DOING BUSINESS IN JEBEL ALI IN 2023
Jebel Ali (JAFZA) is the pioneering free zone in the United Arab Emirates (UAE), and more than 7,100 companies have operations there. JAFZA company formation is an ideal, tax-efficient way for entrepreneurs to conduct international business.
| Compare different Jebel Ali entities | LLC | Tax exempt LLC | Public limited company | LLP | Branch office |
|---|---|---|---|---|---|
| Also known as | FZE | JAFZA offshore company | PLC | FZCO | Branch office |
| Best use of company? | All products and services | Holding company | To get pub. funding | Professional services | Specific projects |
| How soon to invoice Clients? | 3 months | 1 month | 4 months | 3 months | 2 months |
| How soon can you hire staff? | 3 months | 1 month | 4 months | 3 months | 2 months |
| How soon can you sign a lease agreement? | 1 week | 1 week | 1 week | 1 week | 1 week |
| How long to supply corporate bank a/c? | 4 months | 2 months | 5 months | 4 months | 3 months |
| How long to supply co. reg / tax numbers? | 3 months | 1 month | 4 months | 3 months | 2 months |
| Corporate tax rate on annual net profits? | 0% | 0% | 0% | 0% | 0% |
| Limited liability entity? | Yes | Yes | Yes | Yes | No |
| Government incentives available? | Yes | Yes | Yes | Yes | Yes |
| Govt approval required for foreign owners? | No | No | No | No | No |
| Res. director/partner/ legal rep. required? | Yes | Yes | Yes | Yes | Yes |
| Minimum paid up share capital? | US$27,250 | US$1 | US$1 | US$136,200 | N/A |
| Can bid for government contracts? | Yes | No | Yes | Yes | Yes |
| Corporate bank account location? | ENBD | NBAD | ADCB | FGB | Mashreq Bank |
| Can secure trade finance? | Yes | No | Yes | Yes | Yes |
| VAT payable on sales to local customers? | 0% | 0% | 0% | 0% | 0% |
| Average total business set up costs? | US$26,245 | US$17,400 | US$26,245 | US$26,245 | US$26,245 |
| Average total engagement period? | 5 months | 3 months | 6 months | 5 months | 4 months |
| Accounting and tax considerations | LLC | Tax exempt LLC | PLC | LLP | Branch office |
|---|---|---|---|---|---|
| Statutory corporate tax payable? | 0% | 0% | 0% | 0% | 0% |
| Legally tax exempt if properly structured? | Yes | Yes | Yes | Yes | Yes |
| Group HQ tax incentives? | Yes | Yes | Yes | Yes | Yes |
| Must file an annual tax return? | No | No | No | No | No |
| Must file annual financial statements? | Yes | Yes | Yes | Yes | Yes |
| Must appoint an auditor? | Yes | No | Yes | Yes | Yes |
| Access to double taxation treaties? | Yes | No | Yes | Yes | Yes |
| WH tax on payments to foreign s/holders? | 0% | 0% | 0% | 0% | 0% |
| Company Registration | LLC | Tax exempt LLC | PLC | LLP | Branch office |
| Res. director/partner/ legal rep. required? | No | No | No | No | Yes |
| Minimum number of shareholders/partners? | 1 | 1 | 2 | 2 | Parent company |
| Maximum shareholding for foreigners? | 100% | 100% | 100% | 100% | 100% |
| Minimum statutory paid up share capital? | US$27,250 | US$1 | US$1 | US$136,200 | N/A |
| Security deposit kept with government? | No | No | No | No | No |
| Shelf companies available? | Yes | Yes | Yes | Yes | No |
| Time to incorporate a new entity? | 3 months | 1 month | 4 months | 3 months | 2 months |
| Can easily convert to a PLC? | Yes | No | N/A | Yes | No |
| Public register of s/holders and directors? | No | No | Yes | No | No |
| Can have preference shareholders? | Yes | Yes | Yes | Yes | Yes |
| Business Considerations | LLC | Tax exempt LLC | PLC | LLP | Branch office |
| Good entity for trademark registration? | Yes | Yes | Yes | No | Yes |
| Can secure an import and export license? | Yes | No | Yes | Yes | Yes |
| Sponsorship by a local citizen required? | No |
| Our Client must travel to UAE? | Yes, for account opening. |
| Temp. physical office solutions available? | Yes |
| You need local resident as bank signatory? | No |
| Can be wholly foreign owned? | Yes |
| The entity will likely be regulated by? | JAZFA |
| Minimum number of directors/managers? | 1 |
| Monthly VAT reporting to the government? | No |
| Sign office lease during incorporation? | Yes |
| S/holder/director docs attested/translated? | Yes |
| Foreign director needs personal tax no.? | No |
| Foreign director needs a residence visa? | No |
| Maximum number of staff allowed? | No maximum number for any entity |
| Expatriate to local staff ratio? | None |
| Residence visa for business owner? | Yes |
| Other useful information | |
| What will be included in my customer sales invoice? | Click link |
| Jebel Ali has signed free trade agreements? | Yes |
| This country is a member of WIPO/TRIPS? | Yes |
| This country is a member of the ICSID? | Yes |
| Average custom duties suffered? | 0% |
| Govt foreign investment approval required? | No |
| Average monthly office rental? (US$/sq m) | 45 |
| Minimum statutory monthly salary? | None |
| Average US$ salary for local skilled staff? | 3,000 |
