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Basically, 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.
A free zone is basically a zone in the UAE that is designated for the incorporation different types of business entities. The businesses incorporated in these zones are required to follow specific rules.
Ajman Free Zone constitutes part of the seven emirates in UAE. The free zone’s history dates back to 1988 when it was established. The location of this free zone is quite strategic such that it is found in close proximity to the major commercial cities in the UAE thereby enhancing easy accessibility to other Emirates.
Dubai is only 12 km from Ajman and the distance between Ajman and Sharjah is only 2 main respects to transport, Dubai and Sarah international airports are only 25 minutes drive from Ajman free zone. Further, Ajman is adjacent to the outstanding Ajman Port, Sharjah’s Khorfakkan Port, Dubai’s Port Rashid and Port Rashid. The best thing about these ports is that it takes you less than 35 minutes to drive to the ports from the free zones.
Additionally, it is important to note that Ajman free zone enjoys an extensive exterior connection from international road networks that connect the free zone to Oman, Bahrain, Qatar, Iran, Kuwait, Saudi Arabia Kuwait, and Europe and beyond.
Trading / general trading: A trading license permits its holder to trade in a maximum of 3 products while a general trading license has no limit to the number of products. However the former is restricted to products like pharmaceutical products that require the issuance of a special license.
E-Commerce: Used to license companies that intend to deal in e-commerce business.
Professional Services: This is used for licensing companies that aim to offer professional services within the free zone.
Industrial: Issued to companies that wish to undertake manufacturing activities/ procedures in the Free Zone.
National Industrial: This license is only issued with GCC and the company is to operate in the free zone. In addition to this, a GCC national should have a majority shareholding of more than 51%. What’s more important about these companies is that more than 40% of all the manufacturing should be done in the free zone. Companies with these licenses are eligible to benefit from duty free exports to Arab Gulf Cooperation Council’s member states.
Free Zone Establishment (FZE): This business entity has one shareholder and the minimum capital requirement is AED 200,000.
Free Zone Company (FZCO): Should have a minimum of 2 shareholders and a maximum of 5 shareholders. The minimum capital requirement per shareholder is AED200,000.
Foreign Company Branch: Licenses issued to foreign based companies that intend to establish a branch/ subsidiary company in the free zone. The branch company can be set for purposes such as commercial, industrial or professional services. Usually, there is no capital requirement in establishment of branch companies.
Local Company Branch: Licenses issued to companies that have a valid license issued by any of the UAE licensing authorities with the exception of other free zone authorities.
One of the most lucrative advantages of company incorporation in Ajman free zone is that there is no tax. This is because of the fact that the free zone has no personal and corporate tax. Basically, individuals and corporate are exempted from paying personal & corporate taxes respectively. This makes the free zone to be economically attractive to potential investors.
Three preferred company names need to be forwarded to the authority for approval.
At least one shareholder can either be individual or corporate.
At least one director / manager (only individuals allowed to act as directors).
A minimum share capital of AED 200,000. The share capital should be deposited in the bank account of the company. Proof of the deposit needs to be forwarded to the authority before receiving the license.
The company should rent a facility and provide proof of the same to the authority so as to be issued with the trading license.
An annual financial audit needs to be conducted and then be forwarded to the authority. Usually, the reporting date is set as one calendar year but companies are free to set their own reporting dates. It is however important to note that these dates should not be less than 6 months or more than 18 months.
The number of visas that a company is to get is determined by the office space taken by the company. By approximation, one visa goes for an office space of 10 square meters and the issuance of the visa is assessed separately on a case by case basis. Normally, the processing of visas takes about 4-7 days but this time may be longer due to factors such as immigration department’s approval.