UAE Onshore Free Trade Zone Companies

FREE TRADE ZONE ONSHORE COMPANY IN THE UAE

Our advisors will work with you in choosing the right form of Free Trade Zone Company in the UAE that perfectly suits your objectives and requirements; undertake the preparation and legalization of all necessary documents required for incorporation of a company.

Register your company

 

UAE FREE TRADE ZONES

There are over 40 Free Trade Zones in the UAE, where an onshore free zone company of nearly any type and one that matches any requirement can be incorporated. Each of the Free Trade Zones operates independently with its own specifics. For instance, Dubai Media City is most suitable for media companies while companies operating in cargo ships management are mostly registered in Jebel Ali Free Zone.

The Free Trade Zones (FTZ) in Dubai and the United Arab Emirates were set up for attracting foreign investors to the country and for developing business relationships between the UAE and other countries. Due to stable legislation basis, well developed infrastructure, tax exemption for most business activities and beneficial geographic location of Dubai. FTZs of Dubai as well as other Emirates have received great development and international recognition. Presently, thousands of companies of all business activity types that are represented by investors from all over the world run businesses successfully in the UAE.

Dubai became fully independent from its oil industry thanks to progressive business development in Free Trade Zones due to advanced infrastructure, absence of taxes and cheaper workforce. Other emirates have also followed with the inclusion of oil rich Abu Dhabi.

 

FREE TRADE ONSHORE COMPANIES

Onshore companies registered in FTZ of Dubai and UAE are exempted from taxation, no VAT is applicant, almost zero deductions or taxes on wage payments. The only exceptions are seen in companies operating in the oil and tourism industries.

Key advantages of UAE FTZ Company include:

  • Full foreign ownership by shareholders / investors;
  • No tax on imports and exports;
  • No VAT;
  • No restrictions  on capital and profits repatriation;
  • No income tax;
  • Cheap energy resources;
  • Stable legislation;
  • Stable political & economic environment.

There is no limitation on citizenship or residency of company directors and shareholders/ investors of a Free Zone Company. Shareholders can either be physical or legal entity.

A Free Trade Zone registered company provides shareholders, managers and personnel with an opportunity to receive Residence Visas and Emirates ID.

The UAE as a free tax jurisdiction has signed many Double Tax Treaties with over 50 countries. This gives companies that are registered in the Free Trade Zones clear advantages.

The unique features of onshore companies registered in the Free Trade Zones are that there are zero taxes on the companies, companies can have real office and be managed from the country of its incorporation.

In UAE’s if a company is in a position of structuring its business processes and flows properly, it stands a chance of proving its tax residency in the UAE with no risks of taxation in the country.

The issue of company tax residency has lately become increasingly vital. Business relationships with offshore companies have become very complex with the Free Trade Zone companies of Dubai as well as other Emirates offering the most viable solution.

Companies registered in Dubai’s Free Trade Zones as well as of other UAE emirates are more expensive in respect to incorporation and administration in comparison to classic offshore companies. However, the non-existence of tax, stability and jurisdiction’s acceptance, reliable banking services and increased availability of a large variety of Double Tax Treaties surpass the cost difference factor.

In real essence, an onshore company  registered  in Dubai’s Free trade Zones and  the UAE  is taken to be a full residential company, but not subject to taxation (with the exception of taxes in industries such as oil and tourism industries).  In addition to this, onshore companies do not attract the attention of different authorities like classic companies do.

Additionally:

  • Presence in the UAE can open new business avenues while operating in markets of this region;
  • Possibility of transferring part of the production cycle in Free Trade zones with tax exemption and a cheaper workforce;
  • Well-developed logistics infrastructure that can be utilized effectively when working with international markets.

Companies in UAE’s Free Trade Zones can be registered either as independent companies or as branch establishments /representative offices of local and international companies.

The share capital requirement of onshore companies is dependent on the Free Trade Zone of choice, type of company’s activity and the number of partners in the company. The minimum share capital is USD 14,000 with the share capital for trading / consulting companies going up to USD 300,000 and more for large production companies and universities. There are no share capital reservation requirements upon the incorporation of the company and as such can be used freely for business operations. There are also some FTZ companies have no share capital requirement at the time of incorporation.

Companies registered in UAE’s Free Trade Zones as onshore companies are treated as resident companies and thus should be licensed for the activity of choice. The requirements for receiving a license can be simple like when registering a trading or a holding company or quite complex when opening a fully functional commercial university or hospital.

 

FREE TRADE ZONES LICENSES

Main types of licenses in Free Trade Zones include:

  • Commercial Trade License (for trading companies);
  • Service license (for provision of different  services like consulting);
  • Manufacturing / industrial license (for production facilities).

Shareholders (physical persons) should submit the following documents for the incorporation of a Free Trade Zone company of this type:

  • Copies of passports of shareholders and directors;
  • Bank recommendation letter;
  • A document (bank statement, utility bill) confirming the residential residence of the company investor / shareholder;
  • Information on the manager’s education and experience.  The number of required documents is dependent on the company’s intended business activity.

The following documents are required in case the shareholder is a legal entity:

  • Company incorporation  documents;
  •  The resolution of the director of the founding company to establish a daughter company.

The holding company’s documents need to be legalized in the UAE embassy in the country of the company’s incorporation and in UAE’s Ministry of Foreign Affairs.

Companies registered in FTZ as branches have no rights to full scale business operation on UAE’s territory. There is no share capital requirement for such companies.

To register a foreign company’s branch in Dubai and the UAE Free Trade Zone, the incorporation documents of the parent company are required.  These documents are to be legalized in the UAE embassy in the country of incorporation and then in the UAE’s Foreign Affairs ministry.

For purposes of getting initial advice on the incorporation of companies, feel free to send us your request at [email protected].