The creation of a company in Dubai is very interesting financially and fiscally, when it is established in a free zone. If you are not familiar with the concept of the free zone, discover the explanations of the experts of our firm of establishment in the United Arab Emirates.
What is a free zone?
A free zone is a geographical area offering a tax advantage to people who opt for these tax niches in a context of business creation. An abatement on the tax rate is thus granted to entrepreneurs who create their company in a free zone.
This type of tax administration was introduced with the aim of developing the region’s economy by encouraging financial investments. Some free zones therefore allow the establishment of companies with an exemption from corporate tax (business tax abolished by the law of January 1, 2010) or profit tax.
In addition to benefiting from tax reductions, companies located in urban free zones can claim certain social benefits. Of course, from one free zone to another, the tax and social benefits are not necessarily identical.
Generally, free zones are created to revitalize economically unattractive urban areas. However, by granting tax and social benefits to companies, some free zones become very attractive. This is for example the case of Dubai’s free zones.
Focus on the Dubai Free Zone in the United Arab Emirates
In the United Arab Emirates, it is possible to set up a company in a free zone since 1985 in a geographical area called Jebel Ali. This free zone being a success, the country has quickly developed other free zones or urban free zones, especially in Dubai, the city that concentrates the economic activity of the country. Today, there are about twenty free zones in this city alone. Among them are Gold & Diamond Parc, Silicon Oasis, Customs & Free Zone Corp, Metal & Commodity Center and Palm Island Development. For the United Arab Emirates, the objective in developing these economically attractive zones was to attract foreign entrepreneurs and therefore investments.
Owning a company in a free zone in Dubai gives the following advantages:
- It can be 100% foreign owned
- It benefits from tax exemptions and advantages: it is not liable for corporate income tax (note that it is still liable for VAT)
- It allows the obtaining of residence and work visas for the manager, his employees and their families: this is mandatory in order to live and work in Dubai legally.
- Finally, it allows to benefit from tax advantages on a personal basis, not only for the company. Indeed, the freezone allows to be exempted from income tax, wealth tax and social charges.
These undeniable fiscal and social advantages, added to the attractiveness and stability of the United Arab Emirates, have allowed Dubai to become a city of choice for foreign investors. In addition, within the various free zones of the city, the infrastructure made available to entrepreneurs is modern and very well equipped: assets to start in good conditions.
Learn more about the Free Zone in Dubai
Are you planning to launch your company in a free zone in Dubai? Do not hesitate to contact our firm of establishment in the United Arab Emirates so that we explain you in detail the tax and social advantages which will be offered to you if you fulfill all the conditions of the country. We can also give you personalized advice in relation to your situation so that the establishment of your company in one of the free zones of Dubai takes place in optimal conditions.
