Dubai free zone company business registration

JAFZA company formation

verified by : Andrey Ovchinnikov

09 Jan 2024

JAFZA free zone overview

Jebel Ali Free Zone (JAFZA) is the oldest free zone of the UAE. It was founded in 1985 and is currently the largest free zone in Dubai.

It has become home to more than 9,500 international and local companies including factories and logistics firms, manufacturing plants and assembling units, and the overall annual trade value generated by these companies exceeds $100 billion.

Jebel Ali Free Zone has direct access to Jebel Ali Sea Port (Port Jebel Ali) and Al Maktoum International Airport (also known as Dubai World Central). JAFZA is also the primary free zone of DP World, one of the world’s major logistics companies and port operators.

It has a single customs area, which helps to reduce cargo clearance time and costs.

Shipping, logistics, and trading companies are often based in this free zone. If you are intending to implement such a business setup in Dubai, JAFZA has a lot to offer:

Logistic Corridor

  • By sea: Port Jebel Ali has one of the best global ocean connectivities. It serves over 150 shipping lines that are capable of handling over 19 million containers per year.     
  • By air: Al Maktoum International Airport is considered to be one of the largest cargo airports around the globe. 
  • By land: The UAE region is fully equipped with an extensive highway link. It makes the cargo travel fast and safely in Dubai and between the emirates. 
  • By Rail: Etihad Rail, UAE’s national rail project, is currently under construction. Once completed, its second stage is going to link JAFZA to the entire Arabian Peninsula. 

Facilities

Jebel Ali Free Zone has a vast portfolio of facilities:

  • Flexi-desks
  • Plots of land
  • Warehouses
  • Showrooms
  • Customized development solutions
  • Offices
  • Business park
  • Retail outlets
  • On-site residence

Note that it is difficult to get a flexi-desk for Jebel Ali Free Zone company setup due to their low availability. If you are planning to start your business here, you should consider an office space right away.

JAFZA company types

JAFZA provides its clients with five available company types based on the preferred number of shareholders with an array of various license types and activities to choose from. JAFZA company formation options are not subject to any restrictions on foreign ownership.

The company formation types are:

  1. FCZO (Free Zone Company). It is basically a free zone LLC formed by multiple shareholders which may include both individuals and non-individuals (companies).
  2. FZE (Free Zone Establishment). It is an LLC with a single shareholder who can be either an individual or non-individual (company).
  3. PLC (Public Listed Company). This is an entity type that resembles an LLC with two or more shareholders and a public offering of its shares on the stock exchange market.
  4. Branch. As the name suggests, it is a branch opened by a parent company within JAFZA with 100% ownership by the parent company and subject to its name and activities.
  5. Offshore company. This legal entity type is aimed at conducting business outside of the company’s location or registered jurisdiction. It has to have at least one shareholder with no limit to their maximum number and may include both individuals and non-individuals (companies).

JAFZA licenses and activities

According to the type of your business setup in UAE, the category of your license can be different.

The list of activities is quite vast, the following license categories are offered:

  • Trading
  • Industrial
  • Service
  • Logistics
  • E-Commerce
  • General Trading

Companies with a service activity can be registered only as a branch of an existing UAE Mainland entity.

Service and Trading licenses have 2 and 3 types respectively. They differ depending on the number of activities you can have under the license:

1st type: up to 7 activities from the same group

2nd type: up to 12 activities from two or more groups.

3rd type: no restrictions on the number of activities from 3 or more groups.

Type 3 license in Trading essentially constitutes the General Trading license.

If you want to add an extra activity to any type of license, it will cost 500 AED.

JAFZA company formation is highly recommended for those who are planning to deal with international trading, distribution, or logistics sectors.

JAFZA license costs

The cost of a company setup in Jebel Ali Free Zone is quite reasonable compared to the other free zones.

Company registration costs in Jebel Ali Free Zone start from:

  • 5,000 AED for registration fee
  • 5,500 AED for type 1 license (7 categories of products)
  • 9,000 AED for type 2 license (12 categories of products)

As you can see, JAFZA free zone license cost is reasonable, considering the big number of activities you can get in the license.

It is a mandatory requirement to have a premise in this free zone. One of the smallest available offices is 26.88 sq. m with an annual rent of 53,670 AED. However, the Industrial license also mandates having a warehouse and a production plant inside JAFZA.

