Dubai Airport Free zone Company Formation

Opening a Company in the Dubai Airport Free Zone (DAFZA): A Guide for Non-Residents

The Dubai Airport Free Zone (DAFZA) is a strategically located zone that offers attractive business opportunities, especially for companies focused on international trade and logistics. Its proximity to Dubai International Airport provides quick and efficient access to global markets.

Political and Economic Stability of the UAE:

The UAE, and particularly Dubai, is known for its political and economic stability, making it an attractive place for foreign investments. The government actively supports business development and offers a favorable environment for entrepreneurs.

DAFZA Legislation:

DAFZA has its own legislation governing the activities of companies registered in the zone. This legislation is designed to simplify business processes and ensure transparency. It is important to familiarize yourself with the current rules and regulations of DAFZA before starting the registration process.

Advantages of Company Registration in DAFZA for Non-Residents:

100% foreign ownership: Non-residents can own 100% of the shares of their company in DAFZA.

100% exemption from corporate tax and income tax: Companies registered in DAFZA are exempt from paying corporate tax and income tax.

100% repatriation of capital and profits: Non-residents can freely repatriate their capital and profits.

No currency restrictions: There are no currency restrictions in DAFZA.

Simple registration procedure: The process of registering a company in DAFZA is relatively simple and efficient.

Access to modern infrastructure: DAFZA offers modern infrastructure, including office spaces, warehouses, and logistics services.

Strategic location: The location near Dubai International Airport provides easy access to global markets.

Opportunity to obtain a resident visa: Owners and employees of companies registered in DAFZA can obtain a UAE resident visa.

Requirements for Company Registration in DAFZA for Non-Residents:

Choosing the type of company: It is necessary to choose the appropriate type of company, such as Free Zone Establishment (FZE) or Free Zone Company (FZCO).

Choosing the type of activity: It is necessary to select the type of activity that the company will carry out.

Choosing the company name: It is necessary to choose a unique company name that meets DAFZA requirements.

Office rental: It is necessary to rent an office in DAFZA. DAFZA offers various office space options, from small offices to large warehouses.

Obtaining a business license: It is necessary to obtain a business license from DAFZA.

Company Registration Procedure in DAFZA:

1. 1. Application submission: An application for company registration in DAFZA must be submitted.
   2. Document submission: Necessary documents must be provided, including copies of the founders’ passports, a business plan, and other documents required by DAFZA.
   3. Fee payment: Registration fees must be paid.
   4. License issuance:
   5. After the application is approved and fees are paid, DAFZA issues a business license.
   6. Company registration: The company is registered in the DAFZA company registry.
   7. Opening a bank account: It is necessary to open a bank account in the UAE for business operations.
   8. Obtaining a resident visa (if necessary): Owners and employees of the company can apply for a UAE resident visa.

Documents Required for Company Registration in DAFZA:

• Copies of the founders’ and managers’ passports.
• A business plan outlining the company’s activities and objectives.
• Company charter (Memorandum and Articles of Association).
• Proof of office rental in DAFZA (lease agreement).
• Letter of Intent.
• Bank statement confirming the availability of funds for investment.
• Other documents that may be requested by DAFZA depending on the type of company and activity.

Office Rental in DAFZA:

DAFZA offers a wide range of office spaces to meet various business needs. Both small offices for startups and large office spaces and warehouses for larger companies are available. The rental cost depends on the size of the office, its location, and the services provided. Renting an office is a mandatory condition for registering a company in DAFZA.

Visas:

DAFZA provides the opportunity to obtain a UAE resident visa for owners, employees, and their dependents. The number of visas a company can obtain depends on the size of the office and the type of activity. The visa application process includes a medical examination, obtaining an Emirates ID, and visa processing at the General Directorate of Residency and Foreigners Affairs (GDRFA).

Business Licenses:

DAFZA offers various types of business licenses depending on the type of activity the company plans to undertake. It is important to choose the correct type of license to comply with DAFZA requirements and UAE legislation. Some of the most common types of licenses include:

Trading License: Allows the company to engage in the import, export, and trade of goods.

Service License: Allows the company to provide various services such as consulting, marketing, and IT services.

Industrial License: Allows the company to engage in the manufacturing and processing of goods.

