Which UAE free zone should you set up in?
The UAE’s SME sector is thriving.
According to
data from the UAE’s Ministry of Economy,
these businesses contribute to between 40 to 46 percent of nominal
GDP in Dubai alone, and more than 60 percent of the UAE’s
GDP.
Considering they also provide around 86 percent
of all private sector employment, it’s hardly surprising that SMEs
are big business in the country, particularly for free zones. But
for those starting out, which free zones are the most suitable out
of the 36
currently in existence?
We went searching for the most competitive
deals.
Dubai Multi Commodities
Centre (DMCC)
Where? Dubai
Founded in 2002, Dubai Multi Commodities
Centre is arguably one of the UAE’s best-known
free zones, not to mention one of the most recognized at the
moment. In 2014, it was named the Middle East’s best free zone
by FDI
Intelligence, and last year it picked up the same
accolade. But that’s not all; DMCC was also crowned the best free
zone in the world for 2015. As of the latest
figures available, DMCC – which is based in the
Jumeirah Lake Towers area – is home to an estimated 10,000
companies and more than 85,000 employees, with 70 percent of
tenants being SMEs.
Best for? Any type of business.
DMCC hosts a variety of companies, including InfoPod, RAB
Entertainment and Scafa
Culinary and Finishing Arts Training School.
Benefits: All free zones offer
100 percent foreign ownership and full capital repatriation. DMCC
also offers efficient set up, plus access to an eclectic community
of startups, SMEs and bigger corporations. Training sessions and
networking events are offered from time to time.
Starting costs: from 55,940 UAE
dirhams (US$15,250), plus capital.
According to DMCC’s latest price
list, initial startup costs include an annual
license fee of 20,010 dirhams, plus a flexi-desk lease of 17,610
dirhams. One-off charges include pre-approval (1,000 dirhams),
registration (9,010 dirhams) and a memorandum of association of
2,010 dirhams. Residence visa (per person) is 3,300 dirhams, which
is payable every three years. A 3,000 dirhams refundable deposit is
also required. Also worth noting is that the minimum capital
required to be shown in your business’s bank account is 50,000
dirhams.
For startups Astrolabs Dubai
promises discounts of up to 35,000 dirhams if you apply
through them.
Where? Abu Dhabi
Established in 2006, Abu Dhabi’s Masdar free zone
focuses on enterprises that have some connection to the renewable
energy or sustainable technology industries. It’s a wholly owned
subsidiary of the government-owned Mubadala Development
Company.
Best for? Businesses
specializing in or that incorporate an element of renewable energy,
clean tech, human resources development, healthcare or community
services. Masdar Free Zone companies include Gulf
Green Environmental, Sener
and Abengoa
Solar.
Benefits: 100 percent foreign
ownership; quick and easy set-up with a ‘One-Stop Shop’ for all
processes; company facilities that promote sustainability, plus
close proximity to Abu Dhabi International Airport, which is useful
for those who need to travel a lot for work.
Starting costs: from 26,800 dirhams
(US$7,300).
According to Masdar’s latest
price list, the initial startup costs include an
annual license fee of 10,000 dirhams plus a flexi-desk lease of
13,500 dirhams. Residence visa (per person) starts from 3,300
dirhams, which is payable every three years. Other charges may
apply.
Where? Abu Dhabi
Named after the geographical co-ordinates of the
UAE capital, TwoFour54 has
positioned itself as a center for media and entertainment content
creation.
Best for? Unsurprisingly,
companies that specialize content production – film, television,
radio, mobile, digital media, music, events, animation, gaming and
publishing – plus events and festivals, and PR and marketing.
Notable TwoFour54 companies include Akthaboot, Analog
Media and Flat6Labs.
Benefits: 100 percent company
ownership; 30 percent cash rebate on international film and TV
production spend; no minimum share capital requirements; no
security deposit per employee visa required; plenty of training
opportunities; plus access to state-of-the-art studio production
and post-production facilities.
Starting costs: from 47,050
dirhams (US$12,820).
Inquiring about a small content company, we were
told that initial startup costs include an annual license fee of
10,000 dirhams plus a registration fee of 2,500 dirhams, PO Box
registration of 1,250 dirhams and 3,300 dirhams per visa. A
flexi-desk lease in the first year in 30,000 dirhams, and is only
renewed the following year subject to approval.
Want to freelance instead? It’s
worth noting that TwoFour54 offers a brilliant freelancer license
option starting from 1,250 dirhams for six months or 2,500 dirhams
for 12 months. Visa sponsorship fee for non-GCC nationals is
approximately 3,300 dirhams.
Where? Ras Al
Khaimah
Established in 2000, RAK FTZ hosts more than
8,600 companies that represent over 50 industry sectors.
Best for? Any type of business.
RAK FTZ is home to four zones: Business Park (for corporate and
business offices), Industrial Park (for industrial and heavy
manufacturing), Technology Park (for trading and light
manufacturing) and Academic Zone (for educational
institutions).
Benefits: 100 percent foreign
ownership; fast-track UAE visa issuance plus access to Mazeed
Services, which handles translation of documents, recruitment of
employees, procurement support and creation and printing of
corporate materials.
Starting costs: from 19,900
dirhams (US$5,452).
According to RAKFTZ ’s latest price list, the initial
startup costs include an annual license fee of 3,650 dirhams, plus
a flexi-desk lease of 12,500 dirhams. Visas are 4,900 dirhams per
person. Other charges may apply.
Where? Dubai
One of the rising free zones of the UAE, the
Dubai Technology Entrepreneurship Centre (DTEC) is a startup hub
aimed at supporting young technology companies by providing the
best value for money for those who lack initial capital.
Best for? Companies
specializing in technology, and discounts are given to those who
support or benefit the country’s Islamic economy in their
activities. DTEC companies include Miella, DM
World and Seez
App.
Benefits: 100 percent foreign
ownership, a one-stop shop for registration, government relations
and visa processing – a lot of which can be done online – brand new
working business clusters, and networking events.
Starting costs: from 16,500
dirhams (US$4,500).
Initial startup costs include an annual license
fee of 5,000 dirhams, plus a flexi-desk lease of 6,000 dirhams and
visa of 3,300 dirhams per person. Other charges include
shareholders resolution (300 dirhams), trade name reservation (200
dirhams), attestation (200 dirhams) and refundable security deposit
(1,500 dirhams).
Where? Fujairah
Much like Ras Al Khaimah, Fujairah Free Zone is
also used by a wide variety of companies, and set up costs are very
competitive.
Best for? Any type of business.
Fujairah Free Zone companies include Dutch Diving Consultancy
International, Lightitude and Raj Mineral Exploration And
Services.
Benefits: 100 percent foreign
ownership; access to trading offices and distribution and warehouse
facilities. Their Business Club offers facilities such as a
conference room, auditorium, playroom and
restaurant.
Starting costs: from 34,100
dirhams (US$9,300).
According to Fujairah free
zone’s latest price
list, the initial startup costs include an annual
flexi-desk and license fee of 15,000 dirhams, one-time charges of
5,800 dirhams and 3,300 dirhams per residency visa. A refundable
security deposit of 10,000 dirhams is also required.
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