The prospect of company formation in the UAE has gained fresh momentum in 2021 due to the rise in the number of foreign investors. As per the data from National Economic Register (NER), the total number of companies operating in the UAE free zones grew by 4.4% to around 60,600 by the end of mid – February 2021, as opposed to the same period last year. The numbers show the foreign investors’ renewed interest in business setup in UAE free zones.
The majority of foreigners prefer setting up a company in the free zones, mainly due to the ease of licensing procedure and full ownership. All the free zones in the UAE encourage the investors to directly approach the free zone authority to open a company. So, a pertinent question arises: whether you need business setup consultants in the UAE to open a free zone company? The answer to the question can be found by analysing the drawbacks of approaching a free zone directly for starting a business in the UAE. Let’s explore further.
Finding the Right Free Zone is a Tough Process
There are more than forty free zones in the UAE, and over thirty of them are located in Dubai. Each free zone has its own features, benefits and cost structures. Also, foreign investors sometimes choose between industry specific-free zones (DSO, Dubai Media City, Dubai CommerCity etc.) and general-purpose zones (DMCC, DAFZA etc.). Identifying the right free zone that matches the business purpose is crucial for foreign investors.
If the free zone doesn’t fit the investors’ business objectives, it would have a lasting impact on the company’s operations. A foreign entrepreneur who is unaware of the unique features, pros and cons of the free zones can’t make the right choice without expert assistance. On the other hand, business setup consultants in Dubai can draw comparisons between different free zones so that investors can make informed decisions. The consultants can advise the entrepreneurs on business activities, cost structure, licenses, and the facilities available in each free zone. Foreign investors who decide to go solo for company formation in Dubai free zones can’t get such robust consultation.
Free Zones Don’t Offer Personalised Advice on Activity
Before walking into any of the free zone offices, you need to be aware of the business activities suitable for your company. The officials at the free zone may brief you about the business activities provided by the free zone, but the choices are limited in this situation. On the other hand, a business set-up consultant would listen to your business idea and recommend the ideal business activity. The consultant can also guide you about the free zones that provide the activities and the matching facilities. The inability to receive personalised advice on business activities is one of the drawbacks of going solo for company formation in UAE free zones.
Free Zones Not a One-stop Solution
Services offered by free zones to the investors are restricted to licensing and incorporation. The customer centres at the free zone offices facilitate a quick company formation in the UAE for foreign entrepreneurs. However, the inability to provide a one-stop solution for the investors is a drawback of directly approaching a free zone for company incorporation in Dubai, UAE.
Business setup consultants in Dubai provide a range of services posts the completion of the incorporation process. If you register a free zone company in Dubai through business setup advisers, you get services such as accounting & bookkeeping, VAT registration & VAT return filing, audit, trademark registration etc. Unlike in the past, many company formation specialists now offer all such services that are essential for successfully running a company in the UAE. In this respect, obtaining a license through business setup consultants is advantageous than going directly to the free zones.
Free Zones Don’t offer Consultation on Legal Matters
The UAE government has introduced a host of positive legal reforms that the investors are required to comply with while doing business in the country. Economic Substance Regulations (ESR), Ultimate Beneficial Ownership (UBO), and Anti-money Laundering (AML) are some of the mandatory regulations that were introduced in recent years. In the case of ESR, the investors need to check whether they are an exempted licensees or not. If not, they need to meet the mandatory requirements for which expert assistance is required.
In the case of UBO, the companies need to identify the ultimate beneficial owner and should maintain a Real Beneficiary Register (RBR) in their office. Failing to comply with ESR and UBO regulations attract hefty penalties and other serious consequences. Free zone authorities would require you to comply with such obligations, but the service centres at the free zones won’t offer any consultation on such matters. An investor who incorporated a free zone company through consultants gets an advantage here. The business setup consultants in the UAE will assist you in filing ESR notification, ESR Reports, AML training and maintenance of RBR.
Work with the Best Business Setup Consultants in Dubai, UAE
Foreign investors prefer to initiate business setup in the UAE free zones to enjoy benefits such as 100% ownership, robust infrastructure, total repatriation of capital and fast licensing procedures. Many entrepreneurs who are clueless about the rules, regulations, terms and other procedures directly approach a free zone of their choice without proper research. The regulations and facilities in each free zone differ, and therefore the investors require expert assistance from the best business setup consultants in the UAE, such as Jitendra Business Consultants (JBC).
JBC’s business setup advisers in the UAE provide consultation on the pros & cons of each free zone to help the entrepreneurs select the right zone for their business. By availing of JBC’s business setup services in the UAE, entrepreneurs get value-added services that free zones can’t offer, such as accounting, audit, VAT return filing, trademark registration etc. JBC also assists the companies to ensure compliance with mandatory regulations such as ESR, AML & UBO. In short, business setup in the UAE through consultants has more advantages than approaching the free zones directly to incorporate a company.