Setting up a company in a Free Zone can bring a lot of advantages to business owners. For one, businesses can enjoy a number of privileges and incentives to propel their trade to success, like minimum to zero corporate tax obligations to tolerable laws and policies.
But before you can enjoy these incentives, you need to know first the formation policies allowed and the stipulations that come with it, like:
- Determine the legal type of entity allowed
Most of the Free Zones in Dubai allowed only two kinds of legal and business entity for approval and registration, namely: Free Zone Limited Liability Company (FZ LLC) and Free Zone Establishment (FZE). What make the two legal entity different is the number of stockholders that will be involved in the incorporation. If you are applying for a RAK free zone company formation, it would be best to know what kind of legal entity they allow in their jurisdiction.
- Be careful with your trade name
Authorities and governing agencies handling business setup and company formation are very particular with the trade names that are being registered in their office. In fact, each Free Zone in Dubai permits only certain types of trade names for registration. But the basic policies being implemented when it comes to registering trade names are:
- The trade name should not be previously used by other entities
- The trade name should bear the names of any religion and governing authority and organizations
- Should not violate the public order or morals of the country
- There are certain businesses allowed, depending on the Free Zone
Business owners can set up any types of business in UAE – from technology to manufacturing. But they should set it up in Free Zones that permit such type of business. Before you apply to any company formation or setup, know if your type of business is allowed to be incorporated in the location you are vying for. Ask your business setup consultant about this matter.
- Initial approval is different from registration
Some applicants think that getting initial approval is enough to start their trade. But there are still other steps that you need to fulfill the actual registration. The difference between the two is initial approval is merely the submission of required documents to be screened by the governing offices. Registration, on the other hand, pertains to the application of business licenses. You cannot register your business unless you get an initial approval.
Visit this website for more information about Free Zone.