Freezone & Offshore Trade Licenses

What is a Free Zone?

A free zone is a status quo portion of clearly defined and isolated land or setting, with a special tax, customs and imports regime, that is different from the mainland area (country) usually involving a status of extraterritoriality to facilitate investors/stakeholders conduct the day-to-day businesses by having full control.The main idea of establishing free zones in the UAE was to serve the nation as a central business hub for companies willing to conduct business with the outer world.

A free zone company enjoys many advantages. Some of them are:

  • No personal income or capital gain taxes
  • 100% foreign ownership is allowed in free zone business
  • No corporate taxes
  • No duties on import or export
  • 100% repatriation of capital and profits
  • Modern efficient communications
  • Liberal labor laws and no recruitment problems
  • Attractive working environment
  • Low cost of registration comparatively mainland registration

Limitations:

1.Free zone registered companies can operate in local market only via local distributors, retailers or wholesalers
2.Free zones have limited business activities, some of the business activities require additional approvals from the concerned authorities in order to supply product/service

What is Offshore Company?

An offshore company is registered in the free zone jurisdiction like other free zone establishments with a special status & virtue. These companies are same as the free zone entities where an individual/entity can have 100% shares of the company but, unlike the free zone onshore company, all the activities of free zone offshore company must be outside of UAE only 

An offshore company enjoys many advantages. Some of them are;

  • Business Setup time & cost is economical than a free zone company
  • International Business Company(IBC) standard for an offshore registered company
  • No requirement for an office in Free-Zone
  • 100% ownership by Expatriates
  • There are no currency restrictions, one can trade in any currency
  • All income and profits can be repatriated
  • No corporate, personal or capital gains tax
  • Can have bank account in the UAE & internationally
  • Low cost of registration comparatively Free Zone registration

1.Office location will be virtual, hence registered offshore companies are not allowed to have any residence visas
2.Offshore companies are restricted to conduct business transactions within the UAE

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