Dubai Start Up

Dubai Start up

One of the ongoing trends of recent years is to move the existing business to the UAE or establish it in the GCC region. The favorable economic climate inevitably leads promising foreign investors towards prosperity, offering immense opportunities to establish and expand their business.

How to incorporate your business in the UAE?

Naturally, a sustainable business model starts with the company formation in the UAE whether it is a brand-new company or a branch of the existing parent company. The process of starting a business in the UAE has been significantly facilitated by government incentives. One of the forms of these incentives is free zones. Each of them offers numerous advantages to the investor depending on the sector the zone represents.

What are the perks of incorporating your business in the free zone?

A foreign investor outside the free zone is required to have a local partner who owns 51% ownership of the business in case the company does trading activity or provides community services. Once such enterprise has entered the free zone, the foreign investor is entitled to a 100% ownership.

The tax benefit represents another good advantage. To be specific, once you are inside the free zone, you pay neither income nor corporate tax. However, all of the UAE has been declared free from income taxes.

VAT in the UAE is 5% and that is another incentive to set up your company here since it is rather low in comparison to other countries. In some free zones, the residents don't need to pay VAT at all depending on the business model. On top of that, the export and import duty exemption make free zone even more attractive.

Apart from the tax benefits and ownership control, each free zone provides expertise in specific operations depending on the sector. Thus, once an investor enters the free zone, there is access to the hub of knowledge and experience that is crucial once the enterprise has been established. Some free zones possess the needed expertise in manufacturing, others specialize in logistics, etc.

How to select the free zone?

The requirements and peculiarities might vary from one zone to another: share capital amount requirements, physical office presence, audit procedure. That is why the question which free zone to choose may seem confusing.

The investors might turn to business setup consultants in Dubai or any other emirate to clarify the procedure. These consultants offer their services to assist in finding the cheapest company formation in the UAE or advise on the formation that suits your enterprise the most. Precisely, they help to decide on the company type, get the license, open an onshore or offshore bank account and facilitate the visa processing.

If the entrepreneur plans to go for the e-commerce setup, he or she needs to consider several critical points as well. The E-commerce sector has experienced an exponential rise in the region. The potential of the market due to the population diversity in the region boosts e-commerce growth. However, the UAE authorities do not permit any random person to create an e-commerce website and start a business activity online.

Before offering the product or service online, the entrepreneur has to obtain the e-commerce license: a mainland license obliges the foreign investor to work with a local distributor, while a free zone license allows offering the goods or services directly to the market. As follows, the entrepreneur needs to decide which license would be more suitable for his e-commerce business.

All in all, the fertile business ground and the government incentives have made the UAE one of the most vibrant and flourishing places to invest in. If you plan to establish an enterprise there, you need to go deeper into the specifics of venture establishment.

You can always get advice from the specialized business setup consultants on the advantages of being outside and inside the free zone depending on the type your enterprise. Considering the upward market trend, now it is time to get informed more than ever.

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