Dubai Auto Zone (DAZ) Company Formation
Dubai Auto Zone overview
Dubai Auto Zone (DAZ) is an automobile industry hub established in 2000 with the goal of facilitating the export of used vehicles to Asia and Africa – particularly to the Middle East and North Africa regions. This free zone serves as a marketplace and accommodates the needs of all the parties of the car import/export business, from car manufacturers and their authorized representatives to those engaged in the purchase and sale of cars, as well as logistics, trading, maintenance, and other services.
Formerly known as Dubai Cars & Automotive Zone (DUCAMZ), Dubai Auto Zone is part of DP World UAE, which is the Dubai-based headquarter division of DP World, a global-scale logistics and port operator. DAZ is run under the management of JAFZA (Jebel Ali Free Zone), DP World’s flagship free zone, and enjoys the same logistical advantages such as close proximity to Dubai seaports and air harbors.
DAZ is located in Ras Al Khor, Dubai. It is the world’s largest free zone catering exclusively to the car industry. Its territory is divided into several market-specific sections, such as the GCC (Gulf Cooperation Council) zone, a retail zone dedicated to the local market, and a special section aimed at attracting Foreign Direct Investments (FDI).
There are over 400 international companies operating in Dubai Auto Zone, including Boeing International Corporation, Emirates Post, and Aramex. The free zone features world-known automobile brands and provides the full spectrum of car-related services, from licensing and customs clearance to retail and shipping.
Dubai Auto Zone facilities
Dubai Auto Zone covers an area of approximately 100 hectares. It features an array of customizable facilities for all types of car-related activities for sale and rent, including:
- Showrooms
- Freehold land lots
- Warehouses
- Offices
- Workshops
All the premises are available in various sizes and layouts. For example, warehouse options include 3,000 sq. ft, 6,000 sq. ft, or even an 11,500 sq. ft combination of a warehouse and a land lot. The free zone hosts branches of government agencies such as Dubai Customs and Dubai Ports Authority. In addition, DAZ offers a range of services including insurance, banking, logistics, car maintenance, and dining.
Dubai Auto Zone company types
DAZ offers several available formation types for establishing a business depending on the preferred number of shareholders and business activities. These company formation options are not subject to any restrictions on foreign ownership.
The company formation types are:
- FZE (Free Zone Establishment) – an LLC with a single shareholder who can be either an individual or non-individual (company).
- FCZO (Free Zone Company) – a free zone LLC formed by multiple shareholders which may include both individuals and non-individuals (companies).
- Branch - a branch opened by a parent company within DAZ with 100% ownership by the parent company and subject to its name and activities. Parent companies can be both foreign and UAE-based.
Dubai Auto Zone business activities
As the name suggests, Dubai Auto Zone is a car-focused free zone, so the list of available business activities mainly falls under this category. However, it also includes other adjacent services. The activity list includes:
- Trading
- Car export/import
- Banking
- Insurance
- Sales
- Repairs
- Maintenance
When it comes to vehicles traded in DAZ, they are divided into 3 groups:
- Left hand drive vehicles intended for sale in the local market and subject to UAE regulations
- Right hand drive vehicles intended for export to African and Asian countries
- The third category includes heavy vehicles, agriculture machinery, bikes, motorcycles, recreational vehicles, and jet skis.
Dubai Auto Zone licenses and costs
As Dubai Auto Zone operates under JAFZA, the license for running a company in DAZ must be obtained from the JAFZA authorities. Depending on the type of your business setup and the preferred business activity, you can choose between the Trading and Service license types.
The Trading license has 2 types based on the number of available activities:
- 1st type: up to 7 activities from the same group
- 2nd type: up to 12 activities from two groups.
