Types of business entities in the UAE free zone

Types of business entities in the UAE free zone

UAE is a major business hub attracting investors from all over the world! The UAE has around 40 free zones, with more under construction. Starting a business in a free zone enhance the formation of companies with spacious work space and world-class amenities. The free zones are designed under commercial categories and only offer license to companies under the specific category. 

UAE Free Zone Formation allows entity to be free from foreign ownership restrictions. Free zone authority issue operating licenses and focus on regulating the activities of companies within the free zone. The entrepreneurs can choose the free zone entities and register in accordance with the legal requirements in UAE.

Free Zone entity in the UAE

Before initiating your venture, select the appropriate type of corporate entities that suits your business activity. There are three main types of free zone entities in UAE including

  • Free zone establishment
  • Free zone company
  • Branch office of foreign company

Free zone establishment or FZE

Free zone establishment have a single shareholder among the UAE free zone companies. The rules and regulations are equivalent to its MoA or Articles of Association. The FZE entity should have at least two directors and a secretary. Individual can jointly manage the offices of director and secretary. It’s similar to the Free zone Company with a single shareholder. 

International Business Company – it’s a company for operating business outside UAE. The offshore company has some benefits like, 

  • Tax exemptions
  • Cost-effective solutions
  • Unlimited number of shareholders
  • Not necessary to report
  • No restrictions to authorized capital
Some of the documents required for starting a business in a free zone, 
  • Original bank reference
  • Personal details of owner or shareholder
  • Letter of appointment with specimen signature including passport copy and power of attorney. 

Free zone Company

Free Zone Company usually operates within the free zone boundaries. The company has two or more shareholders and popularly known as limited liability entity. Free zone companies, Dubai or UAE should submit their audited financial statements to the UAE free zone authority. They should submit the documents every three months from the end of the fiscal year. The entity should have at least two directors and a secretary. The offices of director and secretary can be jointly held by an individual person. 

 Some of the features of Free Zone Company include,

  • 100%  ownership in the company  by foreign subscribers
  • Obtain license for operating business in the Emirates
  • Obtaining resident visa for employees and owners
  • Customs and tax exemptions
  • Report requirements
Documents required for starting a business in a free zone,
  • Notarized certificate of registration or incorporation of the company
  • Reference letter from the bank concerning the creditworthiness of the company
  • Letter of appointment with specimen signature including passport copy and power of attorney. 

Branch Office

Branch office in a UAE free zone, is a dedicated outlet of a company. It doesn’t constitute as a separate legal entity. Branch office serves as a means to expand their business across different countries. Establish your company presence in new regions and enhance prospects of sales or revenue. 

UAE free zone formation branch office is incorporated with the help of Local service agent through the ministry of commerce and economics.

Branch office is divided into the following types, 
  • Foreign company branch – it will operate as head quarters in the region with 100% ownership of the parent company
  • UAE company branch – extension of UAE-based company 
  • Free zone company branch – it can be opened by acquiring license from DED, given the owner has an Emirati

GCC company branch – this allows to undertake one or more activities as legislated in the main company license. Some of the documents required for starting a business in a free zone, 

  • Application form – pre approved
  • Passport copy including UAE residence visa and copy of Emirates ID 
  • Proof of residential address
  • Parent company’s documents copy
  • Your office address in the UAE free zone
  • Approval from third party for certain business activities

How A & A associates support UAE Free Zone Formation?

A & A associate is a popular business consultancy with successful track record of establishing world recognized companies in the UAE free zones. We offer complete incorporation services for all type of business structures, company jurisdictions, and legal entities. 

While starting a business in a free zone, we ensure right guidance in selecting the business form with detailed information. Our company incorporation services include filing of documents, business licensing, accounting services, and bank account opening. We pride ourselves for providing the most affordable UAE company formation packages!

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