Jafza Free Zone: Business Setup, License & Steps Involved

What is JAFZA FREE ZONE ?

JAFZA Free Zone, or the Jebel Ali Free Zone, is a thriving business hub located in Dubai, United Arab Emirates. Established in 1985, it offers a tax-friendly environment for companies to operate, promoting international trade and investment. With state-of-the-art infrastructure, JAFZA provides a range of business solutions, from warehousing to office spaces, and is known for its strategic location near the world-class Jebel Ali Port. Businesses in JAFZA enjoy numerous benefits, including 100% foreign ownership, zero import and export duties, and easy access to global markets. This dynamic free zone is a preferred choice for entrepreneurs seeking growth and expansion opportunities in the Middle East.

What is JAFZA FREE ZONE License?

The Jebel Ali Free Zone (JAFZA) is one of the largest and most reputable free zones in the UAE, offering a range of business licenses designed to cater to different types of business activities. Here is a comprehensive overview of the JAFZA Free Zone license, including its types, benefits, and costs:

Types of JAFZA Licenses

JAFZA offers several types of licenses to suit various business activities. These include:

1. Trading License: Allows the import, export, distribution, and storage of specific products.
2. General Trading License: Permits trading in a wider range of products, providing greater flexibility.
3. Service License: Suitable for service-oriented businesses, such as consultancies and agencies.
4. Industrial License: Enables the manufacturing, processing, and packaging of goods.
5. E-Commerce License: Facilitates online trading activities, essential for businesses operating in the digital marketplace.
6. Logistics License: Ideal for companies involved in freight forwarding, logistics, and supply chain management.

What are Facilities available in JAFZA FREE ZONE

1. Warehousing Solutions:

• Modern and secure warehouses.
• Flexible storage options for businesses of all sizes.

2. Office Spaces:

• Cutting-edge office facilities.
• A range of office sizes and configurations.

3. Industrial Units:

• Specialized units for manufacturing and production.
• Infrastructure tailored to industrial needs.

4. Strategic Location:

• Close proximity to Jebel Ali Port for global trade access.
• Efficient transportation networks for seamless logistics.

5. Business Benefits:

• 100% foreign ownership for international investors.
• Zero import and export duties, reducing operational costs.
• Full repatriation of profits.

6. Comprehensive Infrastructure:

• Robust logistics support.
• Customs services for easy clearance.
• State-of-the-art communication and utility services.

7. Supportive Ecosystem:

• Regulatory environment conducive to business growth.
• Streamlined administrative processes for efficiency.

Company Registration in JAFZA

Registering a company in the Jebel Ali Free Zone (JAFZA) involves several steps, each requiring meticulous attention to detail. Here’s a comprehensive guide, supplemented with additional insights to ensure a smooth registration process:

1. Choose the Legal Entity and License Type

The first step is to determine the legal entity and license type that best aligns with your business model, activities, and the number of shareholders. JAFZA offers various license types, including Trading, Service, Industrial, Logistics, and E-commerce licenses. The choice of legal entity can be a Free Zone Establishment (FZE), Free Zone Company (FZCO), or a Branch of an existing company.

2. Prepare and Submit Required Documents

Next, gather the required documents according to JAFZA’s regulations. These typically include:

• Passport copies of shareholders and directors
• Business plan
• Memorandum of Association (MOA) and Articles of Association (AOA)
• Lease agreement
• Application form

Submit these documents along with the completed application form and pay the necessary fees. It's essential to ensure all documents are correctly attested and notarized where applicable.

3. Sign the Lease Contract

Sign the lease contract for the chosen free zone premises. The lease can be for office space, warehouse, or land, depending on the nature of your business. Submit the signed lease contract to JAFZA authorities to proceed with the registration.

4. Receive Incorporation Documents

Once your application is reviewed and approved, JAFZA will issue the incorporation documents. These include the trade license, Certificate of Incorporation, and other related documents necessary for legal operations in the UAE.

5. Undergo Medical Checkup and Apply for Residence Visa

All expatriate employees, including shareholders, must undergo a medical checkup and apply for a UAE residence visa. The medical checkup includes a blood test and X-ray. Once the medical results are received, submit the visa application to the immigration authorities.

6. Wait for Emirates ID Card

After the residence visa is stamped in your passport, you will need to apply for an Emirates ID card. This card is mandatory for all residents in the UAE and is used for various purposes, including government services and banking.

7. Apply for a Corporate Bank Account

With your incorporation documents and Emirates ID, apply for a corporate bank account in a UAE bank. The approval process can take up to a month, during which the bank may request additional information or documents.

8. Start Your Business Operations

Once the bank account is approved, you will receive your account details. With this, you can begin your business operations in JAFZA. Ensure compliance with all JAFZA regulations, including annual audits and renewals of licenses and visas.

Additional Insights and Tips

Choosing the Right Business Setup Package

JAFZA offers various business setup packages tailored to different business needs. These packages can include office space, warehousing, and industrial units. It’s crucial to choose a package that aligns with your business requirements and budget.

Advantages of Setting Up in JAFZA

JAFZA provides several benefits, such as 100% foreign ownership, no personal income tax, and no restrictions on capital repatriation. Additionally, JAFZA's strategic location near Jebel Ali Port and Al Maktoum International Airport offers unparalleled logistical advantages for global trade.

