In order to promote foreign investment in UAE mainland, UAE recently introduced several reforms. One such important step is allowing 100% company share to foreign entrepreneur. Previously, they were only allowed maximum 49% shares in businesses in UAE while 100% shares for foreigners were only allowed in various free zones. This was an important reason that distinguished free zones from mainland UAE.
Though, not all types of businesses are given this incentive and they have to meet few conditions to acquire this opportunity. But even then, it put some pressure on free zones and they are forced to take few steps in order to attract investors. Recently, one such step is taken by one of the best free zones in UAE – DAFZA (Dubai Airport Freezone Authority).
According to details, DAFZA has reduced the cost of setting up a business in the free zone considerably. Now, the companies want to setup their business in DAFZA will be required to pay 65% less as compared to previous fees. Apart from that, the designated free zone is also planning to take other initiatives. The aim behind all these steps is to attract foreign direct investment and increase competitiveness. These new initiatives will be announced soon.
But the reason behind these initiatives is not only to compete against mainland business, but in fact it is part of the broader initiative of UAE to boost non-oil sector by boosting economic growth and diversification of economy.
DAFZA has reduced fees on various levels to make it easier and cost-effective for companies that want to establish business here. The free zone told that it has reduced registration fee by 65%, license fee by 33% and staff visa fee by 20% for new investors. It means the total reduction in fee for these investors will be more than expected.
Few other measures that DAFZA will take in near future include reducing capital requirement for new investors from AED 1 million to AED 50,000, renew expired license without paying expiry fines and allow member companies to be converted to LLFZC (limited liability free zone company).
These recent announcements and measures by DAFZA clearly shows that free zones are ready to provide more incentives in order to attract foreign investors. This will again increase importance of free zones for foreign investment. If you are willing to take advantage of these incentives by DAFZA, then you can contact Riz & Mona Consultancy. We provide assistance for setting up business in DAFZA and all the other free zones present in Dubai and other emirates of UAE.