Can Free Zone Company Trade In Uae

Daniel Brown
• Monday, 18 January, 2021
• 9 min read

A free zone, also known as freetradezone, is an economic region that provides easy company formation. The UAE free zones were established to increase international business in the country.

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(Source: www.propartnergroup.com)


Free zones offer tax advantages and 100% ownership to foreign nationals. Free zone businesses can benefit from the single-window convenience offered by most free zones in Dubai and across the UAE.

In the UAE, mainland is the main part of each of the seven emirates and is the jurisdiction that is politically, economically, and demographically more important. It is licensed by the respective Department of Economic Development (DID) of the emirate where you decide to register your business.

In accordance with this law, no business is permitted to conduct economic activities in Dubai outside the free zones except through a corporate entity licensed by the DID. Most trading companies in free zones are completely restricted from doing business in Dubai mainland.

Free zone businesses also have the option to connect with a DED-licensed distributor to operate in the mainland. They will also advise which jurisdiction best fits your business activity, provides you growth opportunities, and is cost-effective at the same time.

A company established in Free zone can carry out business in Mainland subject to the restrictions imposed by the law of the UAE. The Freeze trading company can export the goods to the Mainland companies by following the UAE Customs procedures.

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(Source: www.slideshare.net)

Though Freeze is situated within the UAE geographically, it is considered as a separate jurisdiction for such trading activities. Free zone companies are eligible to import goods and equipment from overseas markets to the UAE without paying the customs duties.

Free zone trading companies must ensure all their customs paperwork, information of the goods, trade license, importer code, required bills, etc., are in place to ensure a smooth transfer of goods into the UAE market. The distributor has to obtain a trade license issued by the Department of Economic Development (DID) for carrying out operations in the Mainland.

The DID is the governing body for all the economic activities conducted outside the Freeze areas of Dubai. A Free zone company can open its business in the mainland by registering their branch with the Ministry of Economy and the DID.

If the Free zone company is owned 51% or more by UAE nationals, there is no requirement of appointing a local service agent. The role of a local service agent is to ensure the branch is able to continue its business in Dubai.

Activities like trading, labor supply service, commercial agencies, restaurant licenses are not issued to Free zone branches. Trade name approval certificate will be issued by the DID Passport copy of the general manager and local service agent Copy of the corporate documents of the free zone entity including duly notarized resolution of branch opening and power of attorney for general manager, Local service agent agreement duly notarized in public Bank guarantee of AED 50000 in favor of Ministry of Economy Payment of AED 15,000 as the Ministry of Economy fees.

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(Source: www.slideshare.net)

A UAE Local Service Agent (LSA) must be appointed in the Civil Work Company. The role of SAS is to liaise with the government department on your behalf and assist you with all legal procedures like license approvals, work permit processing, and visa applications.etc.

The licensing process of DID is seamless and transparent similar to the company registration in the Free zones. Free zone authorities require minimum paperwork and duration.

Determine the type of legal entity Choose a trade name Apply for a business license Choose an office space Get pre-approvals, register your business and get your license You need to check with individual free zone authorities about the type of company they can register.

Dubai Multi Commodities Center (DCC) allows forming a limited liability company, which could be a newly formed entity with single or multiple shareholders or wholly owned subsidiary of local or foreign company. While you are deciding upon the type of legal entity your business should take, you should choose a trade name.

In most cases, you should check either with the respective free zone authority or the respective with the Department of Economic Development about the permitted trade names and whether the intended name has already been registered. Has not been previously registered is compatible with the required type of activity and legal status should not contain names of any religion, or governing authority, nor names or logos of any external bodies.

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(Source: www.namaccountants.com)

Branding Agency Events/Festivals Exhibitions/Conferences Information Services (e.g. media related market research) Marketing Communications Media content management (e.g. digital archiving) Post Production (e.g. Film, TV, editing services) Professional Association (e.g. non-profit) Public Relations Rights Management Training (media related) In this case, you would need to apply for a dissemination license.

In DCC, you can choose from over 600 business activities ranging from over 20 sectors such as energy, commodities, gold and diamonds, technology, constructions, FMCG, healthcare, aviation, shipping, education, media, professional services, financial services and personal and community services. Financial businesses include banks, insurance, wealth management and capital markets.

Non-financial businesses include retail shops, restaurants, five-star hotels, art galleries and academic institutions. Commercial/ trade Consultancy/services Industrial Educational Media e-commerce Offshore Freelancer Warehousing Manufacturing.

Dubai Multi Commodities Center (DCC) allows establishing 'single family offices'. It can be owned by one or more individuals or a corporate entity where all shareholders are of the same family.

Office requirements depend on the number of employees and type of business activity of your company. In DCC, you can choose from a flex desk of 20-30 sq.

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(Source: www.slideshare.net)

Mariyah Freeze Authority provides over 100 executive offices suits ranging in size from 15 m2 to 42 m2 with conferencing and internet facilities. Below is a general guideline of steps and documents needed for approvals.

