The pros and cons of establishing your company in a free zone

The free trade zones were established by the government of Dubai around 22 years ago. The objective behind doing so was the capitalization of the UAE market and to bring a revolution in the economic structure of the Emirate. The very first free trade zone to have been established back in the year 1985 was that of the Jebel Ali Free Trade Zone. This initiative literally transformed the industrial control possessed by Dubai in the whole of UAE. Once the free zones were established, the government of Dubai took several steps to lure foreign investors and offered several inducements to them for this purpose.

If truth be told, the establishment of this particular jurisdiction has played a significant role in diversifying the overall market sense. It has created a bench mark that over rules the protocols that were long endured by the country. This has made it possible for Dubai to become more of a business hub in the region. The popularity and the foreign investments that the free trade zones brought in impressed the other Emirates so much that the free zones were established all across them.

Entrepreneurs that had long been considering a Fujairah free zone company registration took the opportunity and established their presence in Dubai right away. Here’s why they grabbed the opportunity:

Benefit #1: No need to partner with a UAE national

To begin with, a majority of foreign investors are interested in establishing their businesses in a free zone for the simple reason that it does not require them to partner with a UAE national. They can easily set their business up without partnering with a local. What this means is that they can retain complete ownership of their business and there is no need whatsoever for them to worry about handing off the majority share of their business to the local sponsor.

Benefit #2: Tax benefits

Another major benefit that operating a business in a free zone has to offer is that businesses acquire tax benefits. The fact is that companies operating within the free zone do not need to pay taxes. This is a major advantage that has lured countless foreign investors to Dubai.

Cons

There are always two sides of a coin. While there are many benefits of establishing a business in a free zone, it has its downsides too. The number one disadvantage is that companies in the free zone are not allowed to indulge in business activities in places other than the free zones themselves. You can check here for more information.