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Category Archives: Free Zone

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Is a local partner mandatory to start a business in the UAE?
Categories Business, Business Setup, Free Zone, FREE ZONE COMPANY, News, Tips

Is a local partner mandatory to start a business in the UAE?

In Dubai & the rest of the UAE it is legally required to have a local partner (UAE national) for entrepreneurs and SMEs looking to invest in a Mainland company or LLC company for the first time. The local partner should hold the majority interest (51% shares) and maintain a controlling stake in the business for all activities that come under commercial or industrial licenses. This type of business start-up with a local partner is called a local LLC. Nevertheless, in the UAE, entrepreneurs and investors who apply for a professional services license have a simple way of getting complete ownership of the business. You only need a national service agent (NSA) who is fundamentally a local sponsor who does not have ownership but should be paid some sort of fixed-payment often as an annual fee in such cases. Registering your company in one of the free zones in the UAE is yet another option and here there is no necessity for NSA. Black Swan is your preferred choice to help in setting up business in UAE, Oman, Mauritius and UK . We can support you in all types of company registrations here and we make it easy for you to start your company. You need not worry about business start-up in a free zone. We at Black Swan, Help you in connection with the best sponsor or Partner in the UAE.

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Cost Effective Free zones in the UAE
Categories Business Setup, Free Zone, uae

Cost Effective Free zones in the UAE

Free zones in UAE are much popular among investors as they offer a whole lot of business support and infrastructure to the investors. UAE comprises around 40 free zones. Freezones in UAE are widely categorized on the business activities they are specialized in. For example, media companies should get themselves registered in Media City free zones like Dubai Media City, Sharjah Media City, and Fujairah Creative Zone, etc. You will be interested on: Free Zone Company Formation

What makes Freezones a popular choice for investors?

Freezones provide benefits to the investors, the most striking one being 100% ownership of the business entity. The other benefits like tax-free environment, secure banking system, fast and easy business set up, world-class infrastructure also attract investors. Various factors determine the popularity of free zones. Freezones in Dubai are most preferred for general trading, service industry, consulting, etc. as Dubai is the centre for most business activities in the UAE. The location of Dubai International Airport is another attraction for services and consultancy businesses to set their base in Dubai. Few direct benefits by setting up a business in Dubai include flying in and out of Dubai hassle-free for business meetings. Freezones in UAE are mostly cost-effective and offer infrastructure and business setup to run your business profitably.

