Pros and cons of forming a Free Zone company in Dubai

The stability in growth, relaxation in taxes, and modernized business laws are a few aspects that are increasingly attracting people from all around the globe to do business in the UAE. The benefits offered by the free zones have made the company formation in Dubai quite popular. While setting up a new company in the free zones of Dubai is suiting just about every person, incorporating an organization in the free zones can be complex. Here in this article we shall be taking a look at the pros and cons of setting up a business in Dubai.

What are Free zones?

Before jumping to the advantages and disadvantages of forming a company in the free zone areas of UAE, let us first clarify what a free zone is. In order to encourage the inward investment in a p articular business sector and boost trade there, over 30 free zone areas were formed by the UAE government authorities. Out of the 30, the majority of free zones are in Dubai and each of the 30 is governed by an independent Free Zone Authority (FZA).

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Pros of incorporating a Dubai free zone company

  •         One of  the main advantage of incorporating a free zone company is that you can get a complete 100% ownership of the company, regardless of your nationality. Plus you will not have to look for a local citizen of UAE who becomes 51% owner or partner of the company.
  •         The companies in the free zones are entirely exempted from tariffs. This exemption lasts for several years and can be renewed easily.
  •         All of the companies formed in the free zones have an international quality infrastructure and a business friendly environment. Moreover these free zones attain the benefit from the UAE government directly.

 

Cons of incorporating a Dubai free zone company

  •         The primary disadvantages of company formation in Dubai free zone is that you cannot expand your business activity into other markets of UAE and just remain confined with what you started.
  •         Each of the free zone is created for a specific business industry and therefore your company can not therefore operate beyond that scope

Adam Global is a reputed business advisory company in Dubai that can assist you to form a company in a Dubai free zone.