Why You Should Not Go Directly to a UAE Free Trade Zone

how do free zones work

When deciding to begin a business venture in the UAE, many factors need to go into consideration. If you are already at the point where you believe that the solution is to establish a UAE Free Trade Zone company and you haven't talked to professionals, you may be making the wrong decision. Why? Many factors could impact where you should set up your enterprise.

 

Is it best to consult directly with a Free Zone? 

The answer is absolutely not. Free Zones sell their product as a service and do not provide clients with advice or options either at the incorporation stage or along the way. They compete between themselves for securing your business and do not advise on structures or other matters that impact your desired result. Their recommendations are limited to selling you their product.

 

How do Free Zones work?

Before we go any further, let’s review how Free Zones in Dubai and the rest of the UAE operate. Businesses in the UAE that operate in a Free Zone adhere to the federal rules in the UAE, but every Free Zone has its own sets of regulations that enterprises must follow. 
 

Why should you open a UAE Free Trade Zone company with help from a service provider?

There are some compelling reasons why you should opt for guidance from experts. 

Here’s a summary of them. 

 

Not all Free Trade Zones in the UAE are created equal

As we have mentioned in previous articles, one of the intricacies to the Free Zone system is that most Free Zones have specific industrial niches and not every Free Zone will offer what you need. If you directly consult the Free Zones, you’re missing out on a significant part of the decision-making process because Emirati corporate law in the Free Zones stipulates that you must have an activity licence that covers your desired activity. Our expertise in the 45 Free Zones in the UAE will give you an upper hand in selecting the jurisdiction that is right for your professional activities and goals. 

 

You need to pick the right UAE Free Trade Zone from the get-go

Another reason why working with a service provider is a worthwhile investment is that the vast majority of Free Zones do not allow you to transfer your domicile. Let’s say you open your advertising firm in a Free Zone in Dubai that does not have a licence for marketing and advertising activities. If you want to switch your company over to another Free Zone, the process is more complicated. You would have to liquidate your currently-existing firm in the first Free Zone and go through the process again. Given the fact that Free Zone companies tend to have hefty capital requirements, it can be an expensive mistake for you to rectify. How can you avoid a situation like this? The best way is to use service providers like us at Europe Emirates Group with our expertise in the inner-workings of the business infrastructure in the UAE. 

 

You may need a registered agent

Some Free Trade Zones in the UAE, like other jurisdictions around the world, can require you to use something known as a Registered Agent. Free Zones that have Registered Agent requirements are RAK ICC and the International Free Zone Authority (IFZA) in Fujairah. That means you cannot go through the company formation process directly and will need a firm to represent you and your interests on your behalf. We are authorised as Registered Agents for some of the most reputed Free Trade Zones in the UAE. 

 

Are you ready to open up your UAE Free Zone company?

If you’re interested in pursuing company formation in a Free Zone in the UAE, our expert team of Free Zone company formation advisors are available and ready to assist you in all 43 Free Zones in the UAE providing qualified and unbiased advice. We ensure that all our clients complete this process with a successful solution that best meets their needs. Don’t hesitate to get in touch with us today. 

 

Written by
Adrian Oton
Adrian Oton
CEO, Europe Emirates Group

 

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