Introduction
A Free Zone Establishment (FZE) is a company structure that allows a single individual or corporate entity to be the sole shareholder. This type of entity is unique to the Free Zones of Dubai and other parts of the UAE. FZEs offer a range of benefits that make them attractive to investors and entrepreneurs looking to set up a business with full control and without the need for a local sponsor. This article delves deeper into the specifics, features, and processes involved in setting up an FZE in Dubai.
What is a Free Zone Establishment?
An FZE is a business structure designed to provide maximum benefits to individual entrepreneurs or corporate entities planning to set up a business in Dubai’s Free Zones. It allows 100% foreign ownership, full repatriation of profits, and generally offers a more flexible business environment compared to mainland companies.
Key Features
100% Foreign Ownership
One of the major advantages of setting up an FZE is that it allows 100% foreign ownership, thus eliminating the need for a local sponsor. This provides greater control over the company’s operations and profits.
Flexibility in Licensing
An FZE can choose from a variety of licenses, such as:
- Trading License: Allows you to engage in import and export activities.
- Service License: Permits you to provide services indicated in the license.
- Industrial License: Enables you to engage in manufacturing activities.
Full Repatriation of Profits
FZEs enjoy the benefit of being able to repatriate all capital and profits, making them financially advantageous for foreign investors.
No Import or Export Duties
Goods can be imported and exported without the imposition of standard import duties, making it cheaper to run trading activities.
Simplified Registration Process
The registration process for an FZE is generally straightforward and quicker than for mainland companies, often requiring less paperwork and due diligence.
Confidentiality
FZEs offer higher levels of confidentiality, as many Free Zones do not require a company to disclose extensive financial information.
Eligibility and Documentation
To set up an FZE, you’ll generally need:
- A completed application form
- Business plan
- Copy of existing trade license/registration (if you are an existing company, applicable for local companies)
- Copies of shareholder’s passport and visa
- Proof of address for the shareholder
Steps to Register an FZE
- Choose a Free Zone: Research and decide on which Free Zone is the best fit for your business. Each Free Zone has its own rules, costs, and benefits.
- Submit the Necessary Documents: This typically includes your business plan, passport copies, and any special application forms required by the specific Free Zone.
- Obtain Initial Approval: Preliminary approval is given subject to the submission and verification of additional documents.
- Pay the Required Fees: After approval, you need to pay the registration fee and any other charges that may apply.
- Receive Your License: Once the fees are paid, the Free Zone authority will issue your business license, and you can start your business operations.
Regulatory Compliance
Each Free Zone has its own regulatory body, and FZEs must comply with the rules and regulations stipulated by these authorities. Failure to comply may result in fines, legal actions, or the revocation of the business license.