free trade zones - u.a.e

HEDGE-SQUARE CONSULTANCY SERVICES PRIVATE LIMITED

1

25.03.2012

ENTITIES – FREE TRADE ZONES – U.A.E

Notes:

1. This note only contains a brief summary of the types FTZs in UAE.

2. The template covers the information about the 4 popular FTZs. Requirements are more or less

same in other FTZs.

The United Arab Emirates (UAE) consists of seven

monarchies (states) viz. Abu Dhabi, Ajman, Dubai, Fujairah,

Ras Al‐Khaimah, Sharjah, and Umm al‐Qaiwain. Dubai is

regarded as the centre of Finance, commerce and tourism.

Abu Dhabi is known for its highest share of oil production

and hence takes a leading role in political and economic

decision‐making. Free Trade Zones (FTZs) offer

opportunities for 100 Percent foreign investment and

regarded as tax heavens. FTZs plays very important role in

diversify the economy of UAE. The economy of UAE is

based on industry, which accounts for maximum of real

growth rate GDP of the UAE, which was 3.3% in 2011.

(Source: Central Intelligence Agency).

FTZs in UAE have always been keen to assist investors. They are notified areas, where special laws

operated with regard to ownership, taxation, recruitment of labour, value addition and income

repatriation. In gearing globalization, free zones are highly recognised as the preferred areas for

investment as they offer most cost effective mix of factors of production, transportation and

distribution, in addition to benefits numerated earlier. Following are some highlights on initial

requirements to start business in Free Trade Zones.

I. Company

1.1 As states above, 100% foreign investment is allowed in all the FTZs but the Company

must obtain Trade license from the respective Zone.


2

1.2 Shareholders

a) Airport Free Trade Zone

• Free Zone Establishment ‐ Minimum one shareholder is required.

Shareholder can be of any nationality and may be either an individual

or the Company.

• Free Zone Company ‐ Minimum Two shareholders are required and

number of them should not exceed Five. They can be of any

nationality and either individuals or the Companies or both.

b) Dubai Internet City

• Free Zone Limited Liability Company – Minimum one shareholder is

required and number of them should not exceed fifty. They can be of

any nationality and may be individuals or the Companies or both.

c) Jebel Ali Free Zone

• Free Zone Establishment ‐ Minimum one shareholder is required to

start the Establishment. There no nationality requirements and

shareholders can be individual or can be corporate.

• Free Zone Company ‐ Minimum Two shareholders are required and

number of them should not exceed Five. There are no nationality

requirements and even corporate can be shareholders in the

Company.

d) RAK

• Free Zone Establishment ‐ Minimum requirement is one shareholder.

There are no nationality requirements. The shareholder might be

either an Individual or the Company

• Free Zone Company – Company should have atlest two shareholders

whereas the number of shareholders should not exceed Five. Alike

other free zones there are no nationality requirements. Even

corporate can be the shareholders in the Company.

1.4 Directors


• Free Zone Company ‐ Minimum One Manager (any nationality)


3


• Free Zone Limited Liability Company – Minimum one Director and

Manager – any nationality (Both can be the same person)


• Free Zone Company ‐ Minimum 2 Directors and 1 Secretary (although

a person may hold both the offices of director and secretary within a

company simultaneously). These individuals must be resident in

Dubai.

d) RAK

• Free Zone Limited Liability Company – Minimum one Director and

Secretary (although a same person may hold both the offices of

director and secretary within a Company simultaneously) – any

nationality.

1.5 Capital


• Free Zone Establishment ‐ Minimum Capital is AED 1 million

• Free Zone Company ‐ Minimum Capital is AED 500,000


• Free Zone Limited Liability Company ‐ AED 50,000/‐ (each share value

is AED 1000/‐)


• Jebel Ali Free Zone Establishment ‐ Minimum Capital is AED 1 million

• Jebel Ali Free Zone Company ‐ Minimum Capital is AED 500,000 (Value

of each share – 1,00,000)

d) RAK

• It varies as per license (some talks of amendments are going on)

1.6 Every business setup must obtain an office on lease from the respective FTZs. The

offices available vary in sizes. The sponsor visas for employees are allotted on the

basis of office size viz. in case of DIC 3 visas are granted for executive office and for 9

visas are granted for commercial office.


4

II. Branch Office

2.1 100% foreign investment is allowed in all three Free trade Zones and Company’s

need to obtain Trade License from the respective Zone.

2.3 There is no minimum capital requirement for all three Free trade Zones in case of

branch registration.

2.4 Minimum one Branch Manager of any nationality is required, for all three Free trade

Zone

2.5 Every business setup must obtain an office on lease from the respective FTZs. The

offices available vary in sizes. The sponsor visas for employees are allotted on the

basis of office size viz. in case of DIC 3 visas are granted for executive office and for 9

visas are granted for commercial office.

2.6 There are other criteria’s which vary from one Free Trade Zone to anther one.

Hemant Shah Hedge‐Square Consultancy Services Pvt. Ltd. 111A, Impress, Currimji Compound, Fort, Mumbai – 400 001. Contact: +91 ‐ 9870551611 Email: hemant@hedge‐square.com Website: www.hedge.square.com This material and the information contained herein prepared by Hedge‐Square Consultancy Services Pvt. Ltd. (HSQ), is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). None of HSQ’s partners or their related entities is, by means of this material, rendering professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. No entity in the HSQ Network shall be responsible for any loss whatsoever sustained by any person who relies on this material. © 2011 Hedge‐Square Consultancy Services Pvt. Ltd.

free trade zones - u.a.e

Economy & Finance