Tax and Other Benefits for Non-Residents in DAFZA:

As mentioned, DAFZA offers a number of tax and other benefits for non-residents, making it an attractive place for business. In addition to 100% exemption from corporate tax and income tax, as well as 100% repatriation of capital and profits, DAFZA also offers:

• No customs duties on the import and export of goods.
• A simple procedure for hiring foreign employees.
• Access to a wide range of business services such as legal, accounting, and marketing services.
• Support from DAFZA in business development and networking with other companies.

Additional Aspects to Consider:

Audit and Reporting: Companies registered in DAFZA are required to maintain accounting records and provide audited financial statements in accordance with DAFZA requirements. It is important to choose a qualified auditor with experience working with companies in free zones.

Labor Legislation: Although DAFZA has its own rules regarding labor relations, companies must also comply with the basic provisions of UAE labor legislation. It is important to familiarize yourself with these provisions and ensure compliance.

Intellectual Property: DAFZA provides protection for the intellectual property of companies registered in the zone. It is important to register your trademarks, patents, and other intellectual property to protect your rights.

Compliance with KYC (Know Your Customer) and AML (Anti-Money Laundering) Requirements: Companies registered in DAFZA are required to comply with KYC and AML requirements to prevent money laundering and terrorist financing. It is important to develop and implement appropriate procedures and policies.

License Renewal: A business license in DAFZA has a limited validity period and requires regular renewal. It is important to apply for license renewal in a timely manner to avoid suspension of the company’s activities.

License Termination: In the event of a company ceasing operations, it is necessary to officially terminate the license in DAFZA. The termination procedure includes settling all debts, closing the bank account, and providing the necessary documents to DAFZA.

Tips for Successful Company Registration in DAFZA:

Conduct thorough market research: Before registering a company, conduct thorough market research to ensure there is demand for your goods or services.

Develop a detailed business plan: Create a detailed business plan that clearly defines the company’s goals, strategies, and financial forecasts.

Choose the appropriate type of company and activity: Select the appropriate type of company and activity that align with your needs and objectives.

Hire qualified consultants: Hire qualified consultants specializing in company registration in UAE free zones.

Gather all necessary documents: Collect all necessary documents in advance to avoid delays in the registration process.

Comply with all DAFZA requirements: Adhere to all DAFZA requirements to ensure a smooth and successful registration process.

DAFZA continues to evolve and offer new business opportunities.

In conclusion, DAFZA offers attractive opportunities for non-residents looking to start a business in the UAE. With its strategic location, modern infrastructure, favorable regulatory framework, and numerous tax incentives, DAFZA is an ideal place for companies seeking to expand into international markets.

However, before starting the registration process, it is important to carefully study all the requirements and conditions of DAFZA, as well as consult with professional advisors specializing in company registration in UAE free zones. This will help avoid potential mistakes and ensure a smooth and successful registration process.

FAQ: Taxation – Dubai Airport Free Zone Company

What is the tax regime for companies in Dubai Airport Free Zone?

Companies operating within the Dubai Airport Free Zone benefit from a favorable tax environment. There is a 0% corporate tax on profits for 15 years, which can be renewed for an additional 15 years. Furthermore, there is no personal income tax for employees working within the free zone.

Are there any customs duties for goods imported into the Dubai Airport Free Zone?

Goods imported into the Dubai Airport Free Zone are exempt from customs duties. This benefit encourages businesses to import goods for trade or manufacturing without incurring additional costs, promoting economic activity in the region.

What are the requirements for obtaining a tax residency certificate in Dubai?

To obtain a tax residency certificate in Dubai, companies must maintain a physical presence in the free zone, which includes having an office space and employing a minimum number of staff. This certificate is essential for businesses seeking to benefit from double taxation treaties that Dubai holds with various countries.

Is VAT applicable in Dubai Airport Free Zone?

Yes, the Value Added Tax (VAT) at a standard rate of 5% is applicable in Dubai, including in the Dubai Airport Free Zone. However, certain activities may be exempt, and businesses should ensure compliance and potential recovery of VAT on specific expenses.

What are the implications of tax residency for companies in the free zone?

Companies in the Dubai Airport Free Zone may enjoy tax residency, allowing them to benefit from various international tax treaties. This status is important for businesses aiming to minimize their global tax liabilities and facilitate smoother international operations.

Can foreign investors fully own businesses in Dubai Airport Free Zone?

Yes, foreign investors can own 100% of their businesses in the Dubai Airport Free Zone without the need for a local partner. This openness encourages foreign investment and entrepreneurship, making it an attractive destination for global businesses.