6 Simple Steps to Set Up a Business in a UAE Free Zone
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The United Arab Emirates attracts wealthy individuals, investors and entrepreneurs due to its simplified business formation process, fast processing times and favorable legal framework. In 2023, the UAE made major updates to the Commercial Transactions Law, including lowering the minimum age required to start a business to 18 years. Setting up a business in a UAE free zone is simple and can be completed in six easy steps, as described in the Ministry of Economy.
Step 1: License Type
There are various licenses that UAE Free Zones can offer; The first step would be to determine what the nature of your business is and what category it falls into.
Here are some of them:
- The commercial exchange
- Consulting services
- Industrial
- Educational
- Media
- e-commerce
- Offshore
- Freelancer
- storage
- Manufacturing
- Innovation
Step 2: Legal structure
There are three types of legal structures that your company can have. Depending on the nature of your business and its requirements, you will have to follow a set of rules and regulations.
There are three legal forms of business in the Emirates, they are:
- Free Zone Limited Liability Company (FZ LLC)
- Free Zone Company (FZ Co.)
- Establishment of Free Zone (FZE)
Step 3: Trade name registration
You can apply for a business name through the Department of Economic Development’s app or website.
Please note that a trade name is the name of your company and cannot be similar to the name of any other registered company.
There are some terms and conditions which are as follows:
- Your business name must indicate the legal structure of the company (for example LLC)
- It must not be offensive to the general public or contain inappropriate words.
- It must be compatible with your business/company.
- The business name must not contain the name or logo of any ruler of the UAE, any official logo of the UAE government or the name or logo of any foreign government or government body.
- It must not be registered by another company.
- The trade name and brand must be approved by the Department of Economic Development and the Ministry of Economy, respectively.
- Trade name certificates are subject to renewal.
Step 4: Business Location
Now you must select the right location for your business, with more than 40 free zones available in the country. For a freelance or professional license, you have the option of renting office space or signing up for a virtual office. The type of office space you need will depend on factors such as the number of employees and the nature of your business. You can choose from fully furnished or partially furnished offices, which can be rented or purchased once you obtain your business license. Typically, properties in free zones are available for rent. Additionally, free zones offer various facilities to help investors establish their businesses, including IT infrastructure, obtaining NOC letters or ‘To Whom It Concerns’ letters and managing residence visas, including their issuance, renewal and cancellation.
Step 5: Receive initial approval
To receive your initial approval, you must submit all necessary documents and ensure you have met all required criteria.
Here are some common documents you will need to prepare:
- Completed application form
- Business plan
- Copy of existing business license/registration certificate (if applicable)
- Copies of passports of the company’s shareholders and the designated manager.
- Registry Identification Code (RIC) form of the designated administrator (original and authenticated before a notary)
- Sample signatures of the company’s shareholders and the designated manager.
- Property titles (if applicable)
- A brief letter clarifying the investment idea and the investor’s plan (Letter of Intent)
- 2 years of audited financial reports or reference certificate from a bank (as required)
- Documents commonly required for freelancers/professionals
- Registration application
- Curriculum vitae or profile
- Reference letter from a bank.
- Registry Identification Form (RIC) of the Director (original and notarial document)
Step 6: Payment
Finally, you will be required to pay fees to receive a license for your business. Their fees would also include the company’s license issuance fees.
You will also be asked for some documents, some of which are listed below:
- Complete registration application form
- Board Resolution appointing Manager/Director (legalized and certified by notary)
- Power of attorney granted to the Manager/Director (notarized and certified)
- Memorandum and Bylaws (Notarized and Attested)
- Signature model of the Manager/Director (notarized and certified)
- Passport size photographs of the Manager/Director
- Information on share capital
News Source: Khaleej Times
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