Dubai is considered an ideal destination for any business to launch. It is known for its business-friendly environment, strategic location, and advanced infrastructure. When it comes to company formation, the best areas in Dubai are free zones, which offer countless benefits to entrepreneurs and businesses.
Overview of Dubai Airport Free Zone Authority
If you are familiar with Dubai free zones, let’s talk about the fastest-growing one: Dubai Airport Free Zone, commonly referred to as DAFZA. It is located next to Dubai International Airport. Its strategic location connects markets in Europe, Asia, and the Middle East, making it accessible and convenient for entrepreneurs and investors.
Currently, more than 3000 companies in DAFZA operate across 20 different sectors. The most common sectors are pharmaceuticals, trading, cosmetics, aviation, and information technology (IT), contributing 4.7% to Dubai’s overall Gross Domestic Product (GDP).
Types of Legal Entities in DAFZA
Dubai Airport Free Zone allows investors to establish two legal entities: a Free Zone Company or a Branch of an existing company. Both have different requirements and perks.
Free Zone Company (FZCO)
- In FZCO, there can be up to 50 shareholders
- Shareholders must invest at least AED 1000
Branch Office
- The owner of the branch office will be the same
- Company name cannot be changed
- Business Activities must be the same as the parent company
Guide for Company Formation in DAFZA
Certain requirements and rules must be followed to operate in DAFZA. Here is a step-by-step guide to help you through the Business Setup process.
Step 1: Choose Company Type, License and Facility
Company Type
The first thing that you have to decide is what type of company you want in DAFZA
- Free Zone Company (FZCO)
A new company with more than one shareholder and a number of business activities.
- Branch Office
A company that is fully owned by the parent company. It doesn’t allow you to sell a different service or product than the parent company.
Choose License Type
After selecting the type of legal entities, the next step is choosing a license based on your business activities
- Commercial license: for activities like trading and Import and Export of goods
- Professional license: If you provide different services to customers, such as consulting
- Industrial license: for manufacturing goods
- Tourism license: for hotel and tour services
Select a Facility
Another important step is to choose a suitable location for your company. It can be an office, shop, or warehouse. Keep in mind that the facility should be selected according to your business type.
Step 2: Submit Documents
Submit the following documents to proceed with the application process for company formation.
Application Form
A form in which details of the company and owners are provided
Business Plan
Explain the reasons for starting this business and what you want to do in the future. Also include,
- Existing Company Brochure
If you have a branch office, you need to provide a brochure. It is a document that explains what your company does. Also, it should discuss the activities, services, and products in detail.
- Financial Report
The annual financial report shows the financial performance of the past year. You need to explain the amount invested in the business, as well as the profit, loss, and expenses. All these factors show how stable your business is.
- Approval
Along with the license, you might need additional approvals from the third-party authorities. For example, if you are providing health services you need permission from the health ministry. If you own a restaurant or bakery, you should have permission from the food authority.
- Passport Copy
Submit passport copies of all the shareholders of the company
- Resume
Provide the owner and employee’s resume. It shows their qualification and experience in the business market.
- No Objection Certificate (NOC)
If you are working for a Company in the UAE, before starting the new role, it is crucial to submit the NOC. It ensures that the current employer has no issue with this.
- Bank Reference
A reference letter from the bank of each shareholder is required to ensure that they are financially responsible and have a good reputation.
Step 3: Collect License
After successful completion of the above steps, you can get your license for company formation. It involves two simple steps.
Signing the Lease: The company owner needs to sign the agreement for office space.
Payment: Pay the required license fee to receive the license.
Features Of Dubai Airport Free Zone Authority (DAFZA)
There are a number of prominent features of DAFZA that make it an ideal choice.
Complete Control
It gives foreign entrepreneurs 100% control over the business. It is helpful in enhancing your earnings as it is all in your control. Wherever you are in the world, you can run your business without any partner or external help. However, the option of choosing a partner is always available if you ever want to.
Easy Processing
The processing path of company registration is like a breath of fresh air as it is simple and convenient for everyone. You can easily register your company without external assistance by following the instructions. It is a fast and straightforward process; you only have to choose the company name and attach the required documents.
Keep in mind that all company names have to end with Ltd. or Incorporated, irrespective of business type.
No Currency Restrictions
Dubai airport free zone companies can easily move money from one country to another without any restrictions. If you have a company in the free zone, you don’t even have to worry about the value of the currency, as you are allowed to keep and trade any currency without any limitation.
Strategic Location
DAFZA is located in a strategic location that connects Asia, Africa, and Europe. It plays a significant role in international trade and reduces transportation time and cost.
No Custom Duties
Dubai airport free zone companies earn more profits for multiple reasons, including the fact that there is no need to pay any tax on goods that are imported or exported from these areas, and owners can buy things from other countries without paying extra money. This all leads to savings, resulting in more money.
Low Crime Rate
Peace of mind for company owners, clients, and employees is essential to setting up and running a company successfully. A low crime rate in DAFZA is an attractive benefit as it provides security, stability, and a reliable environment.
Cost of Company Formation In DAFZA
The cost varies with the change in business activities and the free zone in which you are located. Some business activities require higher investment and certain freezones are more business-friendly than others such as DAFZA.
Generally, the cost of company formation is around about 14,999. However, it is not a fixed price as it varies with a number of factors, such as
- License Type
- Additional Permits
- Number of Visas required
- Extra services
DAFZA falls in the category of most affordable freezones and it has reduced its fee up to 65% making it more within your means.
License Renewal Process
License Renewal is an important step, as an expired license can result in fine and penalties and sometimes legal action. To avoid this, it is crucial to renew the license before the expiration date or immediately after expiration. The license renewal process takes 6 to 7 working days and you are allowed to apply 30 days before it.
Conclusion
At the end of this article, we hope it has given you a clear understanding of the Dubai Airport Free Zone company formation process. Establishing a company in Dubai Airport Free Zone Authority offers many facilities to investors, like incentives, complete ownership, modern infrastructure, and tax relaxation, making it a top choice for company formation and attracting more entrepreneurs and investors. The cherry on top is its cost-effective and easy processing.
If you are feeling confused about starting your own company in DAFZA, don’t worry. Reach out to Al Riyady to get a smooth and hassle-free business setup. You can also access our other services, like the UAE Golden Visa.
