If you want to start a company in Dubai, you have to distinguish whether it should be in the core area of the United Arab Emirates (UAE), or in a Dubai Free Zone. Because apart from tax and other special features, the establishment of a company in a Dubai Free Zone deviates from the rest of the core area of the UAE. Although the foundation in both cases is very similar in many aspects. Among other things, the requirement of a safety certificate (initial approval) is important here. It is the forerunner on the way to the founding of the company. Nevertheless, the procedure for setting up companies in a Dubai Free Zone is relatively quick. In part, this is also due to the fact that the establishment of a Dubai Free Zone can do without some of the intermediate steps to establishing a regular company in the UAE. One major difference, however, is that only three legal forms are foreseen to set up a Dubai Free Zone company.

1. Creating Dubai Free Zone Company – Introduction

The UAE has attracted more and more foreign entrepreneurs to the country in recent years. The pioneer here is undoubtedly the in many ways futuristic metropolis Dubai. In fact, Dubai is rapidly evolving into a city that resembles a modern version of the fairy tales from 1,001 nights. But in addition to the prestigious lifestyle of the wealthy population, another factor is responsible for this meteoric development. Of course, the petrodollars from the export of fossil fuels have also made a significant contribution to the success of the emirate. But as the importance of these exports to the UAE budget has declined significantly in recent years, there must be a very different factor in the continued progress.

And in fact this factor can be clearly localized, namely in the many special economic zones in Dubai. They are also called Dubai Free Zones. A free zone in Dubai is an ideal place to do business, especially with foreign countries. For the Dubai Free Zones there are exceptions to the general regulations in the UAE, for example with regard to the newly introduced corporate tax. Therefore, the Free Zones in Dubai have become a hotspot for entrepreneurs and companies from all over the world who want to start a company or branch here. But also here there are differences to the establishment of a company in Mainland Dubai. What you should pay attention to if you also want to start a company in a Dubai Free Zone is the subject of the following lines.

In which Dubai Free Zone would you like to start your company?

Let’s start with one of the most important questions in the whole process. And this is basically one of the main differences to starting a company in Mainland Dubai. Because who wants to start a company in a Dubai Free Zone, should know in advance which ones are suitable for this. This is because Dubai Free Zones are broadly defined by business and activity. For example, there is a fee zone for IT companies, one that specializes in medical care and many others that specialize in the production and marketing of certain products. In addition, there are also the many free zones dedicated to trade, logistics and transport. So you have to know at the beginning of the planning that if you want to start a company in a Dubai Free Zone, you have to choose the appropriate Free Zone.

3rd Mainland vs. Dubai Free Zone Company: Major Differences

This is an important aspect in which the establishment of a company in a Dubai Free Zone differs from the establishment of a company in Mainland Dubai. While one can in principle freely decide for a location in the UAE when starting a company in the Mainland area, one is limited to the specific Free Zone area provided for this purpose when establishing a Free Zone company when choosing a location.

In addition, it is extremely important for later business activities that you decide before founding whether you also want to interact with other business partners in the UAE, or whether the business relationships should only develop abroad or within the Free Zone. The conclusion of transactions with other business partners outside the Free Zones is in principle excluded for Free Zone companies. In some cases, however, in which transactions with foreign countries are to be involved in particular, this does not have to be a disadvantage. On the contrary. Because Dubai Free Zones also have special advantages to offer, among other things in terms of taxes.

A third difference is the designation of the legal forms that a company may adopt in the Dubai Free Zones or in the rest of the country. In the Dubai Free Zones you can start a company as Free Zone Limited Liability Company (FZ LLC), Free Zone Establishment (FZE) or Free Zone Company (FZ Co.).

Another difference concerns the minimum amount of start-up capital to set up a company in a Dubai Free Zone. Depending on the industry, and thus depending on the free zone, different amounts are prescribed.

Steps to Starting a Company in a Dubai Free Zone

Well then, we know in which industry or industry our company will be active and have found the corresponding Dubai Free Zone for its establishment. Afterwards you should look for a suitable business property. Because every company in the UAE must have its own company headquarters. In any case, no additional use for private residential purposes may take place. At the same time, you can think of a company name. This is then checked in advance for availability. However, a decision on the choice of legal form is also useful for this. Because this is with its usual abbreviation also part of the company name. Apart from this, the general regulations on the design of company names apply.

The first contact with the authorities can already take place. If you want to set up a company in the UAE, you must first apply for a safety certificate. In addition to the completed application form, you submit a business plan and a statement on the planned investments and the investment idea. In addition, copies of the identity documents of the entrepreneurs and designated managers and samples of their signatures must be added. Additional documents, such as a bank report or previous business licenses, may also be requested. For self-employed persons or individual enterprises, there are sometimes different requirements for proof.

With receipt of the Initial Approval, you can now complete the registration of the company. For this you have to submit an Arabic-language social contract including the notarized order for the intended managers and their powers of attorney. Include a passport photo of the managing directors and a sample of their signatures. However, information on share capital is also important. Then you pay the applicable fee, which depends on the type of business activity carried out.

Founding 5th Company in Dubai Free Zone – Conclusion

And with that we were able to start our company in a Dubai Free Zone within a short time. Because the process is completed relatively quickly regardless of the type of application – from Germany, on site or electronically. In the best case, this should even be possible within a quarter of an hour. But then you have to have all the documents and information ready. All application forms should also be fully answered.