Which Free Zone Jurisdiction to Choose in the UAE?

Are you thinking about setting up your business in Dubai and the UAE?

Are you an investor looking for a market and jurisdiction with high growth potential?

Is the UAE one of the jurisdictions which interests you, but that which you have no prior knowledge of?

Or are you a foreign investor already deciding to relocate to the UAE but still wondering which type of Dubai company registration is the best for you?

Worry no more, for this article explains the available options and highlights a few free zones which are generally chosen by clients due to various reasons such as location, available infrastructure, support, and pricing.

At INCORPORTAS, we usually identify and recommend the suitable free zones for client’s proposed business registration after conducting an in-depth discussion and or meeting with the clients, but we hope this article will allow you a general understanding of the various free zones in the UAE, and some highlighted characteristics.

What are Free Zones again?

In brief, free zones across the UAE have a few similarities, namely 100% foreign ownershipcorporate and personal income tax holiday, and VAT applicability where relevant.

Differences between free zones generally involve pricing, available infrastructure and facilities, and supported business activities.

For a better understanding of free zones, please check out this article.

How to Choose Free Zones?

Choosing the most relevant free zone generally depends on three main factors, business activitiesdegree of physical presence, and location requirements.

– Business Activities

Certain free zones, such as Dubai Multi Commodities Centre (DMCC) offer a multitude of licensed activities, almost everything business activity that one can possibly operate; whereas certain free zones are more industry-specific, such as Dubai Media City, a Dubai-based media sector-focused free zone, or Creative City Fujairah, Fujairah’s consultancy and professional services-focused free zone.

Do you have a specific business activity in mind, or are you looking for something more general in scope?

– Degree of Physical Presence

Does your proposed business require a physical office, or warehouse, or a manufacturing facility?

Not all free zone jurisdictions offer different types of facility within their zones, hence knowing the client’s specific needs helps us narrow down the focus.

For example, Jebel Ali Free Zone Authority (JAFZA), offers all facilities (office, warehouse storage, manufacturing plant facilities) and even access to a sea port, whereas KIKLABB only has office facilities, and no warehousing or manufacturing provisions.

– Location Requirements

There are close to 50 free zones across the UAE, and throughout the 7 emirates.

If you are interested in a Dubai-based location for your company, then Dubai-based free zones are the most logical option for you.

Alternatively, if the location of your proposed UAE free zone company is not a huge concern, free zones in the Northern Emirates such as Umm al-Quwain, Ras al-Khaimah, Fujairah tend to offer a more cost-effective company registration.

So, which free zone should I choose in the UAE?

Umm al-Quwain Free Trade Zone (UAQFTZ)

One of our favorite jurisdictions for business incorporations in recent times, Umm al-Quwain Free Trade Zone is situated in the emirate of Umm al-Quwain, in the northern region of the UAE.

With its streamlined approach to the licensing registration process, a wide base of available licensed business activities, its status as a VAT Designated Zone, a flexible residence visa allowance and application program, this free zone is one of the most affordable free zones in the UAE.

Sharjah Media City (SHAMS)

Located just north of Dubai, Sharjah Media City (SHAMS) is one of the few free zones within Sharjah with minimal upfront and renewal costs.

Despite being called “Media City”, SHAMS is not restricted to only media-related companies. In fact, the activities offered are varied in line with most other free zones; and its onboarding process is also straightforward and simple.

Similarly to UAQFTZ, this is also a suitable option for investors looking to keep initial upfront costs to a minimal.

A SHAMS company offers the greatest flexibility and convenience for your business setup in Dubai and the UAE.

Dubai Multi Commodities Centre (DMCC)

Arguably one of most world-renowned free zones in the UAE, if not the most well-known, Dubai Multi Commodities Centre (DMCC) is a prestigious jurisdiction of choice for your proposed free zone company if the budget allows.

The cost of licensing a DMCC company starts from 50,000 AED onwards, not inclusive of ancillary expenses such as residence visas, mandatory health insurance, which will add up to the final cost.

Having said that, DMCC accords clients with exceptionally streamlined licensing registration procedures, solid infrastructure support, user-friendly portal features for all company-related matters, one of the widest variety of business activities available, various choices for office facilities, and a prime location in the heart of Dubai.

It is almost impossible to mention free zones in the UAE without mentioning DMCC, and should clients find themselves seeking the above requirements and with the financial appetite for such, DMCC is the free zone of choice for clients.

Khalifa Industrial Zone Abu Dhabi (KIZAD)

One of Abu Dhabi’s newer free zones, Khalifa Industrial Zone Abu Dhabi is a trade, logistics and industrial hub linked to Khalifa Port Abu Dhabi.

Targeted towards larger-scale companies, with an emphasis on the industrial sector but still offering products and packages for the SME sector, KIZAD also offers a competitive pricing solution comparable to Northern Emirates free zones, and significantly lower than Dubai-based offerings.

Being a company located in the capital may also accord a certain prestigious aura for your proposed company, and we have seen a slight ease in obtaining bank accounts for KIZAD-based entities.

International Free Zone Authority- Dubai (IFZA- Dubai)

Previously domiciled in Fujairah and recently shifted to Dubai Silicon Oasis under a strategic partnership and cooperation framework, IFZA-Dubai is also another choice for clients, for a mid-range priced solution for a free zone company setup in the UAE.

Are these the only available free zones in the UAE?

Didn’t you mention earlier there are close to 50 free zones in the UAE?

Yes, because of the numerous free zones available in the UAE, and ongoing ever-changing pricing and requirements, it is not feasible for us to maintain an active list of all the free zones and its unique offerings.

Hence we hope that by highlighting a few distinctive and interesting free zones, it can help to shed some information on the jurisdictions on offer in the UAE, and for you to have a general view, before we initiate our consultation for a tailored solution.

Due to the competitive nature of the free zone jurisdictions, and generally targeting the same pool of prospective clientele, free zones in the UAE constantly innovate and introduce new solutions, ultimately benefitting clients and investors.

Changes to the regulatory regime and market conditions may also result in an upgrade, or downgrade of a free zone’s appeal and usefulness for investors. As a result, do contact us for the latest news on the range of free zones that are the right choice for you and your needs.

Let us at INCORPORTAS help you identify which free zone to choose for your business setup in Dubai and the UAE today.

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