Cheapest free zones in the UAE

There are some free zones in the UAE, which are cheaper and offer the same infrastructure and business benefits more like free zones in Dubai.
International Freezone Authority (IFZA)
IFZA (International Freezone Authority), Fujairah is one of the most cost-effective centres providing profitable solutions to set up your business in the UAE. IFZA has a wide range of office solutions matching international standards, and also warehouse facility built on highest international logistics standard. Flexible rental solutions are available for investors to keep their operational costs to a minimum.
Investor benefits
  • Easy and fast incorporation along with company management
  • A wide range of business activities (Services, Consultancy, Trading, etc.)
  • 100% ownership of your company
  • Facility to set up a Limited Liability Company and get the suffix LLC after your company name.
  • 100% Corporate and income tax exemption
  • No restrictions on foreign currency
  • No need for a physical office
  • Nil share capital requirement
  • The ability to incorporate holding companies
IFZA license types
  • Consultancy license (for professional services like HR consultants, management consultants, etc.)
  • Service license (this best suites production, transformation, and distribution services)
  • Trading license (for companies that trade specific goods)
  • General trading license (for companies trading a wide range of items)
  • Industrial license (for companies involved in raw materials import, production, manufacture, package, and export)
  • Holding license (for the holding of standalone assets/shares of other companies)
General trading license with one visa package costs around 17,500 AED yearly (actual amount may vary slightly)
Ras Al Khaimah Economic Freezone (RAKEZ)
RAKEZ (Ras Al Khaimah Economic Freezone) is a cost-effective business hub with setup packages, modern facilities, along with the first-class service. RAKEZ provides state of the art infrastructure and hi-tech facilities for industrial growth and developments. With a fast and easy setup, and customer friendly environment for investors, RAKEZ is one of the business friendly options. There are around 14000 companies from 100+ countries registered with RAKEZ. There are five free zone parks, which are made such that it suits investor requirements. RAKEZ includes three industrial parks, a business park, and an academic zone. With RAKEZ you have provisions for both Freezone and non-free zone company formation, alongside a wide range of business and industrial facilities. Moreover, easy access to seaports and airports in UAE is an added advantage for investors. Commercial License amounts to 14,800 AED yearly with the facility to conduct five similar activities in the chosen category.
Umm Al Quwain Free Trade Zone (UAQ FTZ)
UAQFTZ (Umm Al Quwain Free Trade Zone) is a better option for SMEs, business groups, and startups. Features like proximity to Dubai, accessibility to international ports, and high notch infrastructure makes it an investor’s choice. UAQFTZ operates as an autonomous free zone from 2014 and is expected to have a rapid adoption in the years to come.
  • Licenses issued by the UAQFTZ
  • Commercial
  • Consultancy
  • Industrial
  • Services
  • Freelance permits
  • General Trading
Commercial License consisting of two visa packages amounts to 20,500 AED yearly (Actual amount may vary)
Ajman Media City Freezone
Ajman Media City free zone is one of the most competitive and fastest-growing free zones in the UAE. It contains significant business setups along with top-notch infrastructure. Ajman Media City is the perfect place for media and entertainment companies to set up offices with a cost-effective platform best suited for profitable business establishments.
Types of companies that can be formed in Ajman Media City free zone
  • Freezone Company (FZCO)
  • Freezone Establishment (FZE)
  • Branch of a UAE company
  • Foreign Company branch
  • A subsidiary of a foreign company
Benefits
  • 100% foreign ownership
  • No corporate or income tax
  • 100% repatriation of capital and profits
  • Fast license issue (Within two days)
  • One license, multiple business activities
  • The easy and fast registration process
Commercial license with one visa package amounts 11,952 AED yearly (Actual amounts may vary) UAE is one of the dream destinations to allow your business to flourish with the perfect location and business license types. Choosing UAE as your business destination is inevitable as there are many perks like world-class infrastructure, proximity to air and seaports, strategic location, banking facilities, support from the government for entrepreneurs, etc. You can always call us to know more about low-cost business set up options in the UAE to start your new business.

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mainland-vs-free-zone-company-formation-in-dubai
Categories Business, company, DUBAI MAINLAND, Free Zone, Oman

Mainland vs. Free Zone Company Formation in Dubai

MAINLAND COMPANY

An LLC (Limited Liability Company) is the earliest and most commonly known structure in the global marketplace. LLCs are limited by their shares and are defined by the liabilities of the company. In order to form an LLC, a minimum of 2 to a maximum of 50 shareholders is necessary. In order to encompass such an ensemble, with regard to the UAE law, a UAE national (individual or corporate) should own 51% of the shares while the remaining 49% is allotted to the other expatriate shareholders of the company. The major benefit of Mainland companies is access to the UAE Market.

Business Overview

Mainland companies are at ease of carrying out their business activities throughout the UAE market, either inside or outside, without limiting their access within the Free zone alone.

Structure of Ownership

  • The presence of a UAE National is mandatory in mainland licenses either as a National servicing Agent or a local partner
  • In an LLC, 51% of the shares rest with the UAE National while only 49% is allotted to the expatriate partner.
  • In the case of a professional license, 100% of the shares rest with the expatriate partner while a UAE National is appointed as a National Service agent.

Office Space

In the case of mainland license, a 140 square foot office is mandatory along with an Ejari (Dubai), or Tawtheeq (Abu Dhabi). Only after producing these documents to the Department of Economic Development, the license will be released.

Visa Eligibility

Mainland ensembles don not have limitations. The MOL (Ministry of Labor) issues an Electronic Quota to every company highlighting their visa eligibility. This can be increased by increasing your office space, as you will be allocated 1 visa for an 80 square foot office space. In case of the presence of external staff like drivers, sales professionals, etc. a separate quota can be applied without affecting the office space quota.

