Company Formation |Key steps to start a business in UAE Free Zones
Setting up a business in a free zone is relatively easier. Free zone authorities require minimum paperwork and duration. Here are the key steps to set up a business in a free zone.
- Determine the type of legal entity
- Choose a trade name
- Apply for a business licence
- Choose an office space
- Get pre-approvals, register your business and get your licence
Determine the type of legal entity
Determine the type of legal entity your business would take up. In a free zone, you can set up one of the two types of companies:
- Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.)
- Free Zone Establishment (FZE)
The differences lie in the number of shareholders and whether the shareholder is a natural person or a legal person. All free zones might not register both types of companies. You need to check with individual free zone authorities about the type of company they can register. Refer to the list of free zones and their authorities.
Dubai Multi Commodities Centre (DMCC) 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.
Existing local and foreign companies may set up a branch of their company in free zones.
There is no minimum capital requirement at twofour54 Abu Dhabi.
In KIZAD, you can form an LLC for which the minimum paid-up capital should be AED 150,000.
In Dubai Airport Free Zone, you can form an FZ Co. with a minimum share capital of AED 1000. Each share should be in the denomination of AED 1000.
In DMCC, the minimum share capital for forming a free zone company is AED 50,000 per company and AED 10,000 per shareholder. For a company to be issued a General Trading Licence, it should have a minimum of AED 1 million share capital.
In Hamriya Free Zone, you can form an FZE with a share capital of AED 150,000.
Choose a trade name
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.
As per the website of twofour54, you cannot use ‘Abu Dhabi’ and/or ‘United Arab Emirates’ in the name of the FZ-LLC or the branch.
Refer to DMCC’s list of restricted trade names (PDF, 207 KB).
In general, for DED to approve the proposed trade name, the key requirements are that the trade name:
- must not violate the public morals or the public order of the country
- must be followed by the legal form of the company, for example (LLC, FZE, DMCC etc.)
- 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.
- Registering the trade name – Abu Dhabi portal
- Trade name search – Abu Dhabi Government portal
- Search trade name – DED, Dubai
- Trade name inquiry – Sharjah Economic Development Department
- Trade name issuance – Sharjah Economic Development Department
Apply for a business licence
The type of business licence you will apply for depends on the primary activity of your business.
Types of business activities you can conduct
In twofour54, you can carry out the following businesses:
- Content production
- Corporate Film production
- Corporate Print Material
- Digital content production (e.g. CGI, 3D etc)
- Educational content material
- Film production
- Gaming development
- Graphic design
- Mobile media (e.g. content for interactive media services on mobile phones)
- Music production and recording
- Music videos
- Online electronic content production (e.g. websites, e-books, travel guides etc.)
- Performing arts and theatre
- Print content production (e.g. magazines, journals, periodicals, newsletters, guides, and handbooks etc.)
- Radio content production
- Script writing
- Software development (e.g. applications)
- Song writing and composing
- TV production
- Web design and development (e.g. portal, search engine, community site, web production, online library)
Other business activities
- Branding Agency
- 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)
Publishing and broadcasting
- publish a book
- publish a magazine
- publish a newspaper
- broadcast a satellite/terrestrial television channel
- broadcast a satellite/terrestrial radio channel
In this case, you would need to apply for a dissemination licence.
In DMCC, 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. Refer to the list of businesses you can conduct in DMCC.
In DIFC, you can conduct financial and non-financial businesses. 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. Read more on the page about areas of business in DIFC.
Accordingly, some types of business licences are:
Dubai Multi Commodities Centre (DMCC) allows establishing ‘single family offices’. These have the standard FZ LLC structure. They can provide services to a family member, family business, family entity (corporate structure) or family trust. It can be owned by one or more individuals or a corporate entity where all shareholders are of the same family.
Choose an office space
You can either buy or lease office spaces in free zones. Office requirements depend on the number of employees and type of business activity of your company.
In DMCC, you can choose from a flexi desk of 20-30 sq. m., a flexi office of 200-265 sq. m., or offices running through multiple floors totalling up to 2,000 sq. m. each.
Hamriyah Free Zone Authority provides over 100 executive offices suits ranging in size from 15 m2 to 42 m2 with conferencing and internet facilities. Refer to its leasing and licensing guide (PDF, 200 KB).
