The International Free Zone Authority was established in 2018; and it has since been a popular choice for free zone business establishments in the Emirates. This is because IFZA company formation stands out in terms of the quality of services and solutions it offers. They provide effective and efficient international quality services.
In this article, you will learn everything about why IFZA company formation is so appealing to entrepreneurs and businesspeople all over the world. Let us observe:
- An overview on IFZA company formation
- What exactly is a free zone?
- Why would you want to set up shop in a free zone?
- What is the procedure for obtaining a UAE Residence Visa through an IFZA Company?
- The advantages of starting a business in an IFZA Free Zone
- IFZA offers trade licenses
- What kinds of licenses does IFZA issue?
- How can Connect Group help you with your IFZA company formation?
1. An overview on IFZA company formation
Aside from providing high-quality services, IFZA also offers numerous opportunities to entrepreneurs. This is due to Dubai’s strategic location, which is well connected to the rest of the world.
Dubai is a thriving emirate that offers numerous benefits and opportunities to businesses that locate there. It is not only among the best areas in the Middle East, but also one of the best business locations in the world.
The UAE is currently engaged in a long-term process of shifting the country’s economic focus away from the oil and gas sectors. As a result, the government is providing numerous benefits to businesses in all industries.
The advantages are particularly relevant for entrepreneurs and business owners who are moving to the UAE from other countries to establish their startups and businesses.
2. What exactly is a free zone?
Free zones are geographically defined areas within the UAE (though most are not fenced or gated) that allow 100 percent foreign ownership and are usually dedicated to a specific industry. They were created to support strategic transformation in key industries (such as finance), and many are built with public funds and feature cutting-edge facilities.
For example, the Dubai Media City, one of Dubai’s free zones, has infrastructure and licenses tailored to the media industry’s requirements. Similarly, the Dubai International Financial Centre (DIFC) attracts financial services firms; attracting insurance, financial services, and investment firms, as well as banks looking to expand their international client base.
As a result, each free zone has its own set of requirements for minimum capital, office or warehouse space; and permitted activities, with each possessing the necessary licenses and legislation to allow their dedicated industry to thrive.
3. Why would you want to set up shop in a free zone?
There are numerous advantages to establishing a business in a free zone in the UAE.
3.1. Setup is simple
The process of setting up a company is quite simple in most free trade zones. The exact application process will vary depending on your business activity and free zone of choice; but in many cases, you will only need to provide some basic documentation such as passport copies and business paperwork.
Hence, the entire process usually takes only a week or two. Many free zones also provide flexi-desk and virtual packages, which allow you to use the free zone address and facilities on an as-needed basis.
3.2. Taxes and duties
The most convincing reason for choosing a free zone is its tax regime. If you set up your business in a free zone, you will not only benefit from 0% corporate and personal tax; but you will also be exempt from VAT, which is currently at 5%.
That is not all. Businesses in free zones are also exempt from import and export taxes and have no currency restrictions. It worth to note that Connect Group offers the best tax consultancy services in the market.
3.3. Foreign ownership is prevalent
Foreign company ownership is one of the most attractive benefits. If you want to set up a shop on the Dubai Mainland, you must collaborate with a local partner. However, if the UAE’s free zones, things are different; you will retain complete ownership when you set up your company here.
3.4. Buying and selling within the UAE
FZ companies cannot trade directly with the UAE’s local market; however, this is easily overcome. An option is to work with a locally appointed distributor who can market your goods and services for a fee.
Alternatively, you can establish your free zone business and then later open branch offices of your free zone company throughout the Emirates. These branches can be used to market your product and conduct business on the UAE mainland.
3.5. Help and assistance
The FZ authorities can help you with setup. Most FZs assist any applicable dependents in applying for visas; for example, spouses or domestic staff. Many will also help you open corporate bank accounts, recommend the best bank for your needs, and even arrange in-branch meetings for you.
In terms of ongoing business support, it is not uncommon for free zones to provide business advice and networking services; as well as access to startup hubs and growth initiatives to assist new businesses in getting started. For this, we offer business consultancy services.
3.6. Privacy safeguards
Finally, because there is no open directory of company ownership; and company information such as shareholder details are never disclosed to the public, free zones are especially popular with privacy-conscious entrepreneurs.
4. What is the procedure for obtaining a UAE Residence Visa through an IFZA Company?
- After receiving your IFZA business license, you can apply for your company’s establishment card within 5-7 days.
- Complete the application form and send it to IFZA.
- Pay the fees associated with the procedure.
- Once they issue your visa, they will give dates for your medical examination (in under 2-3 working days).
- Take the medical examination and then apply for your Emirates ID.
- After your medical results have been approved, proceed to the Emirates biometric scanning process.
