What are the 5 Key Steps to Start a UAE Free Zone company?

Business setup in UAE Free Zone is fast and easy with minimal paperwork. In this article, we will share the full journey of an investor looking to invest in UAE, particularly in a free zone. Though the process of company formation in UAE free zone is relatively straightforward, there are a few things to note and consider. Whether you decide to do the process on your own or hire a business setup consultant in UAE to speed up the process, it can be tedious and time consuming. Thus, you need to ensure to get the right advice that is suited to your business needs and sternly follow the requirements of the respective free zone. Here are the key steps to accurately setup a business in a free zone in UAE.

1. Determine the type of legal entity

What is the type of legal entity that your business requires? Before anything else, you should decide on this to ensure a smooth journey.  There are two types of companies in a free zone:

• Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.)
• Free Zone Establishment (FZE)

You can differentiate the two options on the number of shareholders and if they are natural or legal persons. Note that not all free zones register both types of businesses, and so, you need to check with the specific free zone authority for the types of companies that can be registered in which you may refer to the list of free zones and their authorities.

Instead, you may refer on Skwer Group’s detailed list of business activities, business license types and other important information for the company formation in UAE free zone, if you are looking to setup in a specific free zone such as Jebel Ali Free Zone, RAK Free Zone or Ajman Free Zone.

2. Select the Trade Name

Check whether your chosen trade name has already been registered in your respective free zone or the Department of Economic Development and ensure to follow their guidelines accordingly. According to DED’s trade name guidelines, it is not allowed to reserve a name starting with words like “Universal”, “Middle East”, “International” and/or translate them into Arabic. This is just one example of the guidelines, but we will share some of the other free zone’s trade name rules and regulations below.

• Company name rules – Abu Dhabi Global Market
• Company name reservation rules – DMCC
• Naming policy – DIFC
• Trade name registration guidelines – RAKEZ

3. Business License Application

The business license will correspond to the main activity of your company. A free zone company formation in UAE has a wide range of business activities to offer. We have listed some of the free zone business activities here to be your guide in choosing the appropriate activity for your business.

• Jebel Ali Free Zone – Business Activities 
• DMCC – Business Activities
• RAK Free Zone – Business Activities
• Sharjah Media City – Business Activities
• IFZA Free Zone – Business Activities
• Meydan Free Zone – Business Activities https://www.meydanfz.ae/business-activities/

4. Choose an Office Space

Now you have your business license application sorted out, you may proceed with checking out the right office space that will fit your business activity. Choosing the right location and type of space is vital. Thus, free zones in UAE allows you to buy or rent an office space. While office requirements depend on the number of employees and the business activity. To give you an idea, here are some of the office space options that a free zone offers:

DMCC free zone company has 4 options of the facilities to rent when you do company formation in DMCC:

• flexi-desk facility as the minimum required office space
• serviced desk or office
• executive office in any of the business towers located in JLT
• Warehouse in JAFZA free zone

Dubai South or Dubai World Central offers full range of facilities:

• flexi desks
• flexi offices
• permanent desks
• smart fully furnished offices
• executive offices
• warehouses
• lots of land

IFZA free zone offers a different office space solutions which is located in Dubai Silicon Oasis.

• Flexi-desks
• Offices

DWTC free zone offers executives facilities in Sheikh Rashid Tower, which hosts Dubai Financial Market. Another option is in its business center located in One Central Development.

• Flexi-desks
• Offices

SAIF free zone is one of very few zones that offers ready-to-move facilities. Warehouse sizes starts with 125 sq meters, out of which 22 sq meters are occupied by the office space.

2 types of offices in SAIF zone authority:

• Fitted out, air conditioned and furnished
• Unfurnished offices with included utility costs

Additional available facilities:

• Labour accommodation
• Temporary warehouses

5. Secure pre-approvals, business license and business registration

After doing steps 1 to 4, it’s time to submit the specified document requirements of a free zone in order to obtain the necessary approvals.  These documents will vary depending on the type of your business activity. We have listed below the general steps and documents required for approval.

Preliminary Approval

Business owners are required to provide the following in order to full the company formation in UAE process.

• Completed application form
• Business plan
• Copy of existing trade license/registration certificate (if you are an existing company, applicable for local company only)
• Company’s shareholder/s and the appointed Manager/Director’s coloured passport copies
• Specimen signature of the company’s shareholder/s and the appointed Manager/Director for the new company
• 2 years’ audited financial reports for corporate entity or certificate of reference from a personal bank of the individual shareholder
• NOC from current sponsor (for individuals)
• Unit title deed
• Letter of Intent
• Registry Identification Code Form (RIC) for Manager/Director (Original and notarized)

For freelancers:

• Application for registration
• CV
• Bank reference letter
• Registry Identification Code Form (RIC) (Original and notarised)

Business Registration

Finally, you are a few steps away from opening your new business. At this stage, you must pay the registration and license fees which may vary depending on the license. Secure the below requirements and submit them accordingly.

• Completed registration application
• Board Resolution appointing Manager/Director
• Power of Attorney named under the Manager/Director
• Memorandum and Articles of Association
• Manager/Director’s specimen signature
• Manager/Director’s passport-size photo of against white background
• Share capital information

The required documents must be notarized and attested except for the application registration, passport photo, and share capital information.

Licensing and Visa Procedure

The visa processing will commence once the trade license is issued. The respective free zone authority will then prepare the lease agreements.

To wrap up, we hope that these key steps will give you an insight on how business owners can setup a company in UAE. However, we know that the company formation in UAE process may be challenging to foreign investors. Consequently, we advise to get a consultation from a local business setup partner in UAE that has an extensive knowledge of the market and its regulations. This is to ensure that you will efficiently start your business and is fully compliant with UAE free zone rules and regulations.