The United Arab Emirates is regarded as one of the most appealing jurisdictions for conducting business and forming corporations. This is owing to the UAE government's well-thought-out policies. In truth, the government provides a competitive environment for starting and growing a profitable business, including the existence of so-called Free Trade Zones (FTZs), which are specialized locations created for specific business activities. There are around ten free zones in Dubai, which allow multinational investors to expand into the Middle East and beyond. You can choose from a variety of free zone company formation alternatives that fit the type of your firm. You can select the finest solutions depending on your legal and business preferences, whether it's the location, the brand, or the free zone's facilities that appeal to you. Because each free zone is designed to facilitate specific forms of business activity or transactions, it's critical to have legal guidance from well-qualified lawyers tailored to your company's needs. It's worth noting that 20 of the 35 Free Trade Zones are located within the Emirate of Dubai. This emirate is now the world's greatest international business hub.

The rules and regulations of the Free Trade Zone in which it is registered control a Free Zone Company. If you want to utilize the company to conduct business outside of the FTZ, it will be subject to the UAE Commercial Companies Law, as well as the licensing process and other regulations of the Emirate in question.

Free Zone Companies are permitted to engage in retail trade activities outside of the free trade zone if they can secure a local distributor or official agent from the UAE. This type of activity is subject to a 5% import duty.

There are various advantages to forming a company on the territory of the UAE Free Trade Zones, including: no necessity for a UAE native to be a shareholder; the possibility of 100% foreign ownership; and the ability to establish a corporation on the territory of the UAE Free Trade Zones.

• the taxes on importation and exportation are not imposed;
• Repatriation of all capital and profits;
• There are no currency controls or limits; there are no foreign exchange controls or restrictions.
• a 15-year tax-free term for corporations, with the option to extend it for another 15 years;
• There is no personal income tax;
• There are no restrictions on the citizenship of firm employees;
• Infrastructure is complete.

The supply of resident visas for all members of the management board, shareholders, and firm personnel is another advantage of using the UAE FTZs. The number of such visas that can be issued is normally determined by the total area of the rental space (1 visa equals 10 square meters). However, different FTZs may have distinct terminologies.

You should also keep in mind that free zone businesses are required to rent at least some minimal office space, which can be a real office or a so-called flexi desk, which is a virtual office that is permitted in some free zones. Depending on the requirements of a given Free Trade Zone, a company renting a flexi desk may apply for 1-3 employment visas.

The applicable law of the Free Trade Zones allows investors to establish the following sorts of businesses:

• Establishment of a Free Zone (Single Establishment);
• a Limited Liability Company (LLC) with two or more shareholders; a Free Zone Company (LLC) with two or more shareholders; a Limited Liability Company (LLC) with two
• a branch or representative office of an existing or parent company based in the UAE or elsewhere.

The UAE FTZs are frequently utilized for commerce, investment, finance, and other purposes. The authorized activities vary depending on the type of license obtained. Companies operating in a free zone can select from the following options:

• License for commercial use;
• a general business license;
• a business license;
• License for providing services.

Both the License and the Lease Agreement have a one-year expiration date and must be renewed annually.

With 100% foreign ownership of a company in the UAE and the capacity to trade or operate within the freezone entity, firms looking to expand their operations to the Middle East can gain greatly.

Free zones are basically economic zones where goods and services can be traded at reduced tax and customs rates. The idea behind implementing the free zones is for the encouragement of business, i.e, the international business in the region by providing 100% company’s ownership with the foreigner. There are 45 free zones in the United Arab Emirates at the moment. The UAE's free zones have evolved over time to provide ever-increasing benefits to the firms that operate within them. Many free zones are tailored to specific industries or types of businesses.

Why should you put up shop in a freezone?

In most free zones, the important factor is to be noted is the setting up of the process is very uncomplicated. The specific application process will vary depending on your business activity and free zone of choice, but in many situations, you will only need to submit a few pieces of basic evidence such as passport copies and business paperwork. The entire procedure usually takes about a week or two. Many free zones also provide Flexi-desk and virtual packages, which allow you to use the address and services of the free zone on an as-needed basis.

The tax regime is likely the most convincing reason to pick a freezone. When you establish a business in a free zone, you will not only benefit from 0% corporate and personal tax, but you will also be exempt from VAT, which is currently at 5%. Not only that but there's more. Businesses in free zones are also freed from import and export taxes, as well as currency limitations.