FREE ZONE SET UP:
The Free Trade Zones have been set up with the specific purpose of facilitating investment. The procedures for investing in the zones are relatively simple. The companies operating in the Free Zones are treated as being offshore companies or outside the UAE for legal purposes.
A geographic area, often near a port or airport, where goods can be imported, stored, improved, and exported without duties. Duties are required only if and when goods in the free trade zone enter into commerce in the host country. Also called free port.
The free zones are suitable for companies intending to use UAE as a regional manufacturing or distribution base, with the bulk of their business outside the UAE.
A free trade zone ( FTZ ) or export processing zone ( EPZ ) is one or more special areas of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. It is a region where a group of countries has agreed to reduce or eliminate trade barriers. [1] Free trade zones can be defined as labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products.
Most FTZs are located in developing countries. Bureaucracy is typically minimized by outsourcing it to the FTZ operator and corporations setting up in the zone may be given tax breaks as an additional incentive. Usually, these zones are set up in underdeveloped parts of the host country, the rationale being that the zones will attract employers and thus reduce poverty and unemployment and stimulate the areas economy. These zones are often used by multinational corporations to set up factories to produce goods (such as clothing or shoes).
LICENSES:
Companies approved for operation in Free Trade Zones, can apply for one of the following types of licenses: Trading; Industrial; Service; or National Industrial. These licenses are renewable annually.
Trading licenses are granted to locally incorporated companies, and to companies incorporated outside the UAE. Trading licenses are also issued to Free Zone Establishments (FZE) and Free Zone Companies FZCo’s).
Industrial licenses are issued to companies incorporated outside the UAE, FZE’s and FZCo’s. Service licenses are only granted to companies holding a UAE license.
National Industrial licenses are issued to industrial companies registered within or outside the UAE, provided they meet the conditions of having at least 51% AGCC equity and their local production accounts for at least 40% value added. Products exported by such companies to AGCC states will be exempted from custom duties. Companies holding Free Zone license are also permitted to operate outside the UAE. Operations within the UAE can be undertaken by appointing a commercial agent.
Setting Up a Branch of a Foreign Company
A foreign company can set up a 100% owned branch in the Free Zone. A questionnaire and license application form with necessary documents are required to set up a project by a foreign company. Thereafter, a lease agreement and a personnel secondment agreement will be signed.
If the company’s project involves the erection of a structure, a building permit will be issued after detailed plans are submitted and agreed. Administrative work, such as importing equipment or engaging labor for installation of equipment, may proceed in parallel with construction work.
A geographic area, often near a port or airport, where goods can be imported, stored, improved, and exported without duties. Duties are required only if and when goods in the free trade zone enter into commerce in the host country. Also called free port.
The free zones are suitable for companies intending to use UAE as a regional manufacturing or distribution base, with the bulk of their business outside the UAE.
A free trade zone ( FTZ ) or export processing zone ( EPZ ) is one or more special areas of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. It is a region where a group of countries has agreed to reduce or eliminate trade barriers. [1] Free trade zones can be defined as labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products.
Most FTZs are located in developing countries. Bureaucracy is typically minimized by outsourcing it to the FTZ operator and corporations setting up in the zone may be given tax breaks as an additional incentive. Usually, these zones are set up in underdeveloped parts of the host country, the rationale being that the zones will attract employers and thus reduce poverty and unemployment and stimulate the areas economy. These zones are often used by multinational corporations to set up factories to produce goods (such as clothing or shoes).
LICENSES:
Companies approved for operation in Free Trade Zones, can apply for one of the following types of licenses: Trading; Industrial; Service; or National Industrial. These licenses are renewable annually.
Trading licenses are granted to locally incorporated companies, and to companies incorporated outside the UAE. Trading licenses are also issued to Free Zone Establishments (FZE) and Free Zone Companies FZCo’s).
Industrial licenses are issued to companies incorporated outside the UAE, FZE’s and FZCo’s. Service licenses are only granted to companies holding a UAE license.
National Industrial licenses are issued to industrial companies registered within or outside the UAE, provided they meet the conditions of having at least 51% AGCC equity and their local production accounts for at least 40% value added. Products exported by such companies to AGCC states will be exempted from custom duties. Companies holding Free Zone license are also permitted to operate outside the UAE. Operations within the UAE can be undertaken by appointing a commercial agent.
Setting Up a Branch of a Foreign Company
A foreign company can set up a 100% owned branch in the Free Zone. A questionnaire and license application form with necessary documents are required to set up a project by a foreign company. Thereafter, a lease agreement and a personnel secondment agreement will be signed.
If the company’s project involves the erection of a structure, a building permit will be issued after detailed plans are submitted and agreed. Administrative work, such as importing equipment or engaging labor for installation of equipment, may proceed in parallel with construction work.
MAIN FREE ZONE AUTHORITIES IN UAE
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E.) DUBAI MULTI COMMODITIES FREEZONE (DMCC)
The Dubai Multi Commodities Centre (DMCC) is a strategic initiative of the Dubai government created to establish a commodity market place in Dubai. Rated A by Standard & Poors, it provides industry-specific market infrastructure and a full range of facilities for the gold & precious metals, diamonds & coloured stones, energy and other commodities industries. The Dubai Multi Commodities Centre (DMCC) is a strategic initiative of the Dubai government created to establish a commodity market place in Dubai. Rated A by Standard & Poors, it provides industry-specific market infrastructure and a full range of facilities for the gold & precious metals, diamonds & coloured stones, energy and other commodities industries. Launched in 2002, this strategic government initiative has been established to support the specific needs of its core segments Gold & Precious Metals, Diamonds & Colored Stones, Energy and Other Commodities industries.
