UAE: How to set up a free zone business in 6 easy steps

Recently, the country made a host of changes to the Commercial Transactions Law, one of which was to reduce the legal age to establish a business

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by

Meher Dhanjal

Published: Wed 20 Mar 2024, 5:52 PM

Last updated: Thu 23 May 2024, 5:09 PM

The UAE is a magnet for high net worth individuals, investors and businessmen – the ease of setting up businesses, the quick processing time and the laws are among the reasons why people across the globe come to the UAE to do business.

In 2023, the UAE introduced a host of changes in the Commercial Transactions Law, one of the several notable changes was the reduction in the legal age requirement to have a business. The Ministry of Economy changed the minimum age for a business to 18.

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Setting up a business in a UAE Free Zone is considerably easy, and can be done in just six simple steps, according to the UAE's Ministry of Economy. They are:

Step 1: Type of licence

There are several licences that UAE Free Zones can offer, your first step would be to figure out what the nature of your business is and which category it falls under. Here are some of them:

  • Commercial Trade
  • Consultancy Services
  • Industrial
  • Educational
  • Media
  • eCommerce
  • Offshore
  • Freelancer
  • Warehousing
  • Manufacturing
  • Innovation

Step 2: Legal structure

There are three types of legal structures that your company can have. Basis the nature of your business and its requirements, you would have to follow a set of rules and regulations.

There are three legal forms of business in the Emirates, they are:

  • Free Zone Limited Liability Company (FZ LLC)
  • Free Zone Company (FZ Co.)
  • Free Zone Establishment (FZE)

Step 3: Trade name registration

You can apply for a trade name through the Department of Economic Development's app or website.

Keep in mind that a trade name is the name of your company and it cannot be similar to the name of any other registered company. There are some terms and conditions which are as follows:

  1. Your trade name must indicate the legal structure of the company (for example LLC)
  2. it should not be offensive to the general public of or have inappropriate words
  3. It should be compatible with your business/company
  4. The trade name should not have any UAE ruler's name or logo, or any official UAE government logo or the name or logo of any foreign government or government bodies
  5. It should not be registered by another company
  6. The trade name and trademark must be approved by the Department of Economic Development and the Ministry of Economy, respectively
  7. Trade name certificates are subject to renewal

4. Business location

Now, you should choose an appropriate location for your business – there are more than 40 free zones in the country.

For an independent/professional license you can rent an office or register with a virtual office.

Your office space will depend on the number of employees in your company and the nature of your business. You can get a fully-furnished or partially furnished office that can be rented or purchased once you receive your commercial licence. Usually, properties in free zones can be taken on rent.

Free zones also offer several facilities to help investors set up their businesses. These include but are not limited to IT infrastructure, getting NOC letters or ‘To whom it may concern’ letters and issuing, renewing and cancelling residence visas.

Step 5: Receiving initial approval

To receive your initial approval, you must submit all necessary documents and ensure that you have satisfied all the mandatory criteria. Here are some common documents that you will need to prepare:

  • Completed application form
  • Business plan
  • Copy of existing trade license/registration certificate (if applicable)
  • Passport copies of the company’s shareholders and appointed manager
  • Registry Identification Code Form (RIC) for appointed manager (original and notarised)
  • Specimen signatures of the company’s shareholders and appointed manager
  • Title deeds (if applicable)
  • A brief letter clarifying the investment idea and the investor's plan (Letter of Intent)
  • 2 years audited financial reports or certificate of reference from a bank (as required)
  • Documents commonly required for freelancers/professionals
  • Application for registration
  • Curriculum vitae or profile
  • Reference letter from a bank
  • Registry Identification Form (RIC) for Director (original and notarised document)

Step 6: Payment

Finally, you would be required to pay the fees to receive a license for your company. Your fees would also include a company license issuance fees.

You will also be asked for some documents, some of which are listed below:

  • Completed application form for registration
  • Board Resolution appointing Manager/Director (notarised and attested)
  • Power of Attorney given to Manager/Director (notarised and attested)
  • Memorandum and Articles of Association (notarised and attested)
  • Specimen signature of Manager/Director (notarised and attested)
  • Passport-size photos of Manager/Director
  • Share capital information

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Meher Dhanjal

Published: Wed 20 Mar 2024, 5:52 PM

Last updated: Thu 23 May 2024, 5:09 PM

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