Running a business in a free zone

This page provides information about the key steps involved in running a business in a free zone from marketing and advertising to conducting foreign trade and more.
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Furnishing the office and equipping the place with utilities

Office spaces in free zones are either fully furnished; complete with carpet and window shades and ready to move in or partially furnished. After you get your business licence and when you are ready to move in, the free zone authority will enable the connection to utilities and telecommunications.

Free zones provide:

  • Full time, in-house IT support
  • Telephone devices and connections
  • Wireless internet connection
  • High-speed internet access
  • Data network connection
  • IP Telephony

Conducting foreign trade

Customs laws for free zones are different from those for companies on the mainland. According to the official portal of Abu Dhabi Government, certain types of merchandise are prohibited within the free zones and duty-free areas based on their nature or origin.

Prohibited goods are the goods which the country prohibits their import or export by virtue of provisions of the Unified Customs Law of the GCC countries or any other relevant law. Importing, storing or transporting any items classified as prohibited are punishable offences by law.

Merchandise that is prohibited within the free zones and duty-free include:

  • Flammable merchandise, excluding fuels necessary for operations as permitted by the supervisory authorities of the area (Free Zone Authority) under the conditions prescribed by the competent authority
  • Radioactive materials
  • Weapons, ammunitions and explosives of whatever kind except by permit from the competent authorities
  • Merchandise that violate the regulations concerning the protection of the commercial, industrial, and intellectual property rights and copyright protection
  • All types of narcotics and derivatives thereof
  • Merchandise originated in an economically boycotted country

According to the website of Dubai Customs, free zone licencees are allowed to import goods or equipment into the free zone from a foreign country without payment of customs duties. Such goods may be stored for an unlimited period depending upon the type of goods and the validity of the free zone licence.

The general provisions regarding customs are:

  • The importer must have obtained a valid importer code from the Customs.
  • Goods must be in conformity with the activity of the licensed company.
  • Goods must arrive in the free zone within 72 hours from the date of the customs declaration.
  • The licencee shall not open, alter or dispense of the goods prior to their arrival in the free zone and customs endorsement.
  • Goods shall be inspected whilst entering the free zone or transferred to the stores.
  • The declarant shall pay a deposit of AED 500 against incomplete documentations if he fails to submit the required documents.

According to the website of DMCC , free zone licencees are allowed to import goods or equipment into the free zone from a foreign country without payment of customs duties.

Customs duty is only paid when goods are moved out of the free zone; that is, imported into the UAE. Numerous warehousing facilities are available in the port for companies that wish to store and re-export their goods. A deposit is payable to the full value of the customs duty, which is refunded on re-export.

List of customs authorities in the UAE:

Laws

Doing business with government

Read about doing business with government.

Complying with laws

As a responsible entrepreneur, you are obliged to comply with laws that

  • govern your business
  • protect labour rights, consumer rights and intellectual property rights
  • protect health and environment and ensure safety
  • govern the free zone in which your business is set up in

 

Laws governing your business

Your business will be governed by the free zone authority in which your business is set up and in some cases might be additionally governed by another government entity. Specific laws relating to the type of business activity you conduct will also govern your business.

 

Laws protecting labour rights, consumer rights and intellectual property rights

The UAE has specific laws to ensure protection of labour rights, consumer rights and intellectual property rights. Links to the important laws is provided below. As a business owner, it is your responsibility to keep yourself updated and comply with these laws. Failure to comply with the laws could attract penalties as decided by the respective laws and competent courts.

 

Laws and regulations

 

Complying with health, environment and safety regulations

Read about complying with health, environment and safety regulations.

 

Laws governing the free zone in which your business is set up in

The following laws govern free zones in the UAE:

 

Federal

 

The emirate of Abu Dhabi

 

The emirate of Dubai

  

The emirate of Sharjah

 

The emirate of Ras Al Khaimah

 

The emirate of Umm Al Quwain

 

  • Trading regulations in Fujairah - the official portal of Fujairah government

    • FAQs

    Must the businessman buy the office space?

    You don't need to buy office space. You can lease it.

    Can a free zone company do business on the mainland?

    Free zones companies are regulated by the local government in each respective emirate. Hence, each free zone has its own set of procedures and restrictions.

    In general, a company registered under a respective free zone is not permitted to carry out business outside the free zone, i. e. on the mainland.

    However, if the company wishes to extend its business to cover the mainland , it has to get an initial permission from the respective free zone authority. Then, the company must approach the local Department of Economic Development in the respective emirate for fulfilling licensing requirements.

    Updated On :

    29 Oct 2024

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