The Dubai Multi Commodities Centre (DMCC) is a strategic initiative of the Dubai government created to establish a commodity market place in Dubai. Rated A by Standard & Poors, it provides industry-specific market infrastructure and a full range of facilities for the gold & precious metals, diamonds & coloured stones, energy and other commodities industries. The Dubai Multi Commodities Centre (DMCC) is a strategic initiative of the Dubai government created to establish a commodity market place in Dubai. Rated A by Standard & Poors, it provides industry-specific market infrastructure and a full range of facilities for the gold & precious metals, diamonds & coloured stones, energy and other commodities industries. Launched in 2002, this strategic government initiative has been established to support the specific needs of its core segments Gold & Precious Metals, Diamonds & Colored Stones, Energy and Other Commodities industries.
Free Zone Incentives
Free Zones in UAE
- Company registration certificate
- Board of directors’ resolution for establishing a branch
- True copy of company’s memorandum / articles of association
- Power of Attorney to the representative
- Financial statements for the last two years
- Local service agency agreement
- Details of local service agent
- Company profile
Free Zones in UAE
- Dubai Airport Free Zone (DAFZA)
- Jebel Ali Free Zone (JAFZA)
- Dubai Multi Commodity Centre (DMCC)
- Dubai Auto Zone (DAZ)
- Dubai Bio-technology & Research Park
- Dubai Flower Centre
- Dubai Gold and Diamond Park
- Dubai Healthcare City (DHCC)
- Dubai International Academic City
- Dubai International Financial Centre (DIFC)
- Dubai Internet City (DIC)
- International Media Production Zone
- Intl. Humanitarian City
- Dubai Knowledge Village
- Dubai Logistics City
- Dubai Maritime City
- Dubai Media City
- International Media Production Zone
- Jumeira Lake Towers (JLT)
- Dubai Outsource Zone
- Dubai Silicon Oasis
- Dubai Studio City
- Techno park
- Sharjah Airport International Free zone (SAIF)
- Hamriyah Free Zone , Sharjah
- RAK Investment Authority Free zone (RAKIA)
- Ras Al-Khaima FTZ
- Ahmed Bin Rashid FZ
- Ajman Free Zone
- Fujairah Free Zone
Advantages & Disadvantages of
Free Zone Setups.
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Disadvantages:
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OFFSHORE SET UP:
An offshore company is a company which does not carry out any substantial business activities in its country of formation and is framed in a law of no tax jurisdiction for the purposes of legally reducing any kind of tax payment and enhancing one's wealth management.
The words offshore business and offshore company have no precise legal, tax or general business meaning. The word offshore often means nothing more than anywhere other than the place of physical location of the person using the word (i.e. overseas). We use the words offshore business and offshore company as terms of definition in connection with matters such as the structuring of international business & family wealth management or tax planning.
Incorporation of an offshore company (or non-resident company) can be used for various purposes. One of the most common is the use of an offshore company as a holding company to hold interests in other companies in various jurisdictions, to hold trademarks, copyrights and other intellectual property rights, as well as to serve as the holding company for licensing of franchises. The income from taxable jurisdiction flowing to the offshore company (holding company) is not taxable.
Mostly one would open an offshore company to secure confidentiality over their financial matters and increase wealth without interruption. Offshore companies can eliminate or cut down many types of tax payments such as: Capital gains, V.A.T, Death duty, profits on business earnings and property sales. An offshore company legitimately helps one in gaining confidentiality over one's financial affairs and growing one's wealth.
Offshore companies can eliminate many types of tax payments such as:
The words offshore business and offshore company have no precise legal, tax or general business meaning. The word offshore often means nothing more than anywhere other than the place of physical location of the person using the word (i.e. overseas). We use the words offshore business and offshore company as terms of definition in connection with matters such as the structuring of international business & family wealth management or tax planning.
Incorporation of an offshore company (or non-resident company) can be used for various purposes. One of the most common is the use of an offshore company as a holding company to hold interests in other companies in various jurisdictions, to hold trademarks, copyrights and other intellectual property rights, as well as to serve as the holding company for licensing of franchises. The income from taxable jurisdiction flowing to the offshore company (holding company) is not taxable.
Mostly one would open an offshore company to secure confidentiality over their financial matters and increase wealth without interruption. Offshore companies can eliminate or cut down many types of tax payments such as: Capital gains, V.A.T, Death duty, profits on business earnings and property sales. An offshore company legitimately helps one in gaining confidentiality over one's financial affairs and growing one's wealth.
Offshore companies can eliminate many types of tax payments such as:
- Capital Gains
- Profits on Business Earnings
- Property Sales
- V.A.T
Offshore
Companies Applications The principal uses of offshore companies are:
Advantages & Features
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Advantages & Disadvantages of
off Shore Setups.
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Disadvantages:
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