Approvals of Governing bodies

  • It is mandatory in case of a mainland license to get approval from concerned departments like Dubai Municipality (DM), Department of Economic Development(DED), Ministry of interiors or Immigration (MOI), Ministry of Labor (MOL)
  • Certain circumstances, the third party governing licenses are also needed depending on business activities. This includes KHDA (Knowledge and Human Development Authority) approval for education-related activities, DHA (Dubai Health Authority)/HAAD (Health Authority Abu Dhabi) for medical activities, Civil defense for security-related activities, Food Control Department of Municipality for a food-related license, RERA (Real Estate Regulation Authority) for real estate activities.

FREE ZONE COMPANY

Free zones are different from the mainland owing to the fact that it’s an isolated land or setting with different tax, import, and customs regime. The major advantage is that a free zone company does not have to give out the shares, the expatriate can own 100% of the shares.

Business Overview

  • Free zone companies are allowed to conduct businesses only in specific free zones or outside UAE but are not authorized to sell their products or provide services in the UAE mainland.
  • Even though the local business is restricted for free zone companies, the distribution of products through a distributor having a mainland license is possible. This particular distributor can act as your local agent and charge a certain fee (lower than 5% on free zone invoices) to trade into the local market. The distributor is responsible for shipping the goods if not so, a 5% duty fee needs to be paid for goods leaving the free zone
  • Marketing your company is also possible only inside the free zone, which may even be a face-to-face or business card handouts.

Structure of Ownership

A company in the free zone can be handled 100% by the expatriate without the need for a UAE National or a service agent.

Office space

A free zone license can be procured with or without a physical office. The license holders are at ease to use a smart/Flexi office, but with due restrictions on visa allocation.

Visa Eligibility

The visa allocation is limited in the case of free zone companies from 1-6 visa packages. In the case of more visa requirements, you will have to rent a physical space inside the free zone. Renting physical spaces inside the free zone is pricey due to the high demand for commercial space and limited supply.

Approvals by Governing bodies

Approval from external authorities is usually not required by free zone authorities as free zone facilities are mainly for the import and export of goods. It is to be noted that no external approvals from governing bodies outside the free zone are entertained.

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SHAMS FreeZone Company Setup FAQ
Categories company, Free Zone

SHAMS Free Zone Company Setup FAQ

Can I live and have a bank account in Dubai if I register a company in a free zone outside of Dubai?

Yes, you can establish a corporation outside of Dubai but reside in Dubai or another Emirate. You are not need to live in the same Emirate as your visa. You can also open a bank account with any UAE bank of your choice in a Dubai branch.

Is it possible to open a bank account from afar?

No, you must travel to the UAE yourself. It is a requirement of the UAE Central Bank, which must be followed by all local banks. A personal visit is required to ensure that the bank recognises the client.

Do banks offer debit or credit cards, as well as loans?

If there is only one shareholder, you can usually receive a debit card for your freshly formed company. You can also get a credit card, but only if you put down a deposit. It is feasible to obtain a loan, but you must demonstrate your company's activities and profits to the bank. A bank may issue a loan after reviewing your company's turnover and profitability. We recommend applying for it once the company has been in existence for at least one year.

Is it possible for a free zone corporation to have offices outside of the free zone?

A free zone firm's official office must be located exclusively within the free zone where the company was registered. If you require an office in Dubai, you can rent a space at a business centre and use it on a monthly or daily basis, depending on the package you select. The free zone's minimum necessary space (flexi desk) cannot, however, be removed.

Why do I require a movable desk or office?

Any company that wants to apply for resident visas must have a flexi desk. The UAE government requires it because it is the bare minimum of physical office space that any company with a visa must have. Aside from that, the flexi desk is useful for opening bank accounts. The bank's compliance department has to see that a company has an office or at the very least a tiny physical seat where it can work.

If our company is registered in the Free Zone, do we have to pay VAT?

The company's VAT duties are defined not only by where it is incorporated, but also by where it currently operates. To begin, VAT becomes applicable when your taxable turnover exceeds 375 000 AED. The term "taxable turnover" refers to business conducted in the United Arab Emirates. Because the transactions are taking place outside of the UAE, if your firm is registered in a Free Zone but your trade takes place outside of the UAE (for example, you sell goods from India to Africa), your turnover is not taxable. It implies that you are exempt from paying VAT.

