Opening up the Market in the United Arab Emirates – Free Zone Companies
27th September, 2018
This is the second in a series of 6 articles with regards to establishing a business in the United Arab Emirates.
Free Zone Companies
The establishment of a business in one of the Free Zones in the United Arab Emirates can be an attractive proposition to companies because:-
- Exemption from corporation tax for a number of years
- 100% foreign ownership
- No personal income tax attaching to distributed profits
- 100% repatriation of capital and profits
- 100% import and export tax exemption
A free zone is established in an individual Emirate (of which there are seven), and has its own authority which is responsible for issuing operating licences within that free zone. Only businesses set up in a specific free zone will be governed by that free zone’s rules.
The corporate entity which can be set up is a free zone establishment commonly known as an FZE.
A foreign company can either register a new company or set up a representative office as a small branch of their existing company.
There are specific restrictions on companies registered within free zones in relation to undertaking business in other free zones and other areas not covered by free zones within the UAE.
The nature of restrictions varies but generally speaking a company registered in the free zone cannot, of its own volition, trade into the UAE being used as a base for doing business outside UAE
Trade into the UAE normally has to be undertaken by an entity incorporated within the UAE through a joint venture with a UAE established business or individual.
As members of IAG Global, Aarons International is able to provide assistance and advice on legal matters across numerous jurisdictions.
Corporate & Commercial Partner
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