The UAE had a requirement that UAE nationals hold at least 51% of a company’s shares until the Foreign Direct Investment Law was introduced in late 2018. Due to the resulting economic development, free zones were formed in order to attract foreign firms to the region who desired to maintain complete control over their operations.
What does it mean to be in a “free zone”?
Free zones are physically defined regions that allow 100% foreign ownership and are usually dedicated to a particular sector. Many were developed with public funds and feature cutting-edge facilities to promote strategic change in important industries (such as banking). There is infrastructure and licences tailored to the media sector in Dubai Media City, a free zone in the emirate of Dubai. It’s no different for enterprises in the financial services sector looking to expand their international customer base in Dubai International Financial Centre.
Advantages of Free Zones
UAE free zones have made the country an appealing choice for international companies wanting to move or extend their worldwide presence, with the help of Creative Zone. Doing business in a UAE free zone has some advantages, including:
- The company has 100 per cent foreign ownership.
- The use of top-notch logistical resources
- A vast and diverse pool of highly qualified experts is readily available.
- Advantages of concentrating economies of scale (given the zones dedicated to industries)
- All free zones make it simple to find and hire international personnel. offering work visa services at a single location
- Guaranteed tax breaks for 15 or 50 years
- Exemption from all import and export taxes in full
- Return of all money and income to home country
- 50-year period during which corporations are free from paying taxes
- Certificate of Tax Residency Qualifying Status in the United Arab Emirates
Therefore, each free zone has its own set of unique criteria involving minimum capital requirements, office or warehouse space, and authorised operations; each must also have the appropriate licences and legislation in place to ensure that their designated industry may grow.