Get pre-approvals, register your business and get your licence
Companies established in free zones are governed by the rules of the respective free zones. To get the necessary approvals, you need to apply with the documents. The list of documents varies on the type of business activity, the type of company and the requirements of the free zone authority. Below is a general guideline of steps and documents needed for approvals.
A. Initial approval
First, you need the initial approval. You are required to provide:
- Completed application form
- Business plan
- Copy of existing trade licence/registration certificate (if you are an existing company, applicable for local company only)
- Coloured passport copies of the company’s shareholder/s and the appointed Manager/Director for the new company
- 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 notarised)
Freelancers need to submit fewer documents. In most cases, they need to submit:
- Application for registration
- Bank reference letter
- Registry Identification Code Form (RIC) (Original and notarised)
After getting initial approval, you need to pay registration fees and licence fees. The fees depend on the type of licence required. Then, you need to submit:
- Completed application for registration
- Board Resolution appointing Manager/Director (Notarised and attested)
- Power of Attorney given to Manager/Director (Notarised and attested)
- Memorandum and Articles of Association (Notarised and attested)
- Specimen signature of Manager/Director (Notarised and attested)
- Passport-size photo of Manager/Director against white background
- Share capital information
C. Licensing and visa process
- Lease agreements will be prepared by the authority
- Then trade licence will be issued
- Visa processing will start
Note that certain activities may be subject to approval from external authorities. Refer to special cases.
Authorities regulating free zone activities
Refer to the websites of free zones and the authorities in:
The emirate of Abu Dhabi
- Abu Dhabi Airport Business City
- Abu Dhabi Media Free Zone – (Media Zone Authority)
- Masdar City
- Khalifa Industrial Zone Abu Dhabi ( KIZAD)
The emirate of DubaiUnder Dubai Creative Clusters Authority :
- Dubai Internet City
- Dubai Media City
- Dubai Production City
- Dubai Studio City
- Dubai Outsource City
- Dubai Knowledge Park
- Dubai International Academic City
- Dubai Science Park
- Dubai Design District
Under Dubai Multi Commodities Centre Authority:
- Jebel Ali Free Zone (Jebel Ali Free Zone Authority)
- Dubai Airport Free Zone (Dubai Airport Free Zone Authority)
- Dubai Silicon Oasis – (Dubai Silicon Oasis Authority)
- Dubai HealthCare City – (Dubai Healthcare City Authority)
- International Humanitarian City
- Dubai Maritime City – (Dubai Maritime City Authority)
- Gold and Diamond Park
- Dubai South
- Dubai International Financial Centre
- National Industries Park (TechnoPark)
The emirate of Sharjah
- Sharjah Airport International Free Zone (Sharjah Airport International Free Zone Authority)
- Hamriyah Free Zone (Hamriyah Free Zone Authority)
- Sharjah Media City Free Zone (announced)
The emirate of Ras Al Khaimah
The emirate of Ajman
The emirate of Umm Al Quwain
- Umm Al Quwain Free Trade Zone (Umm Al Quwain Free Trade Zone Authority)
The emirate of Fujairah
Apart from the respective free zone authorities, certain industries/sectors of businesses are additionally governed by other government entities. Some of them are mentioned below.
The following entities govern media organisations in the UAE:
Food and beverage
The following entities govern food and beverage businesses in the UAE:
- Abu Dhabi Agriculture and Food Safety Authority
- Dubai Municipality
- Sharjah Municipality
- Ras Al Khaimah Municipality
- Ajman Municipality and Planning Department
- Umm Al Quwain Municipality (in Arabic)
- Fujairah Municipality
What We Do
- Deliver strategic ideas on identifying the suitable free zone area for the client
- prepare all incorporation documents
- Name approvals and other governmental approvals
- Assistance in Bank account opening
- Acting as your personal advisors for all business registration and continuity
- Assistance in Audit reports & Book keeping
- Feasibility and project reports for the new incorporations and much more….
Alya Al Marzooqi Auditing Chartered Accountants (Alya Auditors) can surely help you in setting up your business dream in Dubai.
For all assistance please feel free to contact us Tel: +971 4 876 9377, Mob: +971 52 975 0690, +971 52 475 4007 or Email us at : audit@alya auditors.com