UAE has always been an attractive location for setting up Free Zone Company because it offers a lot of benefits one of which is tax exemption. There are a lot of people who do not know the advantages and disadvantages of Free Zone Companies so here we go:

Advantages of Free Zone Companies in UAE:

  1. Free Zone Company give 100 ownership which is one of the main attractive feature of Free Zone Companies.
  2. Free Zone companies are exempted from tax in UAE.
  3. Imports within free zone companies get an exemption from 5% custom duty.
  4. Free Zone companies provide 100% confidentiality on the assets owned by free zone Company set up.
  5. There are no trade barriers for companies to trade within free zone companies and also all around the world with no trade limitations.
  6. You do not need physical company for a free zone company set up which is beneficial as it would require little time to set up the company.

Disadvantages of Free Zone Companies in UAE:

  1. Free zone companies have difficulty in trading with companies outside the free zone. The law prohibits free zone trade with the rest of the country but this is only for the service providers as international trade does not fall in this category.
  2. Expansion of free zone companies into other UAE markets is not permitted.
  3. It limits choices for a free zone company in UAE of offshore spaces available and rent depends on the jurisdiction.

How to set up a free zone company:

First you have to see what kind of company you want. There are two types of free zone companies. Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.) and Free Zone Establishment (FZE). Then you have to look for the location according to your budget and decide a trade name. You have to check with the free zone authority or the department of economic department about the permitted trade name. You will have to apply for a free zone license. Select an office space if you want to setup a proper office then apply for registration. You are required for certain documents for approval and registration of your business.

You can setup your company in any of your desired city in UAE such as Dubai or Sharjah etc. A Free zone license in Sharjah can be obtained by submitting the required documents.