Running a business in a free zone
This page provides information about the key steps involved in running a business in a free zone from marketing and advertising to conducting foreign trade and more.
Furnishing the office and equipping the place with utilities
Office spaces in free zones are either fully furnished; complete with carpet and window shades and ready to move in or partially furnished. After you get your business licence and when you are ready to move in, the free zone authority will enable the connection to utilities and telecommunications.
Free zones provide:
- Full time, in-house IT support
- Telephone devices and connections
- Wireless internet connection
- High-speed internet access
- Data network connection
- IP Telephony
Marketing and advertising for the business
After you have setup your business, most of you would market and advertise your business not only to announce the launch of the business but also to get clients. There are certain rules and regulations you need to abide by while advertising in the UAE. In most cases, you would need to take approval of Department of Economic Development. If the signs are to be posted on the road, you will need to take approval of the respective transportation authority. Certain other cases require approval of the municipal authorities.
Useful links:
- Advertising your business - the official portal of Dubai Government
- Marketing your business - the official portal of Abu Dhabi Government
- Signs and advertisements permits - the official portal of Abu Dhabi Government
Conducting foreign trade
Customs laws for free zones are different from those for companies on the mainland. According to the official portal of Abu Dhabi Government, certain types of merchandise are prohibited within the free zones and duty-free areas based on their nature or origin.
Prohibited goods are the goods which the country prohibits their import or export by virtue of provisions of the Unified Customs Law of the GCC countries or any other relevant law. Importing, storing or transporting any items classified as prohibited are punishable offences by law.
Merchandise that is prohibited within the free zones and duty-free include:
- Flammable merchandise, excluding fuels necessary for operations as permitted by the supervisory authorities of the area (Free Zone Authority) under the conditions prescribed by the competent authority
- Radioactive materials
- Weapons, ammunitions and explosives of whatever kind except by permit from the competent authorities
- Merchandise that violate the regulations concerning the protection of the commercial, industrial, and intellectual property rights and copyright protection
- All types of narcotics and derivatives thereof
- Merchandise originated in an economically boycotted country
According to the website of Dubai Customs, free zone licencees are allowed to import goods or equipment into the free zone from a foreign country without payment of customs duties. Such goods may be stored for an unlimited period depending upon the type of goods and the validity of the free zone licence.
The general provisions regarding customs are:
- The importer must have obtained a valid importer code from the Customs.
- Goods must be in conformity with the activity of the licensed company.
- Goods must arrive in the free zone within 72 hours from the date of the customs declaration.
- The licencee shall not open, alter or dispense of the goods prior to their arrival in the free zone and customs endorsement.
- Goods shall be inspected whilst entering the free zone or transferred to the stores.
- The declarant shall pay a deposit of AED 500 against incomplete documentations if he fails to submit the required documents.
According to the website of DMCC , free zone licencees are allowed to import goods or equipment into the free zone from a foreign country without payment of customs duties.
Customs duty is only paid when goods are moved out of the free zone; that is, imported into the UAE. Numerous warehousing facilities are available in the port for companies that wish to store and re-export their goods. A deposit is payable to the full value of the customs duty, which is refunded on re-export.
List of customs authorities in the UAE:
- Federal Customs Authority
- General Administration of Customs, Abu Dhabi
- Dubai Customs
- Sharjah Customs
- Ras Al Khaimah Customs
Laws
- Common Customs Law of the GCC States (PDF, 567 KB)
Doing business with government
Read about doing business with government.
Complying with laws
As a responsible entrepreneur, you are obliged to comply with laws that
- govern your business
- protect labour rights, consumer rights and intellectual property rights
- protect health and environment and ensure safety
- govern the free zone in which your business is set up in
Laws governing your business
Your business will be governed by the free zone authority in which your business is set up and in some cases might be additionally governed by another government entity. Specific laws relating to the type of business activity you conduct will also govern your business.
General laws relating to businesses are:
- Electronic Transactions and Commerce Law
- Commercial Transactions Law
- Federal Law No. 4 of 1979 on Combating Commercial Fraud
- Business laws in the UAE - Abu Dhabi government portal
- Business offences law - Abu Dhabi government portal
- Common Customs Law of the GCC States (PDF, 567 KB)
- Guidelines, laws, manuals and specifications for tenders - the official portal of Abu Dhabi Government
Laws protecting labour rights, consumer rights and intellectual property rights
The UAE has specific laws to ensure protection of labour rights, consumer rights and intellectual property rights. Links to the important laws is provided below. As a business owner, it is your responsibility to keep yourself updated and comply with these laws. Failure to comply with the laws could attract penalties as decided by the respective laws and competent courts.
Laws and regulations
- UAE Labour Law - Ministry of Human Resources and Emiratisation
- Resolutions & circulars - Ministry of Human Resources and Emiratisation
- International agreements - Ministry of Human Resources and Emiratisation
- UAE Trademark Law - the official portal of Abu Dhabi Government
- Protection of Intellectual Property - the official portal of Abu Dhabi Government
Complying with health, environment and safety regulations
Read about complying with health, environment and safety regulations.
Laws governing the free zone in which your business is set up in
The following laws govern free zones in the UAE:
Federal
- Federal Law No. 8 of 2004 Concerning Financial Free Zones (PDF, 100KB)
- Cabinet Resolution No. 28 of 2007 on Implementing Regulations of Federal Law No. 8 of 2004 Concerning Financial Free Zones (PDF, 30KB)
The emirate of Abu Dhabi
- Regulations - Media Zone Authority
The emirate of Dubai
- Laws relating to free zones under Dubai Development Authority
- Laws relating to Dubai International Financial Centre
- Laws relating to DMCC
- Jafza Offshore Companies Regulations 2018 (PDF, 650KB)
- JAFZA Implementing Regulations 2016 (PDF, 45KB)
- Law No. 25 of 2009 Concerning the Dubai International Airport Free Zone (PDF, 75KB)
- Law No. 15 of 2006 on the regulations of free zones and special development zones
Other
- Penalties for Administrative and Technical Violations Clinical and Commercial Activities - Dubai Healthcare City Authority (PDF, 500 KB)
The emirate of Sharjah
- Rules and Regulations Concerning the Incorporation of Free Zone Companies at Hamriyah Free Zone (PDF, 450KB)
The emirate of Ras Al Khaimah
- Rules and Regulations of RAK Free Trade Zone (PDF, 200KB)
The emirate of Umm Al Quwain
Useful links:
- Dealing with legal issues - the official portal of Dubai Government
- Being a responsible employer - the official portal of Dubai Government
- Trading regulations in Fujairah - the official portal of Fujairah government
FAQs
Must the businessman buy the office space?
You don't need to buy office space. You can lease it.
Can a free zone company do business on the mainland?
Free zones companies are regulated by the local government in each respective emirate. Hence, each free zone has its own set of procedures and restrictions.
In general, a company registered under a respective free zone is not permitted to carry out business outside the free zone, i. e. on the mainland.
However, if the company wishes to extend its business to cover the mainland , it has to get an initial permission from the respective free zone authority. Then, the company must approach the local Department of Economic Development in the respective emirate for fulfilling licensing requirements.