Free Zone Company Set Up Dubai

The UAE does not charge income taxes on individuals. It charges a 5 percent value-added Tax on buying goods and services, charged at all points within the supply chain but ultimately paid by the end consumer. Taxation on certain products that are known to be hazardous to the health of people, while corporate taxes are charges on the net income or profit accrued from business corporations and others.

Investing in a new business venture in Dubai is always exciting, and selecting a Free Zone for location provides several benefits. A Free Zone company set up in Dubai allows one to enjoy 100 percent foreign ownership, and streamlined processes that cater to the international entrepreneur.

Key Highlights of Dubai Free Zone Business License

Company registration in any of Dubai's free zones has various benefits. Some are listed below:

• 100% Foreign Ownership: One does not need a local sponsor to have complete control over one's business.

• Tax Benefits: Company tax benefits can go up to 50 years, with no import/export duties and no personal income taxes if you are a citizen of Dubai or you are an outsider and want to establish your business in the country you have to pay some amount.

• Sector-specific free zones: Technology (Dubai Internet City), logistics (Jebel Ali Free Zone), media (Dubai Media City), and so forth.

• Flexible Business Form: It can be formed as FZE if the company has only one shareholder, whereas as FZC if there is more than one.

• Streamlining of Visa process: Free zone companies are allowed to sponsor visas to employees along with their families and hence make relocation easier and their operation from Dubai smoother.

Corporate tax:

UAE Corporate Tax will be effective for entities from the beginning of their first fiscal year which begins on or after 1 June 2023.

Objectives of CT

The introduction of the CT will assist the UAE in:

Strategically preserve its status as a global business and investment hub

Achieve speed in its development and transformation toward strategic goals

Reaffirm its dedication to promoting international standards for tax transparency and to avoid Practices that are considered to have tax effects which distort and mislead'.

Scope

CT will be applicable to all business and individual companies carrying on a business activity with a commercial license in the UAE. Free zone businesses (The UAE CT regime will continue to respect the CT incentives currently accorded free zone businesses, that are in all regulatory compliance, and do not carry out business setup in the mainland of UAE).

Foreign entities and individuals only if they carry on a trade or business in the UAE continuously or regularly

Banking operations: Companies engaged in real estate management, construction, development, agency, and brokerage.

Exemptions from CT

The following are the principles governing the exemptions from corporate tax.

Businesses engaged in extracting natural resources are exempt from CT as such businesses will remain subject to the existing Emirate-level corporate taxation.

Dividends and capital gains made by a UAE business in its qualifying share holdings shall be excluded from CT.

Qualifying intra-group transactions and reorganizations shall be excluded from CT if the necessary conditions are met.

Moreover, CT shall not apply to:

An earnings salary and other employment income received by a natural person both from the private as well as the public sector.

Interest and other income received by a natural person from bank deposits or savings schemes.

Dividend, capital gain, interest, royalty and other investment income of a foreign investor investment by individuals in their name in real estate dividends, capital gain and other income arising from individuals who have an interest or ownership directly or indirectly in shares or securities in their name.

CT Rate

Ministry of Finance states that the CT rates are:

0 percent for taxable income up to AED 375,000

9 percent for taxable income exceeding AED 375,000 and

Another, also still unspecified tax rate will apply to large multinationals if and when they exceed agreed thresholds about 'Pillar two' of the OECD Base Erosion and Profit Shifting Project.

Federal Tax Authority (FTA) will administer, collect and enforce the CT. FTA includes further links and guidance relating to corporate tax and information on how to register for, as well as file under, this tax on their website.

Steps in the Setting Up of Your Free Zone Company

Corpline lets you set up your company in one of the free zones of Dubai without hassle and friction. Here are the basic steps involved:

• Choose the Free Zone: You will need to decide which free zone is appropriate for the kind of activity you want to indulge in. As such, various free zones have been set up in Dubai specifically meant for certain purposes, like Dubai Silicon Oasis, exclusively for setting up any tech business or "Dubai Multi Commodities Centre" for trading commodities.

• Choose Business Activity and License: Commercial, service, or industrial licenses according to the nature of the business.

• Company Structure: Decide whether to structure as a Free Zone Establishment (FZE), Free Zone Company (FZC), or as a branch of an already existing company.

• Submit Documents: Prepare necessary documents like photocopies of passports, visa applications, a business plan, and No Objection Certificates (NOC).

• Occupancy of Free Zone Office: The free zone authority will permit you to lease an office, warehouse or flexi-desk as per your requirements.

• Issue of Business License: Once all formalities are completed the free zone authority will issue a business license for your company.

• Residence Visa and Employee Visas: The free zone authority shall facilitate residence visa and employee visas.

• Opening of Corporate Bank Account: You are free to open a corporate bank account for commencing trade in Dubai.

Conclusion

Corpline can be your go-to partner when planning to establish a whole business setup in Dubai without the hassle of complicated steps in your free zone company. With its easy procedure,tax advantage, and global accessibility, Dubai-free zones show high potential for scale-ups.