FUJAIRAH FREE ZONE ONSHORE COMPANY

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A HIGHLIGHT OF FUJAIRAH FREE ZONE (ONSHORE) COMPANY

Fujairah Free Zone Authority UAEA free zone is simply an area that is designated within the United Arab Emirates where different entities are incorporated and are all under specific rules.

Fujairah Free Zone’s history dates back to 28th November 1987 when the free zone was established. The main objectives behind the establishment of this free zone were so as to offer the most liberal terms, world class facilities & infrastructure and minimum regulations so that businesses can be able to operate smoothly. The main mission behind the establishment of this free zone was so as to attract global investors in fields such as trading, service provision, manufacturing processes and logistics among other fields. All these investments are achieved through the offering of liberal commercial policies that ease the establishment of businesses.

The Fujairah Free Zone is quite convenient to access as it is connected to the world through different means. These means are such as air through Fujairah International Airport, by road through highways that interconnect cities and by sea through the unique Port of Fujairah. The rapid development of Fujairah is accounted for by the fact that it is the only Emirate in UAE’s East Coast.

LICENSE TYPES

Trading: holders are authorized to deal in imports, exports and re-exports of specified commodities. License holders are allowed to operate in the free zone and outside the boundaries of UAE. For local distribution, the authority arranges for special licenses from the relevant government institutions for smooth operations.

Warehousing: Permits obtained for warehouses that offer leasing facilities and services. These facilities are used to ease storage and packing of goods.

Manufacturing: licenses obtained upon the approval and implementation of a project. It is important to note that for the issuance of these licenses, the project at hand needs to be insured.

Services: Consultancy.

REGISTRATION FORMS

Free zone establishment (FZE): Only one shareholder and a minimum capital requirement of AED 150,000.

Free Zone Company (FZCO): Has 2 to 5 shareholders and a minimum capital requirement of AED 150,000.

Local / Foreign Branch: No capital requirement for the establishment of this entity.

KEY BENEFITS

  • No foreign ownership restrictions;
  • No custom duty;
  • Ease of movements due to the readily available ports and road connections;
  • Exemption from tax (personal and corporate taxes);
  • Full capital and profits repatriation;
  • A wide range of investment fields;
  • A 3 years minimum steady tariff assurance;
  • State of the art Port of Fujairah;
  • Common custom facilities (with sea port and airport);
  • Low operation costs;
  • Close proximity with the city at a radius of 10 kilometers;
  • Cosmopolitan residential atmosphere coupled with modern facilities;
  • Confidentiality as company records need not be disclosed.

FUJAIRAH TAXES

Incorporating a free zone company is quite beneficial in that companies in these free zones enjoy full exemption from tax. Just like in other free zones, in Fujairah free zone there is no corporate or income tax on individuals and companies respectively.

FUJAIRAH FREE ZONE COMPANY CORPORATE AND LEGAL FEATURES

COMPANY NAME

Three preferred company names need to be provided for approval purposes. Usually, the authority strives to ensure that it reserves the first choice.

DIRECTOR

At least one director / manager (individual only).

SHAREHOLDER

At least one shareholder and a maximum of five (individual or corporate).

SHARE CAPITAL

A minimum share capital of AED 150,000. The share capital should be deposited in the bank account of the company before the license is issued.

OFFICES

It is required that the entity should rent a facility and provide proof of this rental to the authority before obtaining the license.

TRADE LICENSE

The license issued is only valid for duration of one year after the day it is issued. Renewal of the license should be done before the expiry of the current license or within 30 days after it expires.

AUDIT

Companies are required to undertake an Annual financial audit that should be submitted to the authority. The reporting period for these audits is one year but entities are free to choose their own reporting periods as long as they lie between 6 months and 18 months.

VISA APPLICATIONS

The number of visas a company is to get is mainly dependent on office size that the company takes. In most occasions, a 10 square meter office space translates to about one visa. Visa issuance processes are treated separately by the authority and is majorly dependent on the business activities of the applicants. Visas are processed within 4-7 working days but this duration may increase due to immigration department’s approvals.

IMPORTANT INFORMATION

  • If you wish to engage in direct trade within the United Arab Emirates (through a free zone company) there are two options that you can use. One, you can either trade directly with an LLC company that has been issued with an import / export license. Two, you can liaise with a logistics company that will clear your goods and have them delivered to the mainland. It is advantageous to identify that a free zone company may not directly sell its goods (retail) to the local market.;/li>
  • For service provision companies that wish to provide services to a company that is not within the free zone, the general rule provides that all services are to be provided within the free zone;
  • Holders of Free Zone licenses are permitted to import goods and equipments into the free zone without having to pay custom duties. Custom duty only applies when the goods are moved out of the free zone. There are convenient warehousing facilities that are at the companies’ disposal that intend to re-export goods imported. In such a situation, a refundable fee deposit that is equal to the custom duty of the goods. Once the goods are re-exported, the deposit is refunded;
  • Calculations on the custom duty are based on the CIF value of the goods at a 5% rate. However, alcohol/liquor has its custom duty calculated at a 50% of its CIF value while that of tobacco products stands at 100%.Essential products like pharmaceuticals and foodstuffs are duty free and hence no custom duty levied on them;
  • Documents required by customs are goods declaration, certificate of origin, bill of lading and invoice copies. It is however important to note that there are other documents that may be required and as such it is important to visit www.dubaicustoms.gov.ae for updates.