| US$ deposit interest rate? (1 year average) | 2% |
| Overseas remittance currency controls? | None |
| Banking considerations | |
| Multi-currency bank accounts available? | Yes |
| Corporate visa debit cards available? | Yes |
| Quality of e-banking platform? | Good |
| Crowd funding available in this country? | Yes |
Jebel Ali business setup summary
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Advantages and disadvantages
Advantages of Jebel Ali free zone company registration
- Incorporating in the Jebel Ali Free Zone can be advantageous for our Clients because:
- JAFZA is the world’s largest free zone, which is ideally located within a short distance from one of the busiest airports and seaports in the world. As a result, our Clients wishing to setup a company for product distribution to Europe and Northern Africa will benefit from a JAFZA company;
- Our Clients incorporating in JAFZA will benefit from the first rate infrastructure within the zone. Furthermore, due to its location in Dubai, a JAFZA company will be able to use the city’s highly efficient roadways and railways to transfer the goods within the UAE;
- Following advantages will be afforded to a JAFZA entity: i) 100% corporate tax exemption ii) 100% personal tax exemption iii) 100% import and re-export duty exemption iv) efficient customs authorities and v) free repatriation of capital from the zone;
- A JAFZA company can be completely foreign owned as 51% shareholding by a UAE national is not required. Furthermore, anonymity of directors and shareholders is assured as the UAE public register does not disclose this information. Lastly, there is no restriction on the hiring of expatriate employees in the zone;
- A JAFZA entity can be setup as i) a branch/representative office of a foreign company ii) a free zone company or iii) a free zone establishment. Our Clients may choose one of these entities based on the i) initial investment amount and ii) number of shareholders;
- Alternatively, our Clients may choose to incorporate an offshore company in JAFZA. For setup of such entity, there is no minimum share capital requirement. Also, our Client will not be allowed to rent office space within the zone. However, an offshore entity may conduct transactions within the zone;
- Our Clients will have the option of obtaining the following licenses in JAFZA: i) General Trading License ii) Trading License iii) Industrial License iv) National Industrial License and v) Service License. For information about these, kindly refer to the list of JAFZA licenses;
- All the companies incorporated in JAFZA are entitled to the following facilities i) water and electricity supplies at affordable rates; ii) pre-built modern warehouse facilities; iii) reserved plots of lands for accommodating large-scale manufacturing ventures; and iv) numerous modern office spaces such as JafzaOne that has a “one-stop-shop” approach in providing the businesses to display their success whilst being a part of a vibrant global industrial environment.
Disadvantages of Jebel Ali free zone company registration
- Jebel Ali business has a high minimum capital requirement of Dhs1 million (US$270,000) for a Free Zone Enterprise (FZE), which must be paid up during incorporation. The minimum capital for a Free Zone Company (FZC) and limited liability company is Dhs500,000 (US$136,000);
- JAFZA is the most expensive UAE free zone in which to set up a business. For example, one-off registration fees for a free zone Jebel Ali business setup amount to DHS15,000 (US$4,080). Furthermore, the fee for a General Trading License amounts to DHS30,000, compared to DHS7,000 in Ajman;
- Jebel Ali business setup is time consuming and difficult. International entrepreneurs should budget for five weeks for Healy Consultants to obtain the company registration certificate and operating license. Our staff will assist our Client with JAFZA company registration without our Client needing to travel to the UAE;
- There can be a waiting list for companies requiring office or warehousing space in the JAFZA because of the limited availability of space;
- Companies incorporated within the JAFZA can not independently conduct business within the UAE. In order to do so, the company must either source a local supplier or incorporate an onshore branch office;
- All companies registered in the UAE must i) create and maintain a register of their ultimate beneficial ownership (UBO) and ii) submit UBO data to the relevant registrar or licensing authority.
- Incorporating in the Jebel Ali Free Zone can be advantageous for our Clients because:
Best uses for a Jebel Ali company
- Jebel Ali company is an prime way to legitimately book international profits without paying local corporation tax. A Jebel Ali business is legally exempted from import and export taxes. Furthermore, there is no personal income tax in the UAE.
