Setting Up and Managing Free Zone Companies in the UAE: A Comprehensive Guide by Yungo Law

Setting Up and Managing Free Zone Companies in the UAE: A Comprehensive Guide by Yungo Law

Setting up a business in the UAE can feel overwhelming, but it doesn’t have to be. Free zone companies offer a range of benefits that make the UAE an ideal place to start or expand your business. At Yungo Law, alongside our sister company Yungo Corporate, we’re here to guide you through the entire process—making it as smooth and efficient as possible.

Why Set Up a Free Zone Company in the UAE?

Free zones are special areas within the UAE designed to attract foreign investors by offering benefits that aren’t available in the mainland. Some of the biggest perks include:

• 100% Foreign Ownership: Unlike in the mainland, you don’t need a local partner.
• Tax Breaks: Potential 0% corporate tax and 0% personal income tax, depending on your business activity.
• Profit Repatriation: You can take 100% of your capital and profits out of the country—no questions asked.
• No Currency Restrictions: Enjoy the flexibility in moving your money.
• Simplified Setup: Company formation, licensing, and visa procedures are all streamlined.
• Modern Infrastructure: State-of-the-art facilities and prime locations near airports and seaports make logistics easier.

Whether you’re an entrepreneur looking to expand, or a multinational exploring new opportunities, a UAE free zone can give your business the edge it needs.

Key Requirements for Setting Up a Free Zone Company

With over 40 free zones across the UAE, each has its own features, but the main requirements are largely the same:

1. Initial Approval: Get initial approval from the free zone authority.
2. Company Name: Choose a name that’s approved by the authority.
3. Office Lease: Lease office space within the free zone.
4. Licensing: Obtain all necessary licenses and permits.
5. Share Capital: Meet the minimum share capital requirements, if applicable.
6. Documents: Submit required paperwork such as passport copies and a business plan.
7. Fees: Pay registration and licensing fees.

Step-by-Step: How to Set Up a Free Zone Company

To make it easier for you, here’s a simplified version of the steps involved in setting up a company in a UAE free zone:

1. Pick a Free Zone: Choose the one that aligns with your business needs.
2. Choose a Company Type: Decide if you want a Free Zone LLC, a Branch, or another type.
3. Apply for Initial Approval: Start the application process.
4. Reserve a Company Name: Secure a name for your business.
5. Lease Office Space: Find the right office setup.
6. Submit Documents: Gather and submit all the required paperwork.
7. Pay Fees: Handle the registration and licensing fees.
8. Obtain Trade License: Get your business legally registered.
9. Open a Corporate Bank Account: Set up an account to manage finances.
10. Apply for Visas: Secure visas and work permits for you and your employees.

Documents You’ll Need

For Individual Shareholders:

• Passport copies of shareholders and directors.
• No objection certificate from the current sponsor (for UAE residents).
• Bank reference letter.
• Business plan.
• Office lease contract.
• Power of Attorney.
• Specimen signatures.

For Corporate Shareholders:

• Incorporation Certificate.
• Memorandum and Articles of Association.
• Good Standing Certificate.
• Incumbency Certificate.
• Shareholder Resolution.
• Power of Attorney.
• Board Resolution.
• Specimen signatures.

Choosing the Right License

The right license depends on what you’re planning to do. Here are some common options:

• Trading License: For those looking to import or export goods.
• Service License: Ideal for consultancies and service providers.
• Industrial License: If you’re in manufacturing, this one’s for you.
• Logistics License: For businesses that handle logistics and transportation.
• E-commerce License: For online businesses and digital trade.

Picking the right license is key, as it determines what your business can do and the markets you can tap into.

Ongoing Compliance—What You Need to Know

Setting up a company is just the beginning. To keep your business running smoothly, there are ongoing requirements you must meet:

• Annual License Renewal.
• Maintain Office Lease (or desk space, depending on the activity and free zone).
• Submit Audited Financials (if required by your free zone).
• Renew Employee Visas.
• Follow Free Zone Regulations.
• Register for VAT and Corporate Tax: Companies must register for VAT if they exceed the revenue threshold of AED 365,000 and, independently from any threshold, for corporate taxes.

How Yungo Law Can Assist You

Setting up a free zone company can be straightforward—but only when you know what you’re doing. At Yungo Law, we’re here to guide you at every stage:

• Picking the Right Free Zone: We’ll help you choose the best location and license type for your business.
• Handling the Paperwork: From registration to licensing, we manage all the submissions for you.
• Liaising with Authorities: We handle the red tape, so you don’t have to.
• Reviewing Legal Documents: Ensuring everything is in line with UAE regulations.
• Office Leasing: We assist with finding the right space for your business.
• Full Guidance Throughout: You’re never on your own; we’re here every step of the way.

Ongoing Support from Yungo Law

After you’re set up, our support continues. We offer:

• License and Visa Renewals.
• Corporate Secretarial Services.
• Legal Compliance Advice.
• Help with Company Changes or Expansions.
• Bookkeeping and Accounts Management through our trusted partners.
• VAT and Corporate Tax Filings with the Federal Tax Authority.
• HR Services: Support for payroll, payslips, and salary payments.

Common Challenges and How We Can Help

Setting up and running a free zone company isn’t without its challenges. You might face:

• Complex Regulations: Understanding the different rules can be tough.
• Licensing Restrictions: Making sure you have the right license for your activities.
• Visa Quotas: Dealing with visa allocations can be confusing.
• Governance and Compliance: Staying compliant with anti-money laundering rules and other regulations.

Our team at Yungo Law offers the expertise to tackle these challenges head-on. We provide guidance on compliance, help review contracts, assist with disputes, and ensure you meet all legal requirements. By working with us, you can focus on growing your business while we handle the legal complexities.

Let’s Get Started

Setting up a free zone company in the UAE is a big step, and getting the right support can make all the difference. At Yungo Law, we’re committed to making the process as smooth as possible, helping you avoid pitfalls and maximize opportunities.

 Ready to take your business to the next level? Get in touch today.