Do I owe any additional taxes?

Income and corporate taxes are not levied in the United Arab Emirates. It only has a 5% import tax on products that you bring into the nation and a 5% VAT on any trading or service activities that take place in the UAE.

What makes a free zone company better than an offshore or a mainland company for me?

Everything is dependent on your business model and requirements, but for the most part, a free zone structure is the best option. In contrast to mainland companies, which require a local partner or agent, a Free Zone company can have 100 percent foreign ownership, be eligible for resident visas, conduct business both in and outside of the UAE, be treated more favourably by banks than offshore companies, and have a flexi desk space rather than an executive office. A Free Zone is an excellent method to create a business for a low charge and with no strings attached.

Can you guarantee the activation of a bank account?

When we set up your firm, we try our hardest to make it as simple as possible for you to open an account. We can provide you an estimate of the odds of a successful account opening based on your background and business style. The bank is solely responsible for the account's approval. Before an account can be opened, each case must be approved by a few different divisions inside the bank. If the bank has any questions or requires additional information, it will contact you personally. The more information you provide about your company to the bank, the better your chances of getting an account opened.

Should I keep my business? When? How much does it set you back?

Yes, the business should be renewed on an annual basis. The renewal fee is usually lower than the setup fee. It is determined by your company's bundle. By downloading the Estimate from this page, you may acquire the pricing. Renewal does not necessitate the owner's presence and can be handled by your agent. The new licence must be presented to the bank after the company has been renewed in order to prolong the bank account.
Documents necessary to establish business in Dubai South Free-Zone
Categories Business Setup, Free Zone, FREE ZONE COMPANY, How To

Documents necessary to establish business in Dubai South Free-Zone

Given below are the list of Documents to establish business in Dubai South Free-Zone

Documents For Branch setup Dubai South Free-Zone

Given below are documents required to setup a branch office in Dubai south free zone
  • Incorporation certificate (duly attested, notarized and legalized)
  • Foreign language documents are to be translated into Arabic/English and done only by legal translators, attested and notarized.
  • MAA (Articles & Memorandum of Association) of parent company (duly notarized, legalized and attested)
  • Power of attorney or Signatory authority for 3rd party (duly signed, legalized and attested) to be done with Board resolution.
  • Branch (signed) to be established with Board resolution.
  • General Manager’s Passport copy.
  • Valid trade license or some equivalent (duly attested, notarized and legalized) along with good standing certification.

Documents For LLC company Setup in Dubai South Free-Zone

Given below are list of documents required to setup LLC company formation in Dubai
  • Incorporation Certification (duly attested, notarized and legalized)
  • Essential Foreign language documents to be translated into Arabic/English are to be performed by legal translators, attested and notarized.
  • Board Resolution providing power attorney or signatory authority for 3rd party (duly attested, signed and legalized)
  • Board Resolution for setting up a company (duly signed).
  • Manager/Secretary/Director’s Passport copy.
  • Good standing certificate along with valid trade license or anything equivalent (duly attested, notarized and legalized).
Read more on :

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Establishing Business in UAE Freezone – Some points to remember
Categories Business Setup, Free Zone, FREE ZONE COMPANY

Establishing Business in UAE Freezone – Some points to remember

Establishing Business in UAE Free zone: In UAE, Freezone Business Setup is considered to be an assuring choice for start-up ventures in Dubai. Foreign investments are encouraged by the government prior to the 2020 Dubai Expo and to help entrepreneurs to derive lots of opportunities. Freezone company setup option is perhaps found to be the most preferred business setup in UAE.

The UAE Economy Ministry in coloration with different UAE free zones has concluded to strengthen mutual corporation means and to discover partnership. UAE freezone company setup, as globally known is stated to be economic freezone jurisdiction or free economic region offering business establishment within the region with optimum benefits like complete ownership, tax benefit, capital and profit repatriation, no charges on export and import, free fund transfers, no custom duty, less regulations and monitoring, work module freedom, etc. UAE’s Freezone business setup actually regarded to be every entrepreneur’s haven.

