TECOM free zone offers various features for entrepreneurs, that are not available in other free zones. Free zones are specific areas in the UAE and Dubai that offer favorable conditions to investors. Compared to other areas, investors prefer free zones as they provide more opportunities and perks. These include tax exemption, easy processing, better services, more flexibility, an appealing environment, and strong infrastructure.
More than 30 free zones are available for business set up and each zone is specific for some sectors and business activities. Similarly, the TECOM free zone is specific to the technology and education sector. This zone has attracted many investors in recent years and has become Dubai’s leading tech and innovation hub.
Let’s talk about TECOM Dubai in detail for a better understanding and learn how to establish a business here and obtain a TECOM license.
What is TECOM Free Zone?
TECOM stands for technology, electronic commerce, and media. It is a free zone that has advanced infrastructure, office spaces, and fast internet that supports education, media, science, and other sectors’ activities. It covers 11 different business areas and was initiated in 2005.
Business Setup Option in TECOM Free Zone
In the TECOM free zone, four business options are available for investors.
- Startup office
- Free Zone (LLC) Company
- Business center package
- Branch office
Each setup has different requirements and so are the facilities that are offered. The number of shareholders, visas, and business activities varies with each setup. So, it is recommended that you consult with business experts for a better understanding and to choose the right option for yourself.
TECOM License Options
In the TECOM free zone, three common licenses are available for investors based on their business activities: Commercial, Industrial, and Professional.
- A commercial license is required for those who invest in a business that trades various goods locally or internationally. It is also required if you are going to open an import-export business or trading company and shop in the free zone.
- An industrial license is most appropriate if your company is involved in manufacturing, production, and processing activities.
- A professional license is the most suitable license for those who are talented and have skills to offer. You can get a professional license if you have experience and meet all the requirements set by the Dubai Development Authority.
Company Formation and Registration Process in TECOM
Here is a step-by-step guide to help you in company formation and registration without any hassle.
Ø Select Business Activity and License Type
You are allowed to choose up to 10 business activities under one license type. Out of these 10 activities, 3 are free of cost. It is recommended to select those activities that align with your license type.
Choosing activities without proper understanding and knowledge can cause errors in company formation and opening a bank account.
Ø Legal Entity of Business
The next step is to choose a legal entity for company formation. It can be a startup office, LLC, or branch office. Out of three, LLC is an easy and quick way to form and register a business. Also, LLC provides more flexibility, protection, and benefits than other structures.
If you are not sure about the selected business activity, you can open a branch of an already existing company. It eliminates the need to select license types and business activities because you get bound to operate the same business activities under same license.
Ø Prepare Required Documents
TECOM group requires the following documents along with the application form for company registration. These documents vary with the legal structure of the company.
- Memorandum of Association
- Memorandum of Articles
- Business plan
- Company name (at least 5 suggestions)
- No Objection Certificate
- Contact number and CVs of shareholders
Ø Get a License and Other Documents
Collect the following licenses and certificates to run your business legally in the free zone.
- Trading License
- Articles of Association (AOA)
- Memorandum of Association (MOA)
- Lease Agreement
Ø Medical Test for TECOM Free Zone Setup
The purpose of a medical test is to ensure that the applicant is free from any contagious disease. A medical examination usually includes a blood test and chest x-ray. In case of any disease such as hepatitis, TB, and HIV, the application might be rejected.
If you test negative, you can complete the visa processing. The number of visas depends on the package you choose for your business. Keep in mind that your presence is mandatory in TFZ, as the visa process cannot be completed through an online portal or outside the country.
Ø Pay License Fee
The license fee is not fixed; it varies with the license type and the business activities. The greater the number of activities, the higher the fee. Make sure you check the fee structure before applying for the license.
Ø Open Bank Account
The final step is to open a bank account at any bank suitable for your needs by providing the required documents. Make sure you have provided accurate information while filling out the application form.
Benefits of Company Formation in TECOM Free Zone
TECOM Group offers unlimited benefits to investors and attracts a huge number of investors from all over the world.
o Ownership
If you establish a business in the free zone, you have 100% ownership. This means there is no need for a local partner, which is the most attractive benefit for entrepreneurs. However, a local partner holding 51% of your company is mandatory in other areas.
o Easy Processing
The system in the free zone is efficient and offers convenient and easy processing. You can register your company and apply for a license within weeks. This easy process and hassle-free system make it a popular choice.
o Tax Exemption
Another advantageous feature of the free zone is the tax-free system. When establishing a company, you don’t have to pay any kind of tax, whether corporate or personal.
TECOM License Cost
Estimating a license’s exact cost in TECOM free zone is impossible as it depends on the license type and business activities. As business types and activities change, the cost also varies. So here is a general idea of the cost of different types of licenses.
Ø Commercial license cost is 15000 AED
Ø Freelancer license costs 7500 AED
Ø Professional license also costs 15000 AED
Conclusion
TECOM offers notable features that are not available in any other free zone. It offers incentives and opportunities to help your business grow. Investors can choose any business activity based on their interests. The favorable environment, low setup cost, and easy license renewal process are the key factors that attract everyone.
Starting a business can be challenging without the guidance of professionals. Reach out to Al Riyady for assistance. Our experts can help you set up your business and obtain a UAE golden visa.
