Jebel Ali Free Zone (also known as Jafza) is located in the United Arab Emirates. This free zone creates favorable conditions for start-ups and entrepreneurs in different spheres through the years. It provides favorable options for dynamic business growth thanks to the absence of restrictions on foreign proprietorship, capital repatriation, through numerous incentives, including tax, etc. If you wish to form a company in Jafza, this business decision can make available these advantages of the jurisdiction.
Advantages of the Jurisdiction
Company setup in Jafza may be a beneficial option in view of the next advantages it offers to foreign investors:
- dynamic trading system
- access to a large market (around 3.5 billion people)
- high level of asset and investment protection
- low tax burden and plenty of incentives
- comparatively low operational costs
- zero restrictions for employment of foreigners
- sufficient level of confidentiality
- highly-developed infrastructure
- no restrictions applied to the repatriation of capital
- zero currency restrictions.
Major Forms of Legal and Business Presence
If you wish to registrate a company in Jafza or become present in any other way, this can be arranged in one of the following variations:
- Free Zone Establishment – an option that allows a foreign investor (single shareholder who may be a natural or legal person) to conduct commercial activities in Jafza remaining liable for the results of entrepreneurial activity solely within the funds invested. The establishment has its own legal personality that is distinct from such a founder.
- Free Zone Company – a body corporate that is allowed to be established by 2 natural and/or legal persons (but up to 50). Its shareholders are not liable for the results of its commercial operations over the amounts invested. There are no demands concerning the minimum paid-up statutory capital for this type of body corporate in Jafza. But, it still has to be sufficient to the scope of activities that enterprise intends to undertake.
- Public Listed Company – a body corporate that offers its shares for subscription to the general public without any restrictions and doesn’t limit the transfers of such in any way. It can be formed by two or more shareholders who remain liable for the results of this entity's performance within the funds contributed to such an entity only. This firm has its own legal personality and is legally separated from its stockholders. There are no compulsory to follow demands for the minimal paid-up statutory capital for a public listed company. But, it also has to be sufficient to the scope of activities this enterprise intends to conduct.
- Branch – a non-resident enterprise may start doing the same commercial business activities in Jafza it is authorized to perform abroad. Registration is required for a non-resident company to start operating in Jafza. The branch will operate under the business name of a parent enterprise then.
Registration Requirements and Steps
The procedure of establishing a company in Jafza usually covers these approximate stages:
- Defining your commercial priorities you intend to realize while carrying out business activities in Jafza.
- Choosing and registering a business name for your future enterprise.
- Collecting details about the legal entity’s founders, beneficiaries, and officials.
- Arranging the registered business address for the future company.
- Drafting and formalizing statutory and other registration documents.
- Submitting the set of required documents for the registration.
- Registration for tax and social security purposes.
- Opening a corporate bank account.
- Obtaining licenses for certain types of commercial activities.
The registration process may vary taking into account the background and scope of business transactions a foreign investor intends to carry out in Jafza. Prifinance lawyers can consult you precisely on the matter.
Legal and Regulatory Framework
The local legal framework is tightened to create advantageous conditions for investments and business growth. 100% foreign proprietorship is allowed in this free zone. It is not required to involve a local resident as a business partner to form a company in Jafza.
The procedure of establishing a company is easy and straightforward here. Legal conditions for arranging and completing this process are not bureaucratized. This process shall be conducted and completed in line with the Jebel Ali Free Zone Rules and the Jebel Ali Free Zone Offshore Companies Regulations.
There are 3 main categories of licenses in Jafza: trading, industrial, and service license. To speak precisely, there are next variations of licenses existing in this free economic zone:
- trading license is provided for carrying out import and export operations as well as distribute goods indicated in the license provided;
- general trading license enables carrying out a wider scope of trading operations with an extensive range of items listed in this license;
- service license authorizes a holder to render services indicated in the granted license;
- industrial license is suitable for conducting the import of raw materials, manufacturing operations, and also export of the ready-made products abroad;
- logistics license is granted for carrying out specific types of logistics-related operations (storage, distribution, transportation, sorting, clearing, forwarding, order and inventory management, etc.);
- e-commerce license is provided for arranging the sale and purchase operations of goods via electronic networks.
Jafza is open for doing business by foreigners in many variations. Here are the most widespread options as examples for interested foreign investors:
- All kinds of trading activities
- Project management
- Waste management
- Transport, sea cargo, and freight forwarding services
If you need more precise consultations about how to start doing these types of activities in Jafza or keep in mind some other commercial transactions to carry out, our professionals are ready to assist you with investigating business opportunities available in your concrete case.
Taxation in Jafza
If you intend to form a company in Jafza, it is possible to get the following tax benefits this jurisdiction offers:
- Corporate income tax – 0% (for the subsequent 50 years)
- Personal income tax – not applicable
- Value-added tax – not applicable in most cases (for trading operations with the UAE mainland a 5% VAT rate may be applied)
- Withholding tax – not applicable
- Capital gains tax – not applicable
How Prifinance Lawyers May Support You
If you have decided to set up a company in Jafza, Prifinance lawyers are ready to assist you in this course by developing an individualized business registration plan and supporting the next operation of a newly-formed entity in Jafza. Lawyers who have successfully closed more than 11,000 projects associated with the registration of companies worldwide are ready to help you with maximizing the business benefits in your case as well.