Guide to Set Up a Business in Jebel Ali Free Zone (JAFZA)

There are several benefits to establishing a business in the Jebel Ali Free Zone (JAFZA), including tax breaks, prime real estate, and an atmosphere that is conducive to business. This guide will help you with every stage of starting a business in JAFZA, from comprehending the advantages to negotiating the legal and administrative procedures.

What Is JAFZA?

• Strategic Location

JAFZA is well situated in Dubai, close to Al Maktoum International Airport and Jebel Ali Port. Its strategic position makes it a perfect center for commerce and logistics, enabling companies to reach foreign markets.

• Business Benefits
  • 100% Foreign Ownership: JAFZA permits firms to be fully owned by foreigners, in contrast to several other UAE zones.
  • Tax Incentives: Companies operating in JAFZA are eligible for free import and export tariffs as well as zero corporation tax for a 50-year renewable period.
  • Repatriation of Profits: Capital and earnings may be repatriated without limitations.
  • No Currency Limits: There are no currency limits on how businesses may function.
  • Efficient Infrastructure: Diverse business operations are supported by top-notch facilities and infrastructure.

Features of JAFZA Company Formation

• No Minimum Capital Requirement: Businesses can start without a specified minimum capital investment.
• Registered Agent Requirement: Must have an approved registered agent within the free zone or the Emirate of Dubai.
• Shareholder Flexibility: Requires at least one shareholder, with no maximum limit on the number of shareholders.
• Director Requirements: Must have a minimum of two directors.
• Mandatory Appointments: Compulsory appointment of one manager and one secretary.
• No Bearer Shares Allowed: Bearer shares are not permitted.
• Limited Liability Company (LLC): Companies are formed as LLCs, offering liability protection.
• Tax Exemption: Free from personal and corporate income tax.
• Single Class of Shares: Only one class of shares can be issued.

Permissions for Registering Offshore Companies in UAE

• Professional Contacts: Offshore companies need to manage contacts with lawyers, auditors, accountants, and legal consultants.
• Bank Account: They must open a bank account in the UAE.
• Shareholding: Offshore companies must hold shares in existing or new Free Zone Establishments (FZE), Free Zone Companies (FZCO), or Limited Liability Companies (LLC).
• Meetings: They should conduct shareholder and director meetings within the UAE.
• Property Leasing and Ownership: Offshore companies must keep the leased property for a registered office or own real estate approved by the authorities.
• International Trading: They are permitted to engage in international trading activities.

Types of Licenses and Entities

• Licenses
  • Trading License: Applicable to companies that trade.
  • Industrial License: For use in manufacturing and other related industries.
  • Service License: Designed for companies that provide services.
  • E-commerce License: For transactions conducted online.
  • National Industrial License: For manufacturers with a local ownership percentage of 51 percent.
    
    
• Business Entities
  • FZE (Free Zone Establishment): One owner.
  • FZCO (Free Zone Company): There are two to fifty stockholders.
  • Branch of a Foreign Company: An extension of a current business outside the United Arab Emirates.
  • Branch of a UAE Company: An established business expanding into the United Arab Emirates.

Steps to Set Up a Business in JAFZA

1. Choose a Business Activity and License Type

Choose the right licensing type based on the nature of your business. This choice will affect your company’s legal needs and structure.

• Select a Business Entity

Choose the company entity, a branch office, FZE, or FZCO, that best meets your needs. There are advantages and needs unique to each form of entity.

• Apply For Initial Approval

Send in an application for preliminary permission to JAFZA. This phase entails providing basic information about your company, like the type of business, the name that you would want to use, and shareholder information.

• Reserve a Company Name

Select a distinctive name for your company and reserve it with JAFZA. The name must abide by the naming policies and criteria of the United Arab Emirates.

• Submit Legal Documents

Get the necessary legal paperwork ready and submit it, which could include:

• Shareholder Passport Copies: Copies of each shareholder’s passport.
• Memorandum and Articles of Association: Official records describing the composition and functions of the business.
• Bank Reference Letters: Documents from banks attesting to the shareholders’ sound financial position.
• Business Plan: A thorough plan describing the operations of the company, a study of the market, and projected financials.
• Rent a Space

Select and rent a JAFZA facility that meets your needs. Depending on what you do for a living, you may choose between industrial units, offices, and warehouses.

• Submit a License and Registration Application

Submit an application for a business license and company registration as soon as your premises is leased. This includes:

• Signing the Lease Agreement: Putting the finishing touches on the facility you have selected.
• Final Document Submission: Sending in any more files needed to complete the licensing application.
• Paying Fees: Covering the necessary costs for the registration and issuing of licenses.
• Create a Business Bank Account

In the UAE, open a corporate bank account. This phase is essential for handling funds and carrying out commercial transactions.

• Get Visas

Submit the required visa applications for workers, stockholders, and their families. To make this procedure easier, JAFZA provides expedited visa services.

1. Commence Business Operations

You can start operating your business in JAFZA as soon as you get all the necessary permits and permissions.

Compliance and Regulations

• Ongoing Compliance

Ensuring adherence to JAFZA norms is crucial for seamless functioning. This comprises:

• Annual License Renewal: Make sure your company license is renewed every year.
• Audit and Reporting: Complete yearly audits and turn in necessary financial reports.
• Employment Regulations: Comply with all labor laws and JAFZA’s employment rules and regulations, including those pertaining to visa renewals.
• Legal Assistance

Consider hiring legal and business experts to maintain continuous compliance with JAFZA and UAE legislation and to manage the complicated regulatory environment.

The Jebel Ali Free Zone (JAFZA) offers businesses unmatched opportunities for development and expansion. You may effectively manage the setup process by using this guide to choose the appropriate company and license, get the required approvals, and start up activities. JAFZA is the perfect place for entrepreneurs and enterprises trying to make a name for themselves in the Middle East and beyond because of its advantageous location, strong infrastructure, and business-friendly legislation.