The United Arab Emirates (UAE) is undoubtedly one of the premier locations to set up a business. However, once you look into it, you might also get overwhelmed by the various options for business setup in the UAE. On top of that, there are multiple legalities associated with where you decide to set up your business in the UAE. In this article, we will help you with some tips on how to select the best place to set up a business in the UAE. Not only will it give you some clarity on the available options but also give you a rough framework for choosing the best place to set up your business.
1. Decide between the mainland and the free zone first First things first, you should decide whether you want to set up your business in the UAE mainland or a free zone. A UAE mainland company refers to onshore business enterprises in the emirates that are governed by state law. Whereas, free zones are special economic areas in the UAE that operate under their specific set of regulations. There are more than 40 free zones in the UAE. Some major advantages of setting up your business in free zones are: - Low to no corporate taxes - Infrastructure setup for your specific business needs - 100% foreign ownership for legal entities - Simple business setup procedure and more. Free zones are great options for you to start a business in the UAE. However, you should still go through a detailed comparison between mainland and free zones. 2. Types of business activities allowed Once you have decided between mainland and free zones, the next important thing is to decide what business activities you are going to undertake. Various jurisdictions in the UAE permit a specific set of business activities. Once you have clarity on the nature of business activity, you will automatically have a better understanding of which jurisdictions are most suited to your business. It might be the case that your business would warrant a licence for more than one business activity type. In such a case, you go with a free zone that allows a wide range of business activities and also lets you avail of more than one business activity licence. Ras Al Khaimah Economic Zone (RAKEZ) is one such free zone where you can find a lot of options for permitted business activities. 3. Consider the facility types you need Now that you have clarity on the business activities, the next thing you need to do is ensure you get all the necessary facilities to support activities. In most cases, you will need a physical office for the business. Based on the specifics of the business, you might do away with just a shared co-working arrangement or might need a full-fledged office space for the company. Secondly, you might also have to look into other requirements like warehouses, accommodation for the workforce and more. Make sure that you can easily get all the necessary services and infrastructural facilities you need for smooth business operations. 4. Check if the location is suitable for your business Based on the nature of your business, location can play a huge role in the success of your business. Let’s assume you are planning to set up an import-export business in the UAE. In this scenario, the proximity of ports and other transit points will affect your unit's economics. Similarly, the nature of your business can be such that you would want to regularly hold meetings with people moving in and out of the area. In this situation, it would be ideal for you to have an office closer to the nearest airport. Make sure you have a good idea of the connectivity of the region for various business requirements. It will help you a lot in the long term to make the business successful. 5. See what legal entity types are allowed Another important factor when it comes to selecting the best place to set up a business in the UAE is the business entity type. Various authorities in the UAE allow a specific set of business entity types. The type of business entity decides the regulations applicable to the business. In UAE free zones, there are primarily three types of legal company structure allowed namely: - Free Zone Limited Liability Company (FZ LLC) - Free Zone Company (FZ Co.) - Free Zone Establishment (FZE) 6. Find out the initial cost of setting up the business Finally, you would also want to look at the initial cost of setting up the business in various jurisdictions of the UAE. You should account for licensing costs, rent, visa charges and more. All of these will help you get a realistic estimate. The business setup cost is going to vary across jurisdictions in the UAE. A realistic estimate of the cost will help you select the best place for setting up a business in the UAE. Conclusion When it comes to initial business setup and the associated costs, RAKEZ is one of the best free zones for entrepreneurs. Experienced professionals assist you at every step of the way and provide guidance on everything such as legal entity, licence type and facilities. Once the requirements are honed down, you can get a customised package that fits all your specific business needs. Contact RAKEZ to know more.
Q: What is the difference between setting up a business in the UAE mainland and a free zone? Ans: UAE mainland company refers to onshore business enterprises governed by state law, whereas free zones are special economic areas with their own regulations. Free zones offer benefits such as low to no corporate taxes, 100% foreign ownership and simplified business setup procedures. Q: What facilities should I consider when setting up a business in the UAE? Ans: Determine your need for physical office space, warehouses and accommodation for your workforce. Ensure that the chosen location provides the necessary infrastructure and services for smooth business operations. Q: How important is the location for my business setup in the UAE? Ans: The location can significantly impact the success of your business. For instance, if you have an import-export business, proximity to ports and transit points is crucial. For businesses requiring frequent meetings, being close to an airport can be beneficial. Q: What types of legal entities can I establish in UAE free zones? Ans: UAE free zones primarily allow three types of legal company structures: Free Zone Limited Liability Company (FZ LLC), Free Zone Company (FZ Co.) and Free Zone Establishment (FZE). The choice of entity affects the applicable regulations.
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