Lease agreements will be prepared by the authority Then trade license will be issued Visa processing will start You can do any business in the fields of financial, educational, retail, hospitality and media to name a few.

Setting up a free zone establishment means that you will work without harsh customs requirements and other restrictive structures. In addition, you will have an easy time finding a workforce that fits the needs of the company and also the policies and objectives of its operations.

Get assistance from a team that has the skills to help you follow the required legal structure when setting up a free zone establishment. This includes registering your company so that it is recognized and regulated by the necessary authority because as much as they allow you to trade freely, they also want you to stick to the legal expectations.

The experts helping you with the establishment will inform you about this requirement plus the duration it will take for the authority to go through your application before issuing a go ahead. This duration helps in analyzing your objectives as well as the area of specialization because your company should benefit the region.

(Source: mybusinessconsulting.ae)

You want these legal documents in the format and structure that is acceptable in the law of the land when moving to this region. The team giving you this help has the skills and experience to handle such sensitive matters and do so within the legal framework of the region.

On the same note, get advice about the state of the economy and other aspects that determine how your brand will be viewed or accepted. This means understanding the buyer behavior or customer response prior to starting the business so that you can position your company strategically.

The analysis will include the number of strong brands that have a stake in the region, and ones that will give you the hardest time as you penetrate the market. This kind of research is essential, and it would be ill-informed to go on setting up a free zone establishment without understanding what you are up against.

When dealing with a team of experts who provide assistance in a variety of sectors and fields, there are no chances of overlooking any important steps in the formation, only to regret afterwards. In essence, there is a lot for you to do, and it all boils down to getting your facts right and seeking information that will ensure your company is accepted and within the legal expectations of the region.

You want to do the same and ensure you can survive the hostility that comes with moving into a new region; some of it positive while other forces might show you that your company cannot last. UAE Free zones offers a bespoke advisory service that gives clear direction and guidance to savvy investors who want to set up their operations in the Emirates, whether onshore or offshore.

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(Source: uae-consult.com)

They can still use Dubai for its business image and banking services by using a RAN Offshore company. The RAN ICC Offshore Company is ideal for doing business internationally.

You can also use the company passively like holding IP or investment (discover more: Use The RAN Offshore As Holding Company)Compared to trade licenses (see below), this legal entity is very flexible to use, and the process of setting one up is straightforward. This is especially so when there is not a lot of substantial activity in the UAE, as is often the case with a RAN Offshore company.

You cannot use a RAN offshore to rent a local office, get visas, or import goods into the UAE. These differ from general business registrations like a Ltd or LLC, due to the fact that they only allow for a certain activity in a certain field.

The logic behind free zones is to provide a hub for similar companies to create synergy. Not all free zones offer the possibility to rent an office space or warehouse.

The Creative City Freeze offers a flexible and easy to set up. This Freeze is one of the fastest to set up your business, requires the least amount of paper work and can be setup remotely. They offer packages without a visa, but also offer one of the cheaper solutions for those who need visas.

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(Source: www.chitku.ae)

Other activities that the Funereal Freeze is good for: internet entrepreneurs, designers, music and entertainment industry, e-commerce, event managers, writers, publishers, online marketing, advertisers, online trainers and many more. They offer the best speed and flexibility, and are most affordable (especially with one-visa packages). A wide variety of activities is possible here, such as trading, industrial activities, consultancy license, service license and a unique freelancer permit.

There is a simple and fast registration process, and no visit to the Freeze is needed. When your business needs real “substance” or rent an office space to hire staff, you go to the DCC. The Dubai Multi Commodities Center Freeze is located at an area better known as Jumeirah Lakes Towers (JET).

Here you can easily rent an office space of any size you want, in a luxurious building. When you set up your business here, you are in the center of New Dubai and on a prime location to receive your clients, giving you the ultimate professional image.

Having said that, the process of setting up this type of company requires a number of different steps and visits to the free zone. Also, the costs are significantly higher than the other Freeze options especially since you are required to hire an office space or flexi-desk in JET.

Other notable possibilities are: KiCad is a Trade, Logistics and Industrial Hub in Abu Dhabi. IFA is another interesting option for businesses with trading or services activities.

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(Source: gulfnews.com)

They offer competitive rates, and the company can be incorporated remotely. This free zone is especially interesting for those setting up a Subsidiary in the UAE, because there is no need for super-legalized documents of the parent company. Legalization is an expensive process needed for normal corporate structures because the UAE is not a member of the Apostle Convention .

There are many free zones, and procedures, prices and requirements change all the time. The free zones compete with each other for business, which gives them an incentive to innovate, and stay attractive to investors. Sometimes a Freeze introduces a new procedure or product, or the market conditions change.

As a result, the Freeze becomes unusable for foreign investors, and falls from this list. But with a few questions it is easy to identify which free zone is the best option for you. Contact us by filling in the form below, if you want to talk to someone about setting up your company.

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