Moreover, UAE’s Freezone Business Setup is regarded to be a swift procedure to incorporate an establishment in the UAE and this is not any expensive affair. Having all good factors, some precautionary points are also to be taken into consideration from the entrepreneur’s prospective.

Given below are few points to consider prior to establishing business within UAE Freezone

Precise selection: Different options can be availed at UAE freezone related to legal type, jurisdiction, establishment process, legal structure, regulations, independent rules, numerous regions, etc. Prior to establishing business in the UAE freezone, precise selection of parasol is essential to ensure what suits your company and your specific requirements.

Be well informed: You need to have in-depth knowledge pertaining to company formation process in the freezone and about timely indication of implemented laws, which can prove to be an advantage. In such scenario, the best option is to avail proper guidance from the organization’s company formation advisors. You can now better focus upon your business, while your consultants will take care of the business formalities. This indicates business setup witnessing pattern changes and assures deriving the latest services.

Difference between FZCO & FZE: Getting to understand the difference between Freezone Company Formation and Freezone Establishment will be essential prior to formation of freezone company. Freezone company is considered to be a limited liability organization, bound by two or more share holders, while the Freezone Establishment is sole entity established and has just one shareholder. The major difference noticed is share capital requirements, although both offer similar operational recompenses.

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STARTING A CONSULTANCY COMPANY IN DUBAI FREE ZONE?
Categories Business Setup, Consultancy Company, Free Zone

Starting a Consultancy Company in Dubai Free Zone?

Budding capitalists vouch by UAE as the business paradise due to its pro-business and tax-free free zones. The commercial and legal frameworks are simple and straightforward thereby attracting many budding entrepreneurs. UAE is slowly gaining an economic foothold in the international and local market and hence is known to provide an encouraging scenario for the new startups. The current prevailing market trends attract diverse sectors for investment from set up of incorporated businesses to export and import sector. An encouraging market scenario and infusion of newer technology tools attract business owners with a futuristic vision. Business owners are hence required to adhere to the futuristic business requirements. This necessitates that one appoint a professional consultant well-versed in the technological trends that a business needs to abide by, who will be able to provide expert guidance in this regard. To set up a consultancy company in the UAE, one has to acquire a large clientele base besides providing business provisions like stable profits and growth incentives. Consultancy business is a flourishing opportunity in Dubai. If you set it up in one of the Free Zones, you would reap greater benefits. Follow the information to know what it takes to start a consultancy firm in Dubai Outsource Free Zone.

About Dubai Outsource Free Zone(DOFZ)

Knowing more about what Dubai Outsource Free Zone offers for your business helps you in planning your set up of consultancy company in Dubai. DOFZ is a specific economic zone aiming to pool pioneers and individuals from the consultancy sector at one place to offer quality infrastructure and premium standards of service. DOFZ provides a tax-free dominion besides offering legal protection and economic stability for setting up a consultancy company. Significant types of business activities that are set up in DOFZ include:
  • Outsourcing Services,
  • Professional Consulting Services,
  • Remote Outsourcing Services and
  • Professional training.

Setting up your Consultancy Company in Dubai Free Zone

Setting up your company in DOFZ requires you to provide a name to your company (which is not already registered with DOFZ) and register it with DOFZ. This registration should be followed up with formalities to obtain a Professional Service License or PSL from the DOFZ. This license is mandatory to provide professional consulting services to clients. This license will also entitle you to retain 100% ownership and capital repatriation. To obtain the PSL you must have a Local Sponsor or Local Service Agent that is, a business partner. You may choose to have LSA as a sleeping partner. A sleeping partner does not claim any authority over your business decisions, profits and shares.

How does Blackswan help you?

Blackswan is a pioneer in the business consultancy sector in the UAE. We have assisted reputed clientele in setting up their business in this region. If you are an interested investor seeking consultancy firm ventures in Dubai Free Zone, we can help you with the acquisition of the license, follow up of protocols and procedures. Do talk to us to seek expert advice. We are just a call away. We are a leading business consultancy in UAE with a reputation for assisting various clients in setting up their businesses across the region. If you want to set up your consultancy firm in Dubai Free Zone, then Blackswan can help you with the license acquisition and business setup procedures. Please take out a moment to talk to our experts who are available at your service just a call away.

