Free Zones Of Uae: A Gold Mine For Foreign Investors

Any company that is overseas in origin and wants to enter the Dubai has two options: either strive for business setup in Dubai for a company that works on LLC (Limited Liability Company) basis that can be operated anywhere in the UAE or register a company in a free zone of Dubai. Since the past few decades, many free zones have been developed in Dubai to attract overseas investment directly into the region. The overseas companies can gain a lot of advantages through these free zones and are one of the best ways for a foreign company to settle and flourish in Dubai.

The biggest advantage that a foreign company can have from setting its business in a free zone is 100% ownership. This is very beneficial for foreigners as they are not allowed to have complete ownership of a company completely in the main city. They cannot even hold a majority of shares in the main Dubai through LLC and can have only 49% shares of a company. But the free zones of Dubai do not imply such restrictions on foreign investors. The investors have the freedom to own as much as they want while doing business in the free zone.

Free zones provide an awesome infrastructure and environment for business. All the possible features required to conduct a business are available in these free zones a faultless platform is provided to the companies due to which they can easily conduct their business activities. The government is also interested in the development of free zones or in other words such companies have government support, too and hence they also benefit the companies.

The second advantage of free zones is the independence from paying taxes given to all the companies. The businesses initiated in the free zones are free of paying taxes for a few years and the period may range from 10 to 15 years and this freedom is renewable, too.

Besides the advantages, some disadvantages are also associated with the process of initiating a business in the free zone of Dubai. The free zones feel like an awesome idea but the advantages are also enormous for those who work in these areas. The biggest disadvantage is that the business holders cannot expand their businesses beyond the free zones into the main markets of UAE. They cannot supply their products to customers outside the free zones. It is a very big restriction as far as the business owners are concerned who want to cater their services to the entire UAE.

The second significant disadvantage for operating in a free zone is that each free zone is designed for a particular type of business. You cannot operate a technology related company in a free zone which is designed for import and export businesses. Hence the business activities are restricted to the type of business designated to a free zone.

If you have started a business and you are worried about the business registration in Dubai, then don’t hesitate to contact us, the consultants for worldwide company formation. They offer their services and take all the responsibility from the very start of your business to its registration.