Establishing a company in the free zones in the United Arab Emirates is considered a strategic step for any investor seeking to benefit from the unique investment environment provided by these areas. Free zones are distinct environments that offer great incentives such as tax exemptions, flexibility in repatriating capital and profits abroad, in addition to 100% full ownership of the company by the foreign investor, features that are not available in other places within the country.
Through this article, we will discuss in detail the procedures for establishing a company in the Free Zone , where we will begin by choosing the appropriate type of company, and then review the documents required for the establishment process. After that, we will discuss the detailed steps of the registration procedures, starting from reserving the trade name up to reviewing the competent authorities. We will provide you with a comprehensive guide that will help you understand all the details and requirements necessary to successfully establish your company in the Free Zone.
Procedures for establishing a company in the Free Zone
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Choose the type of companies in the Free Zone
When considering establishing a company in free zones , choosing the type of company is a crucial step that affects its legal and administrative structure, as well as its financial and tax obligations. There are three main types of companies that can be established in free zones: limited liability company, subsidiary company, and representative office. In this paragraph, we will review each type of these companies and their advantages.
A limited liability company
The Limited Liability Company (LLC) is one of the most popular among entrepreneurs in free zones. This company is distinguished by giving shareholders legal protection, as their liability is limited to the amount of their contributions to the capital only. This type of company is suitable for small and medium enterprises, as well as companies that want to reduce financial risks to shareholders.
Among the advantages of a limited liability company:
- Protecting shareholders’ personal assets.
- Flexibility in distributing profits and losses among shareholders.
- Ease of transferring ownership between shareholders.
Company
A subsidiary is a branch of a parent company located outside the free zone or outside the country. This company is considered an extension of the parent company and operates under the same brand and management. This type of company is suitable for larger companies that want to expand their business and enter new markets without having to create a completely new legal entity.
Among the advantages of the subsidiary:
- Benefit from the reputation and brand of the parent company.
- Facilitating operations and cooperation between the parent company and the branch.
- Reduce operational costs by leveraging shared resources.
Representative office
A representative office is a type of company that aims to represent the parent company in the local market without carrying out direct business activities. This type of company is suitable for companies that want to conduct market studies, build business relationships, and promote their products and services without engaging in direct sales.
Features of the representative office:
- No need for large capital.
- Reducing legal and administrative obligations.
- Focus on building relationships and exploring business opportunities.
By choosing the right type of company, entrepreneurs can achieve their business goals efficiently and effectively, and benefit from the advantages that free zones provide.
Documents required to establish a company in the Free Zone
When starting to establish a company in the Free Zone , you must collect and submit a set of necessary documents to ensure that the registration process goes smoothly. These requirements vary slightly depending on the type of company and designated free zone, but there are some basic documents that are often common to most zones. These documents include:
- a copy of the passport
A valid passport copy of all partners and major shareholders in the company is an essential document required. The copy should be clear and contain all the important pages such as the page containing the profile picture, issue and expiration date. Some free zones may also require certified copies of the passport.
- Action Plan
Submitting a detailed business plan is a vital part of the registration process. The business plan should include information about the company’s expected activity, main objectives, organizational structure, and marketing strategy. The aim of this document is to provide a comprehensive vision of how the company will be operated and developed in the future, helping the authorities to assess the feasibility of the project.
- Good conduct certificate
A certificate of good standing is required to ensure that the major shareholders and partners of the company do not have a criminal record. This certificate can be obtained from the competent authorities in the country of residence. Some free zones may require a certificate of country of origin if shareholders reside in a different country than their country of origin.
Besides these basic documents, some free zones may require additional documents such as lease contracts, lists of shareholders, and financial certificates. It is necessary to review the specific requirements of each free zone and ensure that all required documents are provided to avoid any delays in the registration process.
Procedures for establishing a company in the Free Zone
The process of establishing a company in the Free Zone requires a set of administrative and legal steps to ensure compliance with applicable rules and regulations. In this section, we will discuss in detail the basic procedures that must be followed to successfully register your company.
- Trade name reservation
The first step in the registration process is to reserve the company’s trade name. A name must be chosen that reflects the identity and activity of the company and complies with local rules and regulations. Most Free Zones offer electronic services that allow you to check the availability of the desired trade name and submit a request to reserve it online. It is preferable to have name alternatives in case the first name is not available.
- Submission of the application
After reserving the trade name, comes the stage of submitting the official application to establish the company. This application requires submitting a set of necessary documents such as a copy of the passport, business plan, and certificate of good conduct. The application form must be filled out accurately and all required documents must be submitted to the responsible body in the Free Zone. Requirements can vary slightly between different free zones, so it is best to check the specific requirements of the free zone in which you intend to establish the company.
- Authorities review
After submitting the application and required documents, the competent authorities in the Free Zone will review all documents and verify their authenticity. This process may take some time, as we verify the accuracy of the information provided and ensure it complies with local laws and regulations. In the event of any deficiency or error in the documents, additional documents may be requested or existing errors may be corrected.
- Receiving the commercial license
After successfully passing the authorities review stage, the company is issued a commercial license. This license allows you to start doing business officially within the Free Zone. You must retain a copy of this License and update it regularly in accordance with the legal requirements of the Free Zone.
- Open bank account
After obtaining the commercial license, you can open a bank account in the name of the company. This step is essential for conducting financial transactions and managing the company’s finances. Most banks require a copy of the business license and other company-related documents to be submitted when opening an account.
By carefully following these procedures, you can establish a company in the free zone smoothly and efficiently, allowing you to benefit from the many advantages that these free zones offer.
Establishing a company in the Free Zone offers many benefits and facilities that make this step attractive to many investors and entrepreneurs. By choosing the appropriate type of company, accurately submitting the required documents, and adhering to registration procedures, anyone can benefit from the supportive investment environment and advanced infrastructure provided by Free Zone.
It is crucial that this step is planned carefully, and that the legal and economic advice available is taken advantage of to ensure that the process runs smoothly and successfully. Remember that establishing a company is not just a legal procedure, but it is also the beginning of a new adventure that requires effort and commitment to achieve the desired goals.
In short, the Free Zone provides an ideal platform for business growth and expansion, making it an attractive option for those wishing to move towards a promising career future.
The most important frequently asked questions about the procedures for establishing a company in the Free Zone
What are the steps after obtaining initial approval?
After obtaining initial approval, complete documents must be submitted and the required fees must be paid to obtain the final license and company registration.
What is the time period required to establish a company in the Free Zone?
The duration varies depending on the free zone and the required procedures, but the process usually takes from a week to a month.
Does establishing a company in the Free Zone require a local partner?
No, establishing a company in the Free Zone does not require a local partner, and foreigners can own the company 100%.
What are the costs associated with establishing a company in the Free Zone?
Costs include registration fees, licensing fees, office or commercial space costs, and administrative services costs.
What are the procedures necessary to obtain a commercial license?
Procedures include submitting the application and required documents, paying fees, and signing the articles of incorporation.
