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Everything you need to know about the Free Zones in the UAE

Numerous free zones can be found throughout the UAE, providing businesses and entrepreneurs with a welcoming environment in which to operate. 100% foreign ownership, no corporate or personal income tax, and no limitations on the repatriation of capital and profits are just a few advantages that these free zones offer.

The AFZ, DMCC, IFZA, JAFZA, and DAFZA, here are a few well-known free zones in the UAE. Every free zone has a different set of benefits and a specific industry focus, so it is crucial for businesses to pick one that complements their objectives and goals. To make an informed choice when it comes to establishing a business in the UAE, the business owner needs to comprehend the distinctions between these free zones in this context.

Let's begin by defining what a "Free Zone" is in the UAE
A "Free Zone" is a designated geographic area in the United Arab Emirates where foreign investors and businesses can establish their operations with full ownership and without the requirement of a local sponsor or partner. These zones provide a variety of incentives and benefits to businesses, such as tax exemptions, waivers of customs duties, and streamlined procedures for business setup.

Free Zones in the UAE are frequently situated close to airports, seaports, or other significant transportation hubs, making them perfect for companies engaged in export-import, logistics, or trading activities. In addition, they offer a variety of top-notch infrastructure and business support services, such as contemporary office spaces, warehouses, and logistics facilities.

Over 40 free zones exist in the United Arab Emirates, each with a distinct set of guidelines and a specific industry focus. Businesses that locate in these zones can benefit from an environment that is supportive of expansion and innovation. By luring foreign investment and generating job opportunities, the free zones have contributed significantly to the UAE's economic growth.

AFZ, or Ajman Free Zone
One of the top free zones in the UAE is the Ajman Free Zone (AFZ), which is situated in the Emirate of Ajman, about 20 kilometres from Dubai. AFZ was founded in 1988 with the intention of fostering business opportunities and regional economic development.

100% foreign ownership, no corporate or personal income tax, and no limitations on the repatriation of capital and profits are just a few of the advantages that AFZ provides to companies that locate within its borders. Additional business support services offered by the free zone include licensing, visas, and customs clearance.

Over 8,000 businesses from a range of sectors, including manufacturing, services, logistics, and trading, are based in the AFZ. The free zone also provides cutting-edge infrastructure and facilities, such as offices, warehouses, and land for development.

DMCC, or Dubai Multi Commodities Center
Dubai Multi Commodities Center, or DMCC for short, is a free zone in the United Arab Emirates that is situated right in the middle of Dubai. Over 18,000 businesses representing a range of industries are housed in DMCC, one of the largest and fastest-growing free zones in the UAE.

DMCC was founded in 2002 with the goal of giving businesses dealing in commodities like gold, diamonds, and precious metals access to a top-notch business environment. Financial services, technology, and healthcare are just a few of the additional industries that DMCC has widened its focus to include over time.

IFZA, or Authority for International Free Zones
The new free zone in the UAE known as IFZA was founded in 2018. Its name is "International Free Zone Authority". It can be found in Fujairah, one of the UAE's seven emirates.

A variety of business setup options are available for both domestic and foreign entrepreneurs in the contemporary and adaptable free zone known as IFZA. With a focus on innovation, digitalisation, and sustainability, it aims to provide a productive and affordable environment for businesses to operate in.

JAFZA, or The Jebel Ali Free Zone Authority
Jebel Ali Free Zone Authority, one of the biggest and oldest free zones in the UAE, is known by the initials JAFZA. It was founded in 1985 with the intention of promoting foreign investment in the area and is situated in Jebel Ali, a port town in Dubai.

JAFZA is home to more than 7,500 businesses from 135 nations that work in a variety of sectors, including logistics, manufacturing, trading, and services. The free zone also provides a variety of cutting-edge infrastructure and facilities, such as offices, warehouses, and land for development.

DAFZA, or the Dubai Airport Free Zone Authority
"Dubai Airport Free Zone Authority," as it is known in the UAE, is a free zone that is close to the Dubai International Airport. It was founded in 1996 with the intention of giving businesses engaged in aviation, logistics, and other related industries access to an elite business environment.

Over 1,800 businesses, including those in aviation, logistics, technology, and other sectors, are based in the DAFZA. The free zone provides access to cutting-edge infrastructure, including offices, warehouses, and land for future development.

What distinguishes AFZ, JAFZA, DAFZA, DMCC, and IFZA in the UAE?
These are all free zones in the UAE that offer various benefits to businesses. They do, however, vary in a number of ways, including:

Industry focus: JAFZA has a wide range of industries, including logistics, manufacturing, trading, and services. While IFZA offers a wider range of business activities, including commercial, industrial, and service activities, and DMCC has its roots in the trade of commodities, DAFZA has a specific focus on aviation, logistics, and related industries. A similar emphasis on trading, manufacturing, logistics, and services can be seen in AFZ.

Location: DAFZA is close to Dubai International Airport while JAFZA is in Jebel Ali, a port town in Dubai. While IFZA and AFZ are situated in Fujairah and the Emirate of Ajman, respectively, respectively, DMCC is situated in the center of Dubai. Each free zone has a different location, making it better suited for companies in particular industries or with particular location requirements.

Options for setting up a business: JAFZA provides a number of business setup options, including branch office, free zone establishment, and free zone company. While DMCC offers a wider variety of setup options, including the option to establish as a branch of a foreign company, DAFZA offers a comparable set of choices. While AFZ offers a variety of options, including FZCO, branches, and sole proprietorship, IFZA only offers a single licensing option that covers all business activities.

Licensing costs: The licensing costs for each free zone vary; DMCC is renowned for its relatively high costs, whereas IFZA and AFZ are renowned for their affordable rates.

In conclusion, because each free zone in the UAE has distinct advantages and a specific industry focus, it is crucial for businesses to select the one that best suits their goals and objectives. Businesses can choose wisely where to set up shop in the UAE by being aware of the variations between the free zones.

Our team of lawyers in Persona Finance offer 15-minutes consultations to discuss the Free Zones and explain the process of setting up. Book the consultation in the link.
UAE Legal