Setting up a business in the UAE or other states is a daunting task. However, during the past few years, UAE has opened several free-zone areas to help and encourage foreign investors, consultants, small businesses, and even freelancers. Even with multiple benefits, there are lots of things you should consider before setting up a business in the UAE free-zone.
Here I am going to share some important questions; you must ask before starting a business setup in Dubai.
What is the cost of establishing the business in the UAE free-zone?
Mostly, people say that you can set up a free-zone company at a low cost, but in reality, there are several other important compulsory expenses you have to bear such as:
- Registration expenses
- Trade name reservation expenses
- Trade license fees
- Rental expenses
- Visas and other auxiliary expenses
So it may cost you 30000 AED for setting up a Company in UAE free-zones, which seems too high.
What is the cost of a trade license?
When you set up a business for free-zone, you need to get a trade license to run the business there. The cost of a trade license depends on the business activity of your company. However, it may cost you 10000 AED to 2000 AED per annum. Free-zone authorities also allow you to choose 2 to 10 business activities at once.
What are the benefits of setting up a Company in free-zones?
Most people are not aware of the benefits of a Dubai company formation. However, there are plenty of benefits of setting up a business in a free-zone such as
- You have 100% ownership and enjoy 100% of profits.
- You can transfer 100% capital and profits outside.
- You have an exemption from import and export duties.
- You don’t have to pay corporate or personal income tax.
Do you need to set up a company bank account?
Generally, most companies require a bank account number before applying for a trade license. But some bank does not open a bank account until they see the copy of trade license. Therefore, to avoid such problems setting up a Company in a free-zone is a wise decision
Do you need a local partner?
One of the best things about doing business in a free-zone is you do not have to find a local partner for registration. You are your boss and responsible for everything.