Use This Structure to Cut Your Business and Personal Taxes to Zero in One Move
UAE free zone companies are useful corporate entities. The main benefits are tax-free trading outside the UAE and the path to a residence permit in the UAE. A residence permit in the UAE means that you have the right to live in the tax haven country.
About The United Arab Emirates (UAE)
The United Arab Emirates (UAE) is a country located in the eastern Arabian Peninsula. It is bordered by Saudi Arabia to the south and west, and Oman to the east and north. The UAE is composed of seven emirates: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah. Abu Dhabi is the capital and largest city of the UAE.
The UAE has a varied landscape, with desert, coastal, and mountain regions. The country has a hot and arid climate, with temperatures often reaching above 40 degrees Celsius (104 degrees Fahrenheit) in the summer months.
The history of the UAE can be traced back to the pre-Islamic era, when the region was known for its trade and commerce. In the 20th century, the discovery of oil in the region led to rapid economic development and the formation of the UAE as a modern nation. The UAE gained independence from Britain in 1971 and has since become a major economic and cultural hub in the Middle East.
The population of the UAE is approximately 9.9 million, with about 85% being expatriates from various countries around the world. The official language of the UAE is Arabic, but English is widely spoken and used in business and education. The UAE is a diverse and multicultural society, with a mix of different nationalities, cultures, and religions.
UAE Free Zone Companies
Free zones are special economic areas in the United Arab Emirates (UAE) that offer tax-free and regulatory-free environments for businesses. They are designed to attract foreign investment and encourage the growth of specific industries. There are more than 40 free zones in the UAE. Each has its own set of rules and regulations.
UAE free zone companies are restricted to operating within the free trade zone in which they are located. However, they are allowed to sell their products and services to the local market and to other countries.
There are several benefits to setting up UAE free zone companies, including:
- 100% foreign ownership: Free zone companies can be 100% owned by foreign investors, with no requirement for a local partner.
- Tax exemptions: Free zone companies are exempt from corporate and personal income taxes, as well as import and export duties.
- Regulatory freedom: Free zones have their own regulatory frameworks, which can be more flexible and business-friendly than those in other parts of the UAE.
- Access to global markets: The UAE’s strategic location makes it an ideal gateway to the Middle East, Africa, and South Asia. Free zone companies can take advantage of this location to access these markets.
- Quality infrastructure: Free zones in the UAE have modern infrastructure and facilities, including offices, warehouses, and manufacturing units.
UAE free zone companies are suitable for a variety of sectors, including manufacturing, logistics, technology, consulting, and healthcare.
Steps to Set Up a UAE Free Zone Company
Get Approved by a Free Zone
You first must decide on which free zone you want to incorporate in. There are 45 free zones in the UAE. Your business must be physically based in the free zone you select. You then must apply for a business license in that zone. The type of license you need will depend on whether you’re offering business services or you have a trading or manufacturing business.
Decide on Your Corporate Structure
You can choose to set up a new company or register a branch of a foreign company. In some cases it may be more beneficial to open a branch of an existing foreign company as it’s easier to get a business license.
Prepare Incorporation Documents
Documents are prepared for approval by the free zone authorities. You’ll be asked to provide the business name you want and asked for identification documents such as a passport at this stage. In some free zones you’ll be asked for a CV and details of your business experience. You can provide 3 choices of company name. You’ll then get preliminary approval for the business license and incorporation.
You’ll be required to meet with a free zone official by video call. They’ll want to verify your documents and identity before final approval. Sometimes this can be avoided by giving your local representative a power of attorney to handle it for you.
All free zone companies are required to have business premises. You’ll have to sign a lease for a minimum of one year. The business license will be issued to the address on your tenancy contract.
UAE Free Zone Companies Documents Issued
The business license and incorporation certificate will then be issued and you’ll be able to start trading in the UAE. As an employee of the company you’ll be eligible for a 3 year resident visa to live in the UAE.
UAE free zone companies will provide you with both a tax free corporate entity and a tax free residency. This can be done at a low cost and be a key part of your plan B. Anyone operating a business onshore can potentially move it to the UAE. There’s a good choice of banks and financial service providers there too. It can be a neat solution for anyone with a business that’s not location dependent. Using this structure you can cut your business and personal tax rate to zero instantly.