Abu Dhabi Free Zones

In UAE free zones, a favorable low-tax policy is implemented, granting companies exemptions from various taxes, such as value-added tax (VAT), corporate tax, and customs duties.

Advantages of Establishing a Free Zone Company in the UAE:

1. Full expat ownership: Expat investors can own 100% of their Free Zone company, retaining earnings and repatriating profits.

2. No income tax: Free Zone companies are exempt from income tax. Corporate tax exemption applies if trade is conducted outside the UAE or if net profits are below AED 375,000.

3. Import and export duty exemption: Free Zone companies enjoy exemption from import and export duties, facilitating smooth international trade.

4. Advanced infrastructure and technology: Free Zones offer cutting-edge infrastructure and readily available technology, providing cost-effective business setup options for SMEs and startups.

The key distinction between mainland and Free Zone companies lies in their operational scope. While a mainland company has the freedom to conduct business activities anywhere in the UAE without limitations, a Free Zone company requires the assistance of a local agent to operate outside its jurisdiction.

As per Article 3 of the law, qualifying income of a qualifying free zone person is subject to zero percent corporate tax (CT). However, any other income of the qualifying free zone person is subject to a nine percent tax, unless the income is exempt or falls outside the scope of taxation.

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No, it is not mandatory to reside in the UAE to establish a Free Zone business. Non-residents can also set up and operate a Free Zone company without the requirement of UAE residency.