Free Zone Companies

Free Zone Companies

A distinctive feature of Free Economic Zones is the special conditions for registering and conducting business within them. Such Zones are located on the territory of many Emirates. Businessman can choose any of FEZ, depending on the chosen field of activity.

If a foreign investor registers the company in the FEZ, then he has the right to own a 100% stake in the company. This fact plays a very important role in registering a business for foreign investors because, by registering a local company outside the Free Economic Zone, a foreigner has the right to own a maximum of 49% of shares, and citizens of the United Arab Emirates (local sponsor) owns at least 51%.

In accordance with the Federal Constitution of the UAE, all Emirates can create Free Zones for commercial or general purposes. Management and supervision of such Zones is carried out by the jurisdiction of the Emirate, in which the FEZ is located. Free Economic Zones are created to increase the flow of foreign investment in the United Arab Emirates.

Currently, there are 2 types of Free Economic Zones:

   1 - Zones engaged only in financial activities, these zones are called financial.

    2 - Sectoral zones are free trade zones.

As for the financial Zones, there are only 2 of them in the UAE, in Abu Dhabi and Dubai. There are more than 50 FEZ in the territory of all 7 Emirates. A large proportion of all FEZ are in Dubai.

Own rules and laws apply inside Free Zones. Each Zone has the right to adopt its own laws, acts and regulations. For example, the Free Zone “DIFC” created its own labor, corporate and contractual laws, but they did not stop there and developed a judicial system specifically for themselves.

Registration of a company in the FEZ carries tax benefits in the form of a complete absence of corporate tax and capital control, as well as complete freedom to repatriate the currency. This is a great starting advantage for any company.

From the nuances, you should understand that the type of activity is limited by the license that you received when registering the company. It is impossible from the sale of carpets to abruptly switch to mobile phones. Conducting activities is permitted only within the FEZ in which the company is registered, or outside the territory of the UAE. A company in the FEZ is suitable for international activities.

If you plan to open a company in the UAE and have any questions, then you can contact our specialists, who will be happy to provide professional advice.