The United Arab Emirates is known for its free economic zones. FEZs are strategic economic territories that offer entrepreneurs favorable advantages and simplified business rules. For example, a company setup in Dubai South is exempt from customs duties and tax benefits.

Foreign investors choose free zones to open a company in the UAE due to the country's stable political course, high standard of living, transparent and effective legislation, tax incentives, ease of obtaining residency there, and many other advantages for business.

Advantages of registering companies in the UAE free zone

There are more than 40 free economic zones in various Emirates, which compete with each other to attract new resident companies, which helps improve the quality of services provided.

• Companies registered in UAE free zones are not offshore and represent a prestigious corporate vehicle with a good reputation in the international sphere.
• A company in a free zone can be 100% foreign-owned, and shareholders and directors do not need citizenship or residency to work there.
• Companies in the FEZ can open corporate bank accounts in the UAE. Foreign investors can also repatriate profits without restrictions.
• Free zone companies can conduct business within their FEZ and outside the UAE. However, they can also operate in the UAE's main territory through a local agent or with a “dual” license from the FEZ and the authorities of the relevant emirate.
• FEZ companies must have a physical office in the free zone. In some cases, a dedicated workplace is sufficient; in others, a full-fledged office space is required. Even if individual FEZs do not have such a requirement at the registration stage, a physical office will still be required subsequently, including for opening a local bank account.
• Following the introduction of corporate tax in the UAE in 2023, free zone companies continue to enjoy a zero tax rate, provided that they are “qualified” residents of free zones and receive “qualified” income. Otherwise, the profits of FEZ companies will be taxed according to the general rules, which also provide for low rates.

How to choose a free economic zone in the UAE?

The optimal choice of a free zone in the UAE depends on the purpose of creating a company, the types of its activities, the cost of registration and administration, and the need for certain infrastructure. The most reliable are the leading free zones in Dubai and Abu Dhabi.

It is quite difficult to accurately estimate all the costs of creating a company in a free zone. The cost of registering a FEZ company in the UAE usually consists of:

• registration fees (for consideration of the application, registration, issuance of the charter);
• license fee (its amount depends on the type of license and the declared types of activities; subsequently payable annually);
• administrative fees;
• contribution of share capital (where necessary);
• other components (office rent, visa processing), taking into account the needs of the client and the tariffs of a specific FEZ;
• the cost of services of a corporate service provider, including preparation and submission of an application for registration, preparation of documents, interaction with government authorities, and client support.

The period for registering a FEZ company in the Emirates, from submission of an application to full readiness (including registration and visa procedures) ranges from 1 month.