The cheapest company setup package in JAFZA will cost about 52,636 AED, including a flexi-desk and a resident visa. Apart from the above-mentioned costs, it includes name approval fees, attestation of documents costs, establishment card fee, and several others.

How to start business

JAFZA company setup can be started without your presence, but you will need to make a visit to the free zone when the documents of your company are generated.

Here is the list of basic documents for JAFZA company registration:

  • Application form
  • Brief project summary (1 page is sufficient)
  • Passport copy
  • Company name options
  • Business activities

The timeframe of Jebel Ali free zone company setup can vary from 3 to 14 work days starting from the date of submission of all the required documents. It depends on the business activity and the type of facility that you choose. Note that it is required to have a lease agreement in time for company setup.

UAE Residence visas in Jebel Ali

Just like any other Dubai free zone, Jebel Ali Free Zone makes your company eligible for resident visas.

You will be entitled to 1 resident visa per every 10 sq. m of the office space you have got.

JAFZA visa costs (AED):

  JAFZA costs, AED Medical check, 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.

Business renewal

In order to execute company renewal, you need to pay:

  • License fees
  • Office (facility) fees
  • Establishment card costs

Renewal of Jebel Ali Free Zone license costs the same as JAFZA company registration.

The company renewal can be done without visiting Jebel Ali Free Zone.

You need to provide your company’s audit report at the time of company renewal. Audit can be done through any UAE licensed and accredited auditing company.

License can be renewed for three years for companies having a plot of land and a sublease facility.

Corporate amendments

Most amendments of your JAFZA company can be processed without a personal visit to the free zone.

Such amendments include:

  • Change of name (personal and corporate)
  • Business activity
  • Change of manager/director, etc.

For shares transfer procedure, you will be required to visit the free zone. Otherwise it can be done by a person holding a notarized Power of Attorney.

License cancellation

The liquidation procedure requires personal presence of the owner or it can be done by Power of Attorney holder.

The free zone will request you to return the original documents and pay the liquidation fee. License cancellation fee will be around 2,000 AED.

The company closure will take approximately 1 month. JAFZA company register will provide you a certificate of liquidation upon completion of the procedure.

Opinion

Jebel Ali Free Zone can be suitable for the following setups:

  • International trading
  • Importing and exporting
  • Distributing and logistics
  • Manufacturing

The price of the company formation in Jebel Ali Free Zone might seem higher than in other zones, but JAFZA is a prestigious place to be and has all possible types of facilities.

Company formation in Dubai Airport Free Zone can compete with it to some extent. In that case, the sea port will be substituted by an airport.

Another biggest free zone after JAFZA is Sharjah Airport International Free Zone, and we can recommend registration options over there.

Benefits of JAFZA company

  • Big choice of trading activities, up to 12 product categories per license
  • Biggest UAE sea port within the Free Zone
  • Warehouses and plots of land
  • Retail locations outside of the Free Zone for JAFZA licenses
  • The oldest and the biggest Free Zone of UAE - highly recognized and reputable
  • Favoured by local banks - quicker account opening process

Start your business in JAFZA today

TRADING LICENCE COSTS IN JEBEL ALI FREE ZONE

Number of visas depends on office size

LICENSE TYPE VISAS INCLUDED TOTAL COST
Trading license + office no visas AED 86,935 $23,850 download breakdown
Trading license + office 1 visa AED 90,960 $24,950 download breakdown
Trading license + office 2 visas AED 94,986 $26,050 download breakdown
Trading license + office 3 visas AED 99,011 $27,150 download breakdown

General trading license costs in Jebel Ali free zone

Number of visas depends on office size

LICENSE TYPE VISAS INCLUDED TOTAL COST
General Trading license + office no visas AED 120,204 $32,950 download breakdown
General Trading license + office 1 visa AED 115,460 $31,650 download breakdown
General Trading license + office 2 visas AED 119,486 $32,750 download breakdown
General Trading license + office 3 visas AED 123,011 $36,219 download breakdown

Documents for Jebel Ali free 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 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 Check-Up and Emirates ID (has to be done inside JAFZA)
  • 1 week- Visa stamping

Top 10 questions about Jebel Ali Free Zone company

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

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