There are free trade zones in the world, and there are free zones that do not charge taxes to corporations. These free zones have their own authorities. Hence, there are a number of benefits as well.
Free zones exist to attract foreign investments. People from other country would be more willing to take a risk in forming a company outside their country if it means there are more benefits in doing so.
One of the most sought-after free zones are in the United Arab Emirates (UAE). There are seven Emirates in the country. In each Emirate, there is a number of free zones to choose from, such as Dubai Airport Free Zone, TwoFour54, Sharjah Airport Free Zone Authority, Fujairah Free Zone Authority, Ras Alkhaimah Free Trade Zone, etc. Each free zone has a list of their own benefits that surpasses the four main advantages listed above.
There have been a lot of business setups conducted in UAE (they are too many to count!), such as business setup in Creative City Fujairah,Hamriya Free Zone Authority, Dubai Design District, etc.
Four Advantages You Have in a Tax-Free Area
The below list is composed of the four main advantages of setting up a business in a no-tax free zone.
- 100% Ownership
Businessmen outside UAE who would like to form a company here are required to have a local partner that will hold 51% of the shares. Before they can setup a business, they should look for a local partner who then will be given an annual payment as well. However, if you are in the free zone, you wouldn’t need a local partner, hence having 100% ownership of your business.
- Tax-Free Area
Although the Executive Regulation has been released by the Federal Tax Authority (FTA)stating that companies eligible for VAT in free zones need to register, free zones are still considered as tax-free since corporations are not charged for corporate tax or income tax.
- Duty Exemption
All corporations inside the free zones are 100% exempted from duty on exports to non-GCC countries. However, there is a 5% customs duty that should be paid when it is in the local GCC market.
- Low Share Capital Requirements
There is a difference in each free zone when it comes to the required share capital. Sometimes, the rules of the free zone authorities change regarding what the share capital should be. But on a lighter note, a low share capital requirement can be expected when you are looking for a business setup in a free zone.
You can choose from the 40 free zones available in the UAE. For an instance, business setup in Fujairah Free Zone can be done in two free zones that are located there. Conducting a business setup in Creative City Fujairah has the same benefits above and more. It is mostly centered on media and entertainment that would greatly interest the businessmen who are looking to conduct a business setup in Fujairah Free Zone. Check this page if you need more information regarding business setup.