The United Arab Emirate’s free zones are one of the nation’s biggest economic success stories. Encouraging enormous amounts of entrepreneurialism and exciting opportunities, free zones have supercharged the UAE’s business environment since the first free zones opened here in the 1980s.
According to an article by Arab News, there were over 60,000 free zone businesses registered in the UAE in 2021 – a 4.4 per cent increase on the year before. This shows just how popular Dubai free zones are.
So, if you’re thinking of starting a company in Dubai in 2022, you’ll need to be more than familiar the formation process and the benefits of starting out at a free zone. When you work with Meydan Free Zone, our expertise is yours. We’ll help you start your business here, assist with visa processing and liaise with all relevant authorities on your behalf.
What is a free zone business?
Free zone businesses are those which operate from designated economic zones within the UAE. They differ from mainland businesses in several ways. Most notably, free zone businesses can be owned 100 per cent by a foreign investor in all cases.
Free zone businesses can trade freely internationally from their designated free zone as well as locally within the UAE with the assistance of a local agent or distributor.
Can free zone companies do business in the mainland?
Following recent changes to regulation, companies carrying out certain business activities can open physical offices to trade in the mainland. Trading in this way requires a No Objection Certificate from the free zone as well as approval from the Dubai Department of Economic Development (DED).
That being said, many free zones do not permit direct business in mainland Dubai. These companies are only permitted to trade internationally or locally with other free zone entities. Non-compliance can lead to significant fines. However, there are a number of ways that free zone companies can trade with the mainland if they decide they would like to.
These include working with a distribution partner that is registered in the UAE mainland or opening a branch office.
Advantages of doing business in a Dubai free zone
Starting a business in a Dubai free zone brings multiple advantages. These include:
0 per cent income tax
Being based in a Dubai free zone allows you to enjoy a number of tax benefits, which means you keep more of your profits. Business owners can enjoy 0 per cent income tax rate and no customs taxes, excluding import products sold to the mainland. However, VAT is also applicable for business owners in a non-gated free zone, such as Meydan, who wish to do business with a gated free zone.
100 per cent foreign ownership with limited liabilityFree zones permit 100 per cent foreign ownership with limited liability – giving foreign entrepreneurs greater personal protections when trading from the UAE. Mainland in turn offers unlimited liability with 100 per cent foreign ownership.
Greater opportunities for diversification
Free zone businesses can set up with multiple unrelated activities under a single license. This allows entrepreneurs to trade in numerous fields through one business and potentially pivot into new spaces as required.
What is the difference between a free zone and an LLC in Dubai?
An LLC operates in the UAE mainland and its structure is similar to a corporation. Businesses can conduct any business activity permitted by the DED and enjoy complete protection from liability.
On the other hand, a free zone is a special economic area in the UAE that is governed by its respective authority. Generally speaking, a free zone license does not require approval from external authorities. Other benefits include 100 per cent foreign ownership, and flexidesk.
How much does it cost to open a free zone company in Dubai?
The cost of opening a free zone company in Dubai depends on the number of visas that your business needs for its staff. At Meydan Free Zone, companies that do not require any visas pay as little as Dh12,500 to set up their company. The price rises for each subsequent visa required, with visa applications costing Dh1,850 per additional visa (although special rates are normally available when purchasing 50 visas or more – all the way up to 200 visas with Meydan Free Zone). With our easy payment plan, you can pay as little as Dh1,042 per month and launch your business immediately.
Why choose Meydan Free Zone?
Meydan Free Zone is a premium free zone built for work, rest and play. As well as a wide variety of comfortable office spaces, it’s home to tennis courts, the world’s deepest pool – Deep Dive Dubai, homes, hospitals, clinics, shops and more. Just a short drive from Dubai’s airport and seaports, it is also right next to the Meydan golf course and racecourse. With 24/7 access and all the technological support you need, Meydan Free Zone provides you with an excellent place to begin your journey as a Dubai entrepreneur.
Our friendly and efficient consultants can help you with all aspects of business setup in Dubai, and if you need help with things like trading goods and services in the mainland, we can also advise you on the best option for you. This means you can grow your business without limits.
We also offer several additional services to help your business expand and grow, including Meydan Commerce – our e-commerce support service; Meydan Pay – the first and only solution in the region that provides new businesses with a guaranteed IBAN once your compliance checks have been completed; and our Easy Payment Plans – which allow you to spread the cost of starting your Dubai free zone business over the course of 12 months
To find out more, visit the website, or get in touch with the free zone via firstname.lastname@example.org or 800FZ1. If you prefer, you can visit the Meydan Free Zone Business Centre, Mezzanine Floor, Meydan Hotel, Meydan Road, Nad Al Sheba 1, Dubai, UAE.