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Differences between Dubai Mainland and Dubai Free Zone Business Set Up
Categories Business Setup, dubai, Free Zone, News

Differences between Dubai Mainland and Dubai Free Zone Business Set Up

Differences between Dubai Mainland and Dubai Free Zone Business Set Up: It can get quite confusing to not know where to start you business in Dubai, whether on the mainland or in the free zone and what are the differences?

Dubai Mainland companies are licensed and incorporated by the Department of Economic Development (DED) and can do business locally and internationally without any restrictions. Whereas, business companies in the Dubai Free Zone are limited to functioning only in that zone of the respective emirate and cannot expand into the mainland. Upon comparison of the criterion that suits you well, you can make the decision of where to set up your business in Dubai.

The Scope of Business

Mainland Company: There are no restrictions. It can do business in the local market, free zone or go international.

Free Zone Company: The FZ companies can only do business withing the free zone of the emirate or outside of UAE, on international grounds.

Ownership

Mainland Company: A local sponsor is needed to incorporate the business, and the expat partner can only hold 49% of the shares and 51% goes to the UAE local body.

Free Zone Company: CAn be hundred percent owned by the expet partner and doesn’t need a local body for representation.

Office Space Restrictons

Mainland Company: Business owners need to lease at least 200 square feet of space annually and submit an annual tenancy contract.

Free Zone Company: No restriction on having an office space. Businesses can be incorporated without office space and can use the communal business centres for up to five hours a week to save initial setup costs.

Visa Facility

Mainland Company: There are no restrictions on getting visas. An Electronic quota is established for the business, through which more visas can be obtained if the need for staff is more.

Free Zone Company: Upon getting the smart office package, 2 visas can be obtained. But depending on the free zone, 3-6 visas can also be obtained.

https://www.youtube.com/watch?v=dyD9QCJc1-0

Capital Requirement

Mainland Company: It varies depending on the form of the legal business entity.
Free Zone Company: It varies depending on the emirate in is located in.

Auditing

Mainland Company: All businesses in the mainland need to audit every year.

Free Zone Company: There are exceptions in the free zone. Not all have to audit except the FZ Co and FZE.

Government Approvals

Mainland Company: For every license that business in the mainland gets, an approval is needed from the respective authority - (Department of Economic Development), DM(Dubai Municipality), Ministry of Labor (MOL), Department for Naturalization and Residency affairs of Ministry of interiors or Immigration (MOI).

Free Zone Company: The do not require approvals from authorities outside of the free zone, there is an internal governing body.

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dvantages-of-setting-up-a-company-in-Dubai-Free-Zone
Categories Business, dubai, Free Zone, FREE ZONE COMPANY

Advantages of Setting up a Company in Dubai Free Zone

An analysis of economic zone & free trade zone is the first instance to be considered while establishing a business venture. Various impetus of normal advantages of free zones over non free zones in Dubai are as follows

Upsides:

  • 100% ownership in his/her venture , no native benefactor required
  • Venture premises are easier since 38plus FTZ are accessible
  • Duty is imperceptible as to non-free zones
  • Zero corporate tax
  • International currency can be contused
  • Privilege in personal income tax
  • Venture licensing pace is less in free zone area
  • Establishment disbursement is profound
  • Entrenched root
  • Entrenched IT & Security
  • Amicable environment
  • Malleable visa policy
  • Easy &flexible labor laws
  • Easy freightage
  • Ready warehouse access
  • Zero stipulation 24*7

Mandatory Procedures to Be Followed For Venture Startup

Certain pre-requisitions are to be mandatorily followed which should be in accordance with the legal bindings of Dubai business incorporation system and also certain pre startup to-do list have to be undertaken for incorporation of the venture in Dubai

Pre Start-Up:

  • Discussion with a business guru
  • Selecting the right venture market
  • Name of the venture
  • Licensing of the venture
  • MOA for the venture
  • License and approval certificates
  • Prior reservations of corporate premises

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