5 Tips to Choose the Right Free Zone in Dubai

The recent initiatives introduced by the government make this the best time to set up business in the UAE. For long, free zones in Dubai have attracted entrepreneurs from all over the world. As an expat with a sound business strategy, you may be eager to leverage the ownership and tax benefits that free zones offer. All being said, choosing the right free zone is a prerequisite before you embark on your entrepreneurial journey. With a multitude of free zones in Dubai, choosing the right one can be an arduous task.

To make it easy for you, here are 5 tips to choose the right free zone in Dubai.

Tip #1: Decide Whether an Industry-Specific or a General-Purpose Free Zone is the One for Your Business

Your decision to select a free zone must be based on the nature of your business. Having a clear plan on which specific business activities to engage in will help you choose the right free zone. Free Zones in Dubai can be industry-specific or general-purpose. As an example, IFZA is a general-purpose free zone open to businesses of diverse segments while Dubai Media City, as the name suggests is ideal for the Media & Publishing sectors. A general-purpose free zone benefits you with a diverse client base and may be suitable for those who wish not to be surrounded by competitors.

On the other hand, an industry-specific free zone opens up possibilities for collaborating with companies of similar industries. For example, in a free zone like Dubai South Free Zone, an e-commerce retailer could acquire delivery services of a logistics firm based in the same free zone. Furthermore, such free zones often take up initiatives to educate entrepreneurs with industry-specific knowledge. A striking example is Dubai Internet City, where entrepreneurs have access to training and mentorship programmes related to tech, media, and design.

Tip #2: Pick the Right Business Activity

Choosing a business activity may seem like a no-brainer, since one may think the nature of your business says it all. However, the multitude of business activities permissible within each free zone makes it tricky to select the right one. Selecting the appropriate activity right at the beginning is important because later on offering a service not authorised by your Dubai trade license, attracts the risk of legal action and penalties.

You may consider selecting multiple related business activities. It must be noted that the license cost increases with the inclusion of multiple activities belonging to different categories. Selecting several activities within the same activity group is a cost-effective idea since you won’t be required to pay additional fees. Yet certain businesses may have to engage in activities under different categories and often end up paying a higher license cost. In this case, opting for free zones like IFZA Free Zone may seem ideal, since you are allowed to combine commercial, industrial, and professional activities under a single license.

Tip #3: Ensure the Free Zone’s Location is Ideal for Your Business

Location is an important criterion to be checked off your list before selecting a free zone. The location of the free zone must be suitable for your line of business. The free zone’s connectivity by roads, airports, and seaports must be evaluated. To give an example, if you were to set up an import/export business, a renowned sea-air hub like JAFZA would be the right choice for efficient port to aircraft cargo.While DWTC might be your best choice for a central location, DAFZA may be the most preferable option if you are looking for proximity to the Dubai International Airport. Special attention must be given to the demographics of the region since attracting the right pool of skilled labour and clients is essential. The free zone must be in a region that your employees, suppliers, and customers find easy to commute to.

Tip #4: Check Out the Facilities Offered

The range of facilities offered by a free zone is another important aspect to be focused upon. The facility you choose to set up office must be aligned with your business needs and budget. For instance, if you wish to set up an automobile production company, you may require sprawling warehouses, workshops, and showrooms. As a start-up founder, you may look for affordable co-working options whereas if you plan on expansion, a dedicated office space would be preferable. Most free zones offer a plethora of options for work and storage spaces. Free zones like Meydan Free Zone go a step ahead by offering premium facilities like luxury hotels, racecourses, and golf courses, in addition to office spaces. While having a physical office space is mandatory for most, certain free zones like IFZA are exceptions. DMCC offers physical offices for sale, unlike other free zones which have a ‘for lease-only’ scheme.

Tip #5: Determine the Costs Involved

To get an idea of the overall investment to be made, you must ascertain the costs involved in forming your free zone company. Whether the free zone requires you to deposit a share capital, is something to be figured out. If you don’t wish to deposit the amount, choosing for free zones like IFZA would be advisable which require zero paid-up capital.

The cost of your free zone license depends on the duration, the number of visas you apply for, and the facility you choose for setting up. Moreover, each free zone comes with a different license cost. With so many free zones to choose from, and so many factors influencing the pricing, confusion is bound to arise with regards to the cost. Consider using the cost comparison portal devised by InZone, a leading business setup provider in Dubai. By entering a few details, you can do instant price comparisons for different free zones and place your order for company formation instantly.