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6 Things to Think Before Starting Business in UAE Free Zones
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6 Things to Think Before Starting Business in UAE Free Zone

company setup in uae freezones

6 Things to Think Before Starting Business in UAE Free Zone

UAE is one of the world’s best business hubs and one important reason for UAE to achieve that status is the presence of special free zones in the country. There are several free zones in all the states of UAE while Dubai and Abu Dhabi are leading the list with most free zones among all the seven states in the country. These free zones are paradise for foreign investors as they are provided with several such incentives in these free zones that are not available in other areas of UAE. It is because, the investors are provided with the opportunity to attain 100% ownership of business along with zero tax on your businesses and products.

But it is also important to get complete information about the pros and cons of business in the free zones of UAE before launching any business. The discussed below things are important points that you should take into consideration before starting a new business in this zone:

1. Different Types of Free Zones

The first thing the investors should know before setting up their business in the UAE free zones is that there are two main types of free zone entities in UAE; Free Zone Company (FZC) and Free Zone Establishment (FZE). In case of FZE, there is just a single shareholder required in the form of a company or a person. Comparatively, 2 or more shareholders (companies and persons) are required in case of Free Zone Company (FZC).

2. Keep some extra Cash

There is no doubt that free zones provide immense opportunity due to low cost and higher business opportunities but you should be aware of the fact that you can face few hidden charges with your business in the UAE free zones. Therefore, it is important to have at least additional AED 5,000 with you while setting up a business in free zones of UAE.

3. Choose according to Business Type

You can get opportunities of various types before setting up business in the free zones of UAE. Due to this, it is very important to choose best type of business according to the area, state, population and other factors. Another thing that should also be kept in mind that few companies can face geographical limitations which makes it utmost important for them to make the best option about their business in the free zones of UAE in order to gain maximum benefit.

4. Avoid Legal Problems

It is important to know that all the 7 states of UAE have their own laws regarding businesses including business in the free zones. It is very important to take a legal advice from the lawyer before opening a company in these 7 states. It might prove expensive but it is helpful in preventing legal problems that you can face while setting and running your business in the UAE free zone.

5. Prohibited Items in UAE Free Zones

Import and export of most of the goods in the UAE free zones are free from taxes and duties but it is important to remember that not all the goods are allowed in the UAE free zones. There are several goods that are prohibited in every part of UAE including free zones of the country like weapons, narcotics, radioactive materials, imports and exports to an economically boycotted country and others.

6. Free Zones for Specific Businesses

The last important thing to consider is that most of the free zones are designated for specific type of businesses. But such restrictions don’t apply in all the free zones of UAE as you can get multiple business opportunities in the free zones like Dubai Multi Commodities Center (DMCC) and Dubai Airport Free Zone (DAFZA).


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