The cost of DAZ licenses is similar to those of JAFZA and is quite reasonable compared to other free zones:
- AED 5,500 for Trading license type 1 (7 categories of products)
- AED 9,500 for Trading license type 2 (12 categories of products)
- AED 5,500 for Service license
Dubai Auto Zone company setup
The procedure of setting up a business in DAZ is also administered by JAFZA. The process can be launched without your personal presence, but you will need to visit the free zone once your company’s documents are generated.
The list of necessary documents for Dubai Auto Zone company registration will vary depending on the company type, license, and business activities you choose, so it is advisable to consult with specialists in this field to guide you through this process. The basic requirements are as follows:
- Application form
- Business plan
- Company name registration certificate
- Memorandum of Association (MOA)
- Passport copy
- NOC from a sponsor for UAE visa holders
- Business activity list
The estimated timeframe of Dubai Auto Zone company formation can vary from 5 to 6 weeks – this includes securing a license from the free zone authorities and company registration. Setting up your business also requires having a lease agreement in due time. Obtaining an immigration card and a visa may each take additional 7-10 workdays.
Resident visas
Similar to other Dubai free zones, Dubai Auto Zone provides your business with eligibility for resident visas. Their number is based on your company type and the size of premises you have selected.
DAZ visa costs (AED):
| DAZ fee, AED | Medical checkup, AED | Emirates ID, AED | |
|---|---|---|---|
| Owner | 4,000 | 752.50 | 390 |
| Employee | 4,000 | 752.50 | 390 |
The visas are valid for 2 years.
Health insurance is required in this free zone. The cheapest package you can get is 600-800 AED. Health insurance needs to be renewed annually.
DAZ company renewal
In order to execute company renewal, you need to pay:
- License fees
- Office (facility) fees
- Establishment card costs
The renewal of a Dubai Auto Zone license costs the same as DAZ company registration, which is AED 5,000.
The company renewal can be done without your personal visit to Dubai Auto Zone.
You need to provide your company’s audit report at the time of company renewal. The audit can be done through any UAE-licensed and accredited auditing company.
Corporate amendments
Your company can be amended at any time. The most frequently requested amendments include the following changes:
- Shareholders/managers
- Company name
- Business activity
- Office facility
Personal presence of the shareholder or manager is required for the application for the amendments.
Business liquidation
The liquidation procedure requires the personal presence of the owner or it can be done by the Power of Attorney holder.
Dubai Auto Zone will request you to return the original documents and pay the liquidation fee. The license cancellation fee will be around 2,000 AED.
The company closure will take approximately 1 month. The DAZ company register will provide you with a certificate of liquidation upon completion of the procedure.
Opinion
Naturally, Dubai Auto Zone can be recommended to those seeking to establish a car-related business in Dubai. The free zone’s location is strategic, and its direct adherence to JAFZA allows for excellent logistics and networking options. As the world's top free zone dedicated to the automotive industry, DAZ and its hosted companies boast numerous capabilities due to the ever-growing car markets of African and Asian countries.
Although the company setup process takes longer compared to other free zones, Dubai Auto Zone offers quite reasonable setup costs, which is very beneficial with regard to the number of advantages it provides to automobile-focused entrepreneurs and investors. It is a unique free zone with unique opportunities for business in the face of the rapidly expanding car industry and markets.
Benefits of Dubai Auto Zone company
- Focus on automotive industry providing advantages to field-specific businesses
- Close proximity to Dubai seaports, airports, and highways with many logistics options
- Full foreign ownership
- Direct adherence to DP World UAE and JAFZA
- 100% repatriation of capital and profits
- No currency restrictions
- Access to different markets via market-specific zones
- No import/export duties
- Customs, port, and maritime authorities within the free zone
- No restrictions on the number of imported vehicles
Start your business in DAZ today
Licence costs in Dubai Auto Zone
Number of visas depends on office size
| LICENSE TYPE | VISAS INCLUDED | TOTAL COST | |
|---|---|---|---|
| Service license | 1 visa | AED 5,500 $1,497 | |
| Trading license type 1 | 1 visa | AED 5,500 $1,497 | |
| Trading license type 2 | 1 visa | AED 9,000 $2,450 |
Documents for Dubai Auto Zone setup
DOCUMENTS
PROCEDURE
Individual shareholder
- Passport
- Latest utility bill as address proof
- Passport-size photo
- NOC from sponsor for UAE visa holders
- Description of business
- 1 day- Company name and activity approval
- 1 week- Pre-approval
- 1 time- Visit JAFZA for document signing
- 1 week- Company establishing
- 1 week- Establishment card
- 2-3 days- Entry permit
- 1 day- Medical checkup and Emirates ID
Top 10 questions about Hamriyah free zone company
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Can I open a bank account remotely?