- Submit the requested documents to the IFZA office for review.
- Pick up your Emirates ID and Visa in 9-10 days.
5. The advantages of starting a business in an IFZA Free Zone
The following are the advantages of establishing a business in the IFZA Free Zone:
5.1. Low-cost business establishment
Setting up a business in an IFZA Free Zone is both inexpensive and simple. The process is even simpler when done with the help of Company Setup experts who have previously established many businesses in the IFZA Free Zone.
Even with the help of Company Setup experts, the entire process is very affordable and inexpensive in comparison to the rest of Dubai. Hence, you should consider our outstanding company formation services.
5.2. A diverse list of business activities
The IFZA Free Zone is one of the few economic jurisdictions in the UAE that allows you to conduct trading, service, and industrial business under a single license. Under four business trade licenses, IFZA officials have listed all possible business activities.
5.3. Simple procedure for opening a bank account
When you have an IFZA business trade license, opening a bank account in the UAE becomes very simple. Opening a corporate bank account in the UAE is typically a complicated and time-consuming process. An IFZA trade license, on the other hand, makes the entire process much easier.
5.4. Available Limited Liability Company
The IFZA Free Zone supports a variety of company structures for both new and existing businesses. Most notably, this zone allows businesses to form a Limited Liability Company.
5.5. Geographically advantageous location
As previously stated, the IFZA Free Zone’s strategic location within Dubai offers numerous advantages to businesses that operate there.
5.6. Foreign ownership is permitted in its entirety
The UAE government does not permit 100 percent ownership in sectors that are strategically important to the UAE. However, when you establish a business in the IFZA Free Zone, you can own 100 percent of the company. You can also read our guide on this matter.
5.7. High standard of living
Dubai has the highest standard of living in the UAE. Here, you can have a stable and robust family life. Hence, you can sponsor the visas of your spouse, children, and domestic worker after you have established a business in the IFZA Free Zone.
6. IFZA trade licenses
The trade license you will need will be determined by the type of business you intend to conduct in the IFZA Free Zone. One business trade license can cover up to seven different business activities. The benefit of holding an IFZA trade license is that you can conduct professional, commercial, and industrial business activities under one trade license.
The following are the trade licenses provided by the IFZA Free Zone in Dubai:
6.1. Service Permit
A service license allows you to engage in business activities that necessitate expertise and experience in a particular field. For example, if you want to offer healthcare services in the IFZA Free Zone, you must first obtain a service license.
Hence, to obtain the service license, you must demonstrate that you are educated in the field for which you are applying. They may request educational certificates or letters of recommendation to validate your experience.
6.2. Industrial Permit
The industrial license allows you to engage in a variety of activities, including the transformation of raw materials into finished products. Therefore, importing raw materials, hiring factory workers, packaging, distributing, selling, and exporting the finished product to other countries are all part of these activities.
With the assistance of a local service agent, you can sell your product in another location in the UAE.
6.3. Trade license
The trading license allows you to engage in activities that are typically associated with a retail business. You can buy and sell products and services that do not require any special knowledge or experience. You can also engage in industrial activities like packaging and rebranding. For this reason, the trading license is the most versatile trading license offered by the IFZA.
6.4. Possession of a license
The holding license is for investors who want to own stocks and shares in a company without being involved in management or decision-making. As a business owner or entrepreneur, you can also establish a holding company in the IFZA Free Zone. So, your holding company can own shares in other companies in the UAE.
7. What kinds of licenses does IFZA issue?
The International Free Zone Authority (IFZA) grants the following licenses:
7.1. Commercial permit
A commercial license grants you the legal authority to begin import, export, storage, and distribution procedures.
7.2. Business license
An industrial license is required for businesses that want to import raw materials in their area. Manufacturing and processing of a few specific items is only legal if you have an industrial license.
7.3. Professional certification
Professional licenses are expected to be obtained by consulting firms and service providers. The DED issues professional licenses.
7.4. A consulting license
You must have an IFZA consultancy license to provide expert consultancy services to professionals.
7.5. Service permit
The primary activities permitted for those with service licenses issued in their company’s name are service production and transportation.
7.6. General business license
If you have an IFZA general trading license, you can access a wide range of services and trading opportunities. A general trade license enables you to begin trading your goods and services in a B2B, B2C, or C2B business model.
8. How can Connect Group help you with your IFZA company formation?
If you want to start a business in IFZA Free Zone but do not know where to begin, we are the right place. Our experts have previously started multiple companies in the free zones and have the necessary connections for a quick company incorporation.
Feel free to contact Connect Group to get proper assistance with your IFZA company formation. Do not hesitate to call us at +971 43 316 688 if you have any questions. Additionally, you can email us at contact@connectgroup.co. We are ready to help you with anything you need.
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