JLT / DMCC FREE ZONE COMPANY

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A HIGHLIGHT OF JLT FREE ZONE (ONSHORE) COMPANY

dmcc dubaiBasically, a free zone is an area within UAE that is designated for the incorporation of different entities and is under specific rules and regulations, whereas a tax free environment exists.

Dubai Multi Commodities Center Authority’s (DMCC’s) establishment dates back to 2002. DMCC and Jumeirah Lakes Towers (JLT) are regulated by the same regulatory authority as they are similar free zones. However, despite this similarity, there are 2 licenses with the DMCC free zone companies operating in the commodities and allied sectors while the JLT free zones operate in the non-commodities related sectors.

Companies that operate in DMCC/JLT Free Zones enjoy very strategic location on the Sheikh Bayed Road, reliable customer support, industry clustering, streamlined processes, freehold commercial and residential property and modern infrastructure.

LICENSE TYPES

  • Trading;
  • Services;
  • Manufacturing.

REGISTRATION FORMS

  • Free Zone Establishment (FZE): One share holder and a minimum capital requirement of AED 50,000;
  • Free Zone Company (FZCO): Two to five shareholders and a minimum capital requirement of AED 50,000 per shareholder;
  • Local or Foreign Branch/Subsidiary: No capital requirement.
 

KEY BENEFITS

  • Full foreign ownership. There is no need of having a UAE partner when forming a company in DMCC unless it’s a pharmaceutical business. In this case, the Ministry of Health requires the business to have a UAE National Shareholder so as to issue the required NOC;
  • No personal or corporate tax;
  • Full capital repatriation and elimination of currency restrictions;
  • Purpose built infrastructure and outstanding industry cluttering;
  • The strategic location of the free zone on the Sheikh Bayed Road that connects Abu Dhabi and Dubai. The free zones are also in close proximity with the Dubai Logistics Corridor;
  • Quality freehold, affordable commercial and residential properties for sale or lease;
  • Space availability (commercial, retail, residential and industrial space);
  • Ease in documentation processing and license issuance;
  • Confidentiality of company records.
 

DMCC / JLT TAXES

One of the best and most advantageous things about DMCC/JLT free zone company incorporation is that there is no personal and corporate tax. This makes the free zones to be quite attractive to potential investors as their economic viability is very high.

 

DMCC / JLT FREE ZONE COMPANY CORPORATE AND LEGAL FEATURES

COMPANY NAME

Four preferred company names to be forwarded to the authority. Commonly, DMCC strives to reserve the first choice but specific words like Company, Dubai, Emirates, etc may not be used.

SHAREHOLDER

At least one shareholder and not more than five shareholders (corporate and individuals accepted).

DIRECTOR

At least one manager/director (only individuals accepted).

SHARE CAPITAL

A minimum share capital of AED 50,000/shareholder.Share capital to be deposited in the bank account of the company within 6 weeks after the license has been issued .Proof of the deposit should be forwarded to the DMCC. The deposit may be withdrawn immediately after submitting the proof.

OFFICES

Office requirements for any company are mainly dependent on the number of employees the company has and the type of business that the company conducts. Available options are such as a Flexi desk (20-30 sq/m), a flex office (200-265 sq/m) and multiple floors of an office of up to 2,000 sq/m each. It is essential for a Free Zone entity to rent a facility and submit proof of the same to the DMCC so as to receive the trade license. The minimum rental space is a Flexi desk offered by the authority (DMCC).

TRADE LICENSE

The validity of the trade license stands at 1 year and renewal should be made before the expiry date or within a time frame of 30 days after the expiry of the current license.

AUDIT

It is required that businesses should conduct an annual financial audit and submit the audit to the DMCC. Generally, the reporting period is one year but companies are free to choose their own reporting date as long as it is more than 6 months and less than 18 months.

 

VISA APPLICATIONS

The total number of licenses that a company is eligible to apply for is dependent on the office size taken by the company. On average, one visa per 10 square meters is the criterion used and this is assessed on a case by case basis by the authority. Criteria for the issuance of the visas are dependent on the business activities being carried out by the business. Visa issuance takes about 4-7 working days and is subject to the immigration department’s approval.

 

IMPORTANT INFORMATION

  • If you trade in UAE through a free zone company, there are two options available. First, you can directly trade with an LLC company that holds an import/exports license. Second, you can enter into an agreement with a logistics company that will in turn clear the goods and deliver them up to the mainland;
  • For service companies that wish to provide their services to companies not within the free zone, the basic rule provides that services must be provided within the Free Zone. There are a few exceptions that apply as far services such as recruitments are concerned as there are firmer rules that apply;
  • Free zone license holders are permitted to import goods into the free zone from any foreign country without having to pay custom duty. This duty is only payable when goods are moved out of the free zone. Further, there are numerous warehouse facilities that provide storage for goods that are to be re-exported. However, in this case companies are required to pay a deposit that is equal to the custom duty of the goods. Upon the re-export of the goods, 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 the custom are such as goods declaration, certificate of origin, invoice copies and bill of lading. As custom requirements are very dynamic, refer to www.dubaicustoms.gov.ae for the latest information on customs;
  • DMCC has no port of its own but JLT is located at a distance of 10 km along the Jebel Ali Port, one of the largest ports allover the world;
  • You are free to sell goods in the local market but only through a distributor but a free zone company may not retail its goods to the local market directly.