JAFZA Freezone License Costs and Associated Fees

Jebel Ali Free Zone (JAFZA) offers a variety of licenses for businesses looking to set up in one of Dubai's most prestigious free zones. Below is a detailed list of JAFZA licenses along with their associated costs:

Types of Licenses and Their Costs:

TYPE OF LICENSECOST (AED)Trading License Type 1 (7 categories of products)5,500Trading License Type 2 (12 categories of products)9,000General Trading License15,000Services License5,500Industrial License5,500Logistics License15,000E-Commerce License15,000

Additional Fees Associated with Company Registration:

FEE TYPECOST (AED)Registration Fee5,000Additional Business Activity500 per activityName Approval FeesVariesDocument Attestation CostsVariesEstablishment Card FeeVariesOffice Space RentFrom 1,800 per m²

Estimated Total Costs:

The total cost for setting up a business in JAFZA includes several fees and expenses. For instance, the cheapest company setup package in JAFZA is approximately 52,636 AED. This estimate covers license fees, registration, office space rental, and other administrative costs.

Why JAFZA?

While the overall setup costs in JAFZA might seem higher compared to other free zones in the UAE, the investment is justified by the numerous advantages and opportunities offered:

1. Strategic Location: JAFZA is strategically located near Jebel Ali Port and Al Maktoum International Airport, facilitating easy logistics and trade.
2. Business Incentives: Businesses in JAFZA benefit from a 0% corporate tax rate, no import or export duties, and full repatriation of profits.
3. Comprehensive Support Services: JAFZA provides extensive support services including visa assistance, legal services, and business consultancy.
4. State-of-the-Art Infrastructure: The free zone boasts modern facilities and infrastructure, tailored to meet the needs of diverse industries.

Visa and Residency:

Companies established in JAFZA are eligible for UAE resident visas. The number of visas is determined by the size of the office space rented. For example, one resident visa is provided per 10 m² of office space.

Visa Costs:

• Visa Application (Outside UAE): 2,900 AED
• Visa Application (Inside UAE): 3,470 AED
• Medical Examination and ID Card: 1,120 AED

Renewal and Amendments:

Renewing a JAFZA license involves paying the same fees as the initial registration. Renewal can be done remotely, provided an audit report is submitted annually. Amendments to company details, such as changing the company name or transferring shares, can be processed through a registered agent without the need for the shareholders’ physical presence, except for share transfers which require a notarized power of attorney.

Types of Company in JAFZA Free Zone

1. Free Zone Company (FZCO):

• Offers flexibility in terms of shareholding structure.
• Allows one or more shareholders.
• Ideal for small to medium-sized businesses.

2. Free Zone Establishment (FZE):

• Suited for a single shareholder, whether an individual or a corporate entity.
• Provides complete control over the business.

3. Branch of a Foreign Company:

• Allows international companies to extend their presence to JAFZA.
• Retains a separate legal identity from the parent company.

4. National Industrial License (NIL):

• For companies involved in manufacturing or industrial activities.
• Enables businesses to benefit from the UAE's strong industrial infrastructure.

5. General Trading License:

• Allows companies to engage in a wide range of trading activities.
• Suitable for businesses focused on import and export.

6. Service License:

• Designed for businesses offering services, consultancy, or professional services.
• Provides a platform for a broad spectrum of service providers.

7. eCommerce License:

• Tailored for online businesses, including retailers and e-commerce platforms.
• Supports the growing digital economy.

8. Offshore Company:

• For non-resident investors looking for international asset protection and wealth management.

List of JAFZA Licenses AND Activities

1. Trading Licenses:

General Trading License: Allows import, export, and trading activities.Specific Trading License: Tailored for specialized product categories.

2. Industrial Licenses:

National Industrial License (NIL): For manufacturing and industrial enterprises.General Industrial License: Covers a wide range of industrial activities.

3. Service Licenses:

Service License: For businesses offering professional and consultancy services.Commercial Service License: Suitable for commercial service providers.

4. eCommerce Licenses:

eCommerce License: Designed for online businesses, including e-commerce platforms.ePayment Gateway License: Facilitates online payment processing.

5. Offshore Licenses:

Offshore Company License: Ideal for non-resident investors for asset protection and wealth management.

6. Financial Licenses:

Banking License: Permits banking activities within the free zone.Financial Consultancy License: Enables financial advisory services.

7. Industrial and Logistics Activities:

Warehousing and Distribution Activities.Manufacturing and Assembly Operations.

8. Retail Activities:

Retail of General Consumer Goods.Luxury and Fashion Retail.

9. Energy and Environment:

Renewable Energy Equipment Manufacturing.Environmental Consultancy.

10. Media and Entertainment:

Media Production and Distribution.Events Management and Promotion.

Benefits of starting Business in Jafza

1. Tax Benefits: JAFZA provides a tax-efficient environment with zero import and export duties, offering substantial cost savings for businesses.
2. 100% Foreign Ownership: Foreign investors can retain full ownership of their businesses, eliminating the need for a local partner.
3. Strategic Location: Situated near the Jebel Ali Port, one of the world's largest container ports, JAFZA provides easy access to global markets, facilitating international trade.
4. World-Class Infrastructure: State-of-the-art facilities, including modern warehouses and office spaces, ensure that your business operates efficiently.
5. Simplified Setup: JAFZA streamlines administrative procedures, reducing bureaucratic hurdles and expediting the company formation process.
6. Diverse License Options: JAFZA offers a range of licenses tailored to different business activities, accommodating various industries.
7. Access to a Vibrant Business Ecosystem: Your business can thrive alongside global industry leaders, fostering collaboration and growth opportunities.
8. Legal Protections: The legal framework in JAFZA offers security and protection for investors.
9. International Recognition: JAFZA is renowned globally, enhancing the credibility of businesses operating within its jurisdiction.
10. Supportive Regulatory Environment: JAFZA authorities work to facilitate the success of businesses, providing a welcoming atmosphere for entrepreneurs.