some offer standard mail and call handling services, others provide a full concierge plus assistance with accounting, marketing, IT and much more.
You should also investigate other practical facilities and utilities such as internet speed, parking and 24-hour access.
Ras Al Khaimah Economic Zone (RAKEZ) is situated in the heart of Ras Al Khaimah, less than an hour from Dubai.
The free zone is open to businesses of all sizes, from freelancers and startups to multinational enterprises across more than 50 industries. Today, RAKEZ is home to over 16,500 companies from more than 100 countries.
Businesses setting up in the free zone can benefit from a choice of workspaces, including coworking desks, shell and core and serviced offices, warehousing, land for development and more. RAKEZ also offers ten license types, including commercial, industrial, professional and e-commerce, as well as freelancer permits.
Other benefits of setting up at RAKEZ include:
• Free zone and non-free zone entity formations • One-stop shop for all government services • Connectivity to major logistical hubs • 100% foreign ownership • Wide-ranging business and industrial facilities • Fast and efficient business set-up processes • Easy access to markets across MENA, Europe, and Asia
The required steps and procedures for setting up in a free zone will differ slightly depending on your chosen jurisdiction. Let’s look at some of the universal aspects of the process, to give an idea of what’s involved.
Step 1: Outline your business activities As mentioned above, your business activities will greatly affect the free zone that’s right for you. So, the first step is to clearly define those that you intend to carry out.
This will speed up the process of finding the most suitable free zone and ensure you are correctly licensed.
Step 2: Pick a suitable company name Choosing an appropriate name for your business is not only crucial for paperwork, but it also reflects the identity of your brand. So, you should think carefully about how well your chosen name represents your offering and ethos.
On top of this, you will need to adhere to the naming rules laid down by the UAE government. One of the main points to bear in mind when choosing a business name is to avoid obscene or indecent words that may offend the general public. You should also refrain from using words or names containing religious attributes.
Step 3: Make your license application The next step is to make your license application. Before submission, you will need to prepare some basic documentation, including: • Copy of your passport and visa. • Copy of your Emirates ID or entry visa stamp (for non-residents). • Copy of the passport and visa of partner/s (if any). • Two coloured passport-sized photographs. • Additional business documents such as the business plan and other necessary documents supporting your company. These may include no-objection certificates and approval letters from various government entities.
You can then apply directly to your chosen free zone, online, in person or via the mail.
The exact cost of setting up your free zone business will depend on your chosen location and business activities, as well as your company size.
RAKEZ offers a business license package from just AED 5,499, guaranteed for three years, which includes the use of the organisation’s coworking space.
Another option is the all-inclusive visa for life package, which includes a license and UAE residency visa for just AED 16,500 per year.
In addition to supporting the company formation and visa process, RAKEZ offers easy payment plans through its banking partners, so you can spread the cost of company setup.
The support on offer from RAKEZ extends way beyond launch. The free zone’s expert team can also assist with business bank account opening, VAT registration and filing, and all matters relating to UBO and ESR.
Other value-added services include:
• Attestation • Translation • E-services and typing assistance • Pro services • Insurance • Consultancy • Recruitment and staffing • Procurement • Creative and printing
Whatever your business idea, RAKEZ can help make it a reality. Our application process is simple, and our packages are affordable. Moreoever, you can start your UAE free zone company under 5 minutes with RAKEZ instant business license quick online process.
With the RAKEZ business set-up packages, you will get a UAE trade license, use of our coworking space, and a host of value-added services, including business bank account opening, VAT, accounting and compliance assistance.
Ready to get started? RAKEZ is here to help you with your UAE business setup.
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