If you are an investor and if you are looking to invest in UAE, you might get confused at the time of selecting the free zone.

This article is based on providing a clarification and advise on the right selection.

Which free zone to select?

Mostly all free zones have the same advantages, such as 100% foreign ownership, repatriation of capital and profits and many more, besides import and export due to the implication of indirect tax from January 2018.

In order to select the best free zone, we ask our clients a few questions:

1. Will the business be conducted inside UAE or outside?
2. What will be the business activity?
3. What kind of presence do you need for your business?
4. Will you be able to fulfill the requirement of a manager having the local visa?
5. What is your office requirement?
6. Does the office/warehouse need to be near port?
7. How many visas will you be requiring in an initial 1-year duration?

You must be wondering, “Why are these questions important?”

Question 1: Will the business be conducted inside UAE or outside?

This is asked for the following reasons:

• If the proposed business is going to trade totally outside UAE and will not require a local office, it is better to suggest an offshore company like RAK – ICC instead of the free zone.
• In case of having the business totally in UAE, and local dealing is of a certain quantity, then we suggest mainland or free zone company.
• If you require to save indirect tax while you are conducting an activity of trading in free zone, we suggest the designated free zone.

Question 2: What will be the business activity?

It is important for you to decide the exact activity as there are free zones designed for particular segments.

• Dubai Media City, Dubai Silicon Oasis, Creative city, TwoFour54 and many more are specifically designed for Media Industry.
• Likewise, for Health Care, free zones like Dubai Healthcare City and Dubai Science Park is selected.
• In the same way for Finance, Dubai International Finance Center and Abu Dhabi Global Market type of free zone is selected.

Question 3: What kind of presence do you need for your business?

This question is asked to know the legal structure if you want to incorporate a sole ownership company, subsidiary, branch company or representative office because there are a couple of free zones which restricts certain type of legal structures.

Question 4: Will you be able to fulfill the requirement of a manager having the local visa?

There are many free zones which require manager visa issued within 6 months of incorporation. So, it needs to be decided if the proposed company can fulfill this requirement.

Question 5: What is your office requirement?

If the proposed company require a specific square meter office, warehouse, lab, factory area or any other requirement, then a specific free zone providing such facilities needs to be selected.

Question 6: Does the office/warehouse need to be near the port?

If your company is going to require the office/warehouse near the port, you need to select free zone like JAFZA which is located near the port.

Question 7:  How many visas will you be requiring in an initial 1 year?

The number of visas required is directly proportionate to leased work space. In case that more number of visas are required, emirates like Sharjah, Hamriyah or Ajman can be selected in order to get a cheaper work space.

Conclusion

There are more than 40 free zones in UAE and identify the best one for your business may become easy if you go through the above questions.

Contact us on incorporate@nrdoshi.ae if you are looking for an expert advice on your company set up. We can provide you free counseling and identify the free zone most suitable for your business.