No, a personal visit to the UAE is required as per the regulations of the UAE Central Bank. Local banks require this visit to verify the client's identity.
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Do banks give debit and credit cards or loans?
In most cases, you can obtain a debit card for your newly opened company, especially if there is only one shareholder. However, a credit card is usually issued against a fixed deposit. As for loans, banks may consider your eligibility based on your company's operations and profits. It is recommended to apply for a loan after at least one year of company operations.
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Can a free zone company have offices outside the free zone?
Officially, the office of a free zone company should be located within the free zone where it is registered. However, if you need an office in Dubai, you have the option to rent space in a Business Center and use it on a flexible basis. It is important to note that the minimum required space (flexi desk) in the free zone cannot be canceled.
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Why do I need a flexi desk or office?
A flexi desk is a mandatory requirement for any company eligible for resident visas. It serves as the minimum physical office space that a company with individuals under its visa must have. Additionally, a flexi desk can facilitate bank account opening as banks require evidence of a company having some form of office or physical presence.
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Do free zone companies need to pay VAT?
VAT obligations depend not only on the place of registration but also on where the business activities take place. VAT becomes applicable when the taxable turnover reaches AED 375,000. If a free zone company's trading activities take place abroad, the turnover is not considered taxable as long as the transactions occur outside the UAE. However, if goods are imported to the UAE, VAT at a rate of 5% must be added to invoices and paid.
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Are there any other taxes to be paid?
The UAE is free from income tax. However, there is a 5% import tax on goods brought into the country and a 5% VAT on trading or service transactions that occur within the UAE.
On June 1, 2023, the UAE introduced 9% corporate tax, however, companies registered in UAE free zones are exempt from this tax if they do not make profits from activities on the UAE mainland or this profit is less than AED 375,000 per year. Branches of companies registered in free zones and carrying out activities on the mainland will be taxed at the mainland rate.
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Why would a free zone company be better for me than an offshore or mainland entity?
The suitability of a free zone company versus an offshore or mainland entity depends on your business model and requirements. However, a free zone setup offers advantages such as 100% foreign ownership, eligibility for resident visas, the ability to conduct business both within and outside the UAE, and greater favorability with banks compared to offshore companies. Additionally, free zones often offer flexi desk spaces instead of executive offices, making it a cost-effective way to start a business without unnecessary obligations.
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Can you guarantee the opening of a bank account?
While we strive to make the account opening process as smooth as possible, we cannot guarantee the approval as it ultimately depends on the bank. Each case goes through several bank departments for approval, and the bank may contact you directly for clarifications. Providing a clear picture of your business to the bank increases the chances of successful account opening. We do our best to prepare you and your company for a smooth and fast account opening process.
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When and how should I renew my company? How much does it cost?
Your company should be renewed annually, and the cost is typically lower than the initial setup cost. The renewal fees depend on your company package, and you can obtain the price by downloading the Estimate from our website. Company renewal does not require the personal presence of the owner and can be done by your agent. After renewal, the new license must be presented to the bank to extend the bank account, which is included in our renewal service.
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How can I pay the fees?
You have multiple options for fee payment. You can make payments via bank transfer, cash, or online using a card.
How can we contact you?