Company foundation in the free trade zone of the United Arab Emirates

Article published on Nov. 10, 2014
Article published on Nov. 10, 2014

This article has not been vetted by an editor at Paris HQ

A free trade zone (FTZ) is a special area of a country, where certain trade issues like tariffs and contingents do not apply and bureaucracy is trimmed down to a minimum.

A free trade zone (FTZ) is a special area of a country, where certain trade issues like tariffs and contingents do not apply and bureaucracy is trimmed down to a minimum. All in the hope that new companies and foreign investors will come to the country. Free trade zones can be defined as work intensive production centres which contain the import of resources or components and the export of fabric production.

The launch of a corporation in the UAE free trade zone (FTZ) is an attractive option for foreign investors. The main focus for free trade zone companies is trade, consultation  and fabrication. Free trade zones are very successful with companies, foreign direct investments and the expansion of non oil export.

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The advantages of a corporation foundation in a free trade zone:

  • 100% in foreign ownership
  • 100% reduction of capital and profit
  • no corporate tax
  • no income tax
  • no trade barriers or quotas
  • best infrastructure for industrial and commercial use
  • easy import and a minimum of export rules
  • no restrictions for employing foreigners

Legal structure in the UAE free trade zone:

  • Possibility to launch a new company as a sole owner
  • Founding a free trade zone company which is owned by 2 - 5 partners
  • Subsidiary - a newly founded company can be registered as a share holder
  • local branch - branch office of an domestic company with residence in the United Arab Emirates.
  • foreign branch - branch office of a foreign company with residence outside of the United Arab Emirates
  • Representative office - A representative office is the office of a company founded in the FTZ to take care of marketing and other non transactional tasks. Usually located in a foreign country where a branch office or a subsidiary is usually not possible

UAE free trade zone license categories:

  • license for commercial use
  • general trade license
  • consultation and service license
  • industrial license

But some business licenses need the approval of the ministries or the authorities, such as bank and financial institutes need an approval of the zentral bank of the United Arab Emirates. Insurances and partner organisations need approval from the ministry of economics and trade, fabrication and industry need the approval from the ministry of finance and industry and pharmaceutical and medical products need an approval from the ministry of health care.

Bank account

A bank account is one of the most important requirements for starting a corporation in the UAE. A variety of local and international bank institutes are located in the United Arab Emirates and they offer a huge range of services and facilities. For example, corporate and personal bank accounts, bank accounts for non residents, online banking, credit cards, check books and lock boxes.

Open Immigration agency files

Each corporation which is registered in the UAE free trade zone can offer visas for share holders or coworkers of the company to make employment authorisation in the United Arab Emirates possible. It is important to notice that each entrepreneur has to submit a company agreement to the immigration agency prior to the application for a visa.

Resident Visa

The amount of visas which can be issued to owners, share holders or coworkers of a company, depends on the volume of the activity, the kind and size of the company, the licenses  and the activities taking place in the FTZ. A visa can be issued for three years or for a permanent stay in the UAE. There is a variety of visa which can be issued, depending on the needs and criteria:

  • working visa (investors, manager, coworkers)
  • family visa (wife/spouse  and children visa )
  • visitors visa