Setting Up in the UAE? Is the International Free Zone Authority (IFZA) the Best Option for You?
Updated: Jul 27, 2020
There is a huge variety of options for setting up a business in the United Arab Emirates - including onshore and in free zones such as ADGM, DIFC, DMCC, DWTC, Fujairah Creative City, RAK and SHAMS (which we wrote a blog on a while ago). The number of free zones in the UAE changes almost constantly but there are currently 40+. One of the newest and definitely most cost-effective free zone option is International Free Zone Authority (IFZA), which is based in Fujairah.
Presiding over 1,450 sq. km, Fujairah is the only Emirate that is located completely on the eastern coast of the UAE along the Gulf of Oman, with its shores extending 70km along the Gulf of Oman. The ‘Fujairah Plan 2040’, which sets out the development of Fujairah by adding new terminals for oil, marine services, dry bulk and containers with an anchorage area in the port, as well as an expansion of Fujairah airport apron and runway along with the relocation of the cargo terminal and airport, will ensure Fujairah has a bright and buoyant future. Fujairah is one of our personal favourite Emirates because it's where The Bench was set-up in 2016 primarily due to Fujairah Creative City being the first UAE free zone to allow virtual law firms.
Having helped 3 clients set up in IFZA in the last month alone, we thought it was a good time to write a blog on some of the pros and cons of setting up in IFZA so you can assess if it might be the right choice for your UAE start-up.
Currently one of the cheapest set up options in the UAE (starting at AED11,500 (approx US$3,131) for a company without visas and AED 15,700 for 1 visa). Until the 31 July 2020 IFZA are offering a discount of 20% on 2 year licences, 30% on 3 year licences and a whopping 50% on 5 year licences.
Currently offering a Residency Visa Free for Life (offer valid until 31 July 2020). Cost of a visa is normally AED 3,750 for 3 years (excluding medical tests and Emirates ID costs).
It allows virtual companies i.e. no mandatory requirement for a physical office.
Quick registration process and fairly easy to deal with.
100% foreign ownership of business permitted (common to all free zones).
No capital requirement.
PRO and support services available.
Flexible business packages and licence categories (unlike some free zones which are tailored to certain specific sectors) including (i) Consulting & Services (ii) Trading (iii) General Trading and (iv) Holding Company.
A fairly flexible approach to certified copies of international shareholder documents.
Currently no mandatory health insurance in Fujairah (unlike Dubai).
They have an office in Dubai (Motor City).
The standard form Articles of Association are subject to the exclusive jurisdiction of the ADGM courts.
As with all free zones, you can only do business from within the freezone.
At the time of writing, the actual physical freezone is still being constructed (so maybe not the best choice if you do want a physical office to work from).
IFZA entities cannot own property or cars in some other Emirates such as Dubai (unlike some of the other free zone companies).
Any physical imports should go into Fujairah Port – otherwise a NOC is required to ship to other Emirates.
There is a requirement to submit audited accounts upon request from IFZA.
The Bench is a duly authorised partner of IFZA and therefore able to assist with the set-up including certifying copies of shareholder documents etc. If you would like more info on IFZA or would like to discuss the most suitable option to set-up in the UAE please contact your usual lawyer at The Bench or email us at firstname.lastname@example.org.