1. Different Types of Free Zones
The first thing the investors should know before setting up their business in the UAE free zones is that there are two main types of free zone entities in UAE; Free Zone Company (FZC) and Free Zone Establishment (FZE). In case of FZE, there is just a single shareholder required in the form of a company or a person. Comparatively, 2 or more shareholders (companies and persons) are required in case of Free Zone Company (FZC).
2. Keep some extra Cash
There is no doubt that free zones provide immense opportunity due to low cost and higher business opportunities but you should be aware of the fact that you can face few hidden charges with your business in the UAE free zones. These can include card fees, administration fees and others. Therefore, it is important to have at least additional AED 5,000 with you while setting up a business in free zones of UAE.
3. Choose according to Business Type
You can get opportunities of various types before setting up business in the free zones of UAE. Due to this, it is very important to choose best type of business according to the area, state, population and other factors. Another thing that should also be kept in mind that few companies can face geographical limitations which makes it utmost important for them to make the best option about their business in the free zones of UAE in order to gain maximum benefit.
Several free zones are restricted to specific areas. Therefore, these free zones are best for such types of businesses where clients would like to come to you. An example is the start of an educational institute as a business in the UAE free zone as your clients will come to you in this case. But if you are starting business where you have to provide training to the clients at their place of work then the geographical location of the free zone can prove a hindrance in the progress of your business.
4. Avoid Legal Problems
It is important to know that all the 7 states of UAE have their own laws regarding businesses including business in the free zones. Therefore, it is important to take a comprehensive legal advice from a top legal expert before starting business in the free zone in any of the 7 states of UAE. You must also hire a good legal expert during the whole course of your business. It might prove expensive but it is helpful in preventing legal problems that you can face while setting and running your business in the UAE free zone.
5. Prohibited Items in UAE Free Zones
Import and export of most of the goods in the UAE free zones are free from taxes and duties but it is important to remember that not all the goods are allowed in the UAE free zones. There are several goods that are prohibited in every part of UAE including free zones of the country like weapons, narcotics, radioactive materials, imports and exports to an economically boycotted country and others. Therefore, it is necessary to avoid any business that requires goods that are prohibited under the UAE laws. It is not only harmful for your business in the UAE free zone but you can also face punishment according to UAE laws regarding these items.
6. Free Zones for Specific Businesses
The last important thing to consider is that most of the free zones are designated for specific type of businesses. Few of the examples of such free zones are Dubai Healthcare Care and Dubai Media City. But such restrictions don’t apply in all the free zones of UAE as you can get multiple business opportunities in the free zones like Dubai Multi Commodities Center (DMCC) and Dubai Airport Free Zone (DAFZA).