29 Jan Investing in the free zone
In our article, we will explore the issue of investing in free zones , which are areas that provide a distinctive investment environment with facilities and advantages that make them attractive to investors. We will highlight the importance of investing in free zones, the opportunities available in these areas, in addition to the benefits of investing in them.
Free zones are considered distinct economic zones in which an encouraging investment environment is created, providing facilities and incentives to investors such as tax exemptions, fast permits, and advanced infrastructure. These areas are characterized by commercial freedom and flexibility in managing companies, making them an ideal place to start and expand a business.
The free zone is one of the common types of investment in many countries around the world. Free zones are a distinctive and attractive environment for companies and investors, as they provide exceptional opportunities and privileges for business.
Free zones are considered special economic zones subject to local and international laws and regulations, independent of the general economic system in the country in which they are located. These zones aim to promote economic growth, attract foreign investment, and enhance foreign trade.
In this article, we will discuss the advantages of investing in free zones, in addition to the economic sectors available to invest in. We will provide advice and guidance to investors on how to choose the appropriate free zone and the basic steps to start investing in it.
Investing in the free zone
An overview of the free zones in the UAE
The United Arab Emirates is distinguished by the presence of a large number of free zones that provide a distinctive investment environment and multiple facilities for companies and investors. These free zones are considered major economic hubs in the country, and play a vital role in promoting trade and stimulating economic growth. Here is an overview of some of the main free zones in the UAE:
- Jebel Ali Free Zone (Jebel Ali Industrial): It is considered one of the largest industrial zones in the world, providing advanced infrastructure and excellent logistical services.
- Jebel Ali South Free Zone: It is located south of Jebel Ali Industrial Zone, and is distinguished by providing facilities for companies in various sectors, such as logistics and manufacturing.
- Dubai Free Zone: It includes free zones such as Dubai World Trade, Dubai Logistics, and Dubai Business, and provides a distinguished investment environment for national and international companies.
- Sharjah Free Zone: It includes several free zones that include Khalid Port, Sharjah Industrial Investment, and Sharjah Media Technology, and provides investment opportunities in various sectors.
Investing in the free zone
A free zone is an area where goods can be downloaded, stored, traded… or – even – manufactured… or remanufactured, and then re-exported under a specific customs law, and in general it is not subject to customs duties.
Free zones are considered separate entities. They are not governed by UAE labor law. Companies located in the free zone have a set of rules and regulations that govern them and are specific to them. Also, a local sponsor is not needed to open a company in the free zone. The open company can also be owned by a percentage 100% by completely other nationalities other than the United Arab Emirates… or the Gulf Cooperation Council countries.
Steps to establish companies in free zones
Establishing companies in free zones requires following certain steps and adhering to the required legal and administrative procedures. Here are general steps for establishing companies in free zones:
- Choosing a free zone: Study the free zones available in the country and choose the most appropriate for the business activity you wish to carry out.
- Select company type: Choose between available company types, such as LLC, partnership, or sole proprietorship, based on your business needs.
- Determine the business activity: Determine the main business activity that the company will undertake in the free zone.
- Submitting the application: Submit an application to establish the company to the responsible authority in the selected free zone. The application may include details about the company, shareholders, and business activity.
- Obtaining the necessary licenses: Wait for the application to be approved and for you to obtain the necessary licenses from the relevant authority in the free zone, such as the Department of Commerce and Industry.
- Signing contracts and agreements: Sign the necessary contracts and agreements with the relevant authorities, such as rent, services, and employment.
Tax registration and social insurance: Register for tax and social insurance according to local controls and regulations. - Opening a bank account: Open a bank account for the company in one of the approved banks in the free zone.
- Starting to work: After completing all procedures, you can start doing business in the free zone.
Remember that these steps may differ slightly depending on the local laws and regulations in each free zone, so it is always recommended to check the exact procedures for incorporation in the chosen free zone and the experts of Itqan Company can help you with this.
Free zones in the United Arab Emirates
Not only that, the United Arab Emirates has more than 40 free zones, but more of these zones are under construction.
Establishing a company in the free zones of the UAE can be difficult; Due to the presence of many free zones and the difficulty of choosing between them, but we at “Itqan” Business Services Corporation will help you determine which free zone is suitable for your business activity. We will also help you establish your company in the agreed-upon free zone in the shortest possible time.
Steps to establish companies in free zones
Advantages of establishing a company in the free zone
Establishing a company in the free zone comes with many features and benefits that make it an attractive option for investors, including:
- Tax exemptions: Companies in free zones enjoy certain tax exemptions, such as exemption from income tax and value-added tax, which helps reduce costs and increase profits.
- Administrative facilities: Free zones provide an easy administrative environment and flexibility in administrative procedures, which facilitates the process of establishing and managing companies.
- Customs facilities: Companies in free zones enjoy customs facilities, such as not imposing customs duties on import and export, which facilitates the international trade process.
- Advanced infrastructure: Free zones provide advanced infrastructure that includes logistical, communications and transportation facilities, which helps speed up production and distribution processes.
- Access to regional and global markets: Free zones represent an ideal starting point for companies seeking to access regional and global markets, as they provide strategic directions and diverse business opportunities.
- High competitiveness: Free zones encourage competitiveness and innovation, which helps companies develop their products and services and increase their competitiveness in the market.
- Government support: The government provides support and encouragement to companies established in free zones by providing financial, technical and training support.
In short, establishing a company in the free zone provides a set of advantages that contribute to business success and enhance opportunities for growth and expansion.
In conclusion, investing in free zones represents an attractive option for investors who seek to benefit from a distinctive investment environment that provides them with multiple opportunities and different facilities. Free zones are a major economic hub in many countries, contributing to enhancing trade, stimulating economic growth and creating job opportunities.
Thanks to tax facilities, advanced infrastructure, and customs liberalization, free zones provide an ideal environment for companies to grow and expand their businesses. Investment opportunities in free zones also represent an opportunity for companies to achieve innovation and competitiveness, and achieve success in the local and global market.
The most important frequently asked questions about investing in the free zone
What are free zones and what is their role in the economy?
Free zones are special economic zones within the country characterized by facilitating economic policies and providing facilities for companies and investors to increase economic activity and stimulate investment.
What tax facilities are available in free zones?
Companies in free zones enjoy tax exemptions such as exemption from income tax and value-added tax.
What are the main economic sectors that can be invested in in free zones?
Investments can be made in a variety of sectors such as industry, logistics, technology, financial services, tourism and hospitality.
What are the basic steps to start investing in the free zone?
The basic steps include choosing the appropriate free zone, submitting the application, obtaining the necessary licenses, and establishing the company.