This article highlights how entrepreneurs can select the most cost-effective free zone jurisdiction to start their business in the UAE.
Most entrepreneurs seek to minimize costs when launching their business. Entrepreneurs in the UAE have a myriad of choices which can be very overwhelming! Fear not, we have highlighted a few things to consider that will help you make the right decision for your new business.
Business Lease for Free Zone
Your business’s physical location (or lack of a need for a physical site) can have a significant impact on picking the free zone that is best suited for you. Many jurisdictions offer affordable licenses without the need for an expensive lease which can take up a substantial portion of your start-up cash. Free zones such as Ajman Free Zone, Fujairah Creative City, UAQ Free Zone, SHAMS Free Zone, and many others offer Smart-desks or Flexi-desks that cost a fraction of a traditional office lease. These free zones are ideal for people who can work remotely or let logistics companies take care of the movement of goods (if applicable).
UAE Residence Visas
The number of visa allocations can impact your decision, especially if you envision hiring several staff members. Some free zones offer 5 to 7 visas without having a full-fledged office. Other free zones will limit you to 1 or 2 visas. Remember to ask for the maximum number of visas for any given package, and you might discover that the least expensive package does not match your recruitment needs.
Sometimes all you need is a visa for yourself as a freelancer. One of the best options for freelancers is the Go Freelance package from TECOM that will give you a permit and grant you one residence visa. It is, by far, one of the most cost-effective packages in Dubai.
Free Zone Business Activity
The business activity you plan to engage in can play a big role in the free zone you select. Certain activities, such as consultancy licenses or general trading licenses, are available in most jurisdictions; therefore, it is not an issue. However, suppose you were planning to open a law firm, travel agency, or engage in the trade of diamonds. In that case, the jurisdictions that you can choose from considerably dwindle since only a select few offer such licenses. You will also have to factor in where your clients are located, which sites have the infrastructure to support your business, and which free zone can propel your business over the long run.
Cost of Ongoing Administrative Services for Your Free Zone Company
Picking a far-away jurisdiction from the Emirate of your residence can have an ongoing cost implication. The location of where your residence visa is issued has a direct impact on the following services that you may require:
- Drivers license
- Vehicle license plate
- Liquor license
- No objection certificates
- Salary certificates
In essence, you will have to use the services of the Emirate or the free zone jurisdiction where you incorporated. If you live in Fujairah and your company is in Ras Al Khaimah free zone, this could result in frequent travel back and forth. You should also factor in the annual renewal fees and their track record over for the last five years of any price increases. Even closing the company can be a costly endeavor involving liquidators and extensive fees. Be sure to get an outline of all the costs before an inexpensive start-up package lures you. You can also go through this article where you can learn how to cancel a trade license in Dubai.
Speak to Entrepreneurs and Business Consultants!
As a part of your due diligence, speak to other entrepreneurs in your sector to get an idea of what they think is the most cost-effective free zone. Sometimes a simple conversation can shed light on factors that you did not consider. There are several business networking events organized year-round across the UAE that can help you connect with others in your sector.
Finally, speak to business consultants about your needs and requirements. We work with dozens of jurisdictions and know just the right solution for you. Our familiarity with all the rules and regulations can save you from making a costly mistake. Our initial consultation is free, and you have nothing to lose by giving us a call!
Leave a reply