The Free Trade Zones have been set up with the specific purpose of facilitating investment. The procedures for investing in the zones are relatively simple.
The companies operating in the Free Zones are treated as being offshore, or outside the UAE for legal purposes.
The free zones are suitable for companies intending to use UAE as a regional manufacturing or distribution base, with the bulk of their business outside the UAE.
Free Zone Incentives
Free Zone Limitations
Companies approved for operation in Free Trade Zones, can apply for one of the following types of licenses; Industrial; Service; or National Industrial. These licenses are renewable annually. Trading licenses are granted to locally incorporated companies, and to companies incorporated outside the UAE. Trading licenses are also issued to Free Zone Establishments (FZE) and Free Zone Companies (FZCo’s)
Industrial licenses are issued to companies incorporated outside the UAE, FZE’s and FZCO’s. Service licenses are only granted to companies holding a UAE license.
National Industrial licenses are issued to companies registered within or outside the UAE, provided they meet the conditions of having atleast 51% AGCC equity and their local production accounts for atleast 40% value added. Products exported by such companies to AGCC states will be exempted from custom duties. Companies holding Free Zone liceses are also permitted to operate outside the UAE. Operations within the UAE can be undertaken by appointing a commercial agent.
Setting up a branch of a Foreign Company
A foreign company can set up a 100% owned branch in the Free Zone. A questionnaire and license application form with necessary documents are required to set up a project by a foreign company. Thereafter, a lease agreement and a personnel second agreement will be signed.
If the company’s project involves the erection of a structure, a building permit will be issued after detailed plans are submitted and agreed.
Administrative work, such as importing equipment or engaging labour for installation of equipment, may proceed in parallel with construction work.