Since a UAE citizen must be a partner and hold 51% of the company's equity, many businesses are reluctant to invest in the UAE. As a result, freezones, which allow for 100% foreign ownership, have grown to be a preferred method of business registration in the UAE.
A freezone, often referred to as a free trade zone, is an exclusive area with no taxes and few trade restrictions where goods can be produced, imported or exported, handled, or modified without having to pay customs fees.
Free trade zones are often placed in strategic geographic areas, such as close to international airports, major seaports, and national borders, to maximize commercial advantages.
The government of UAE has developed several freezones across the nation, each of which is designed for a certain kind of business.
Non resident businesses can profit from UAE free trade zones' single window administration, lack of bureaucratic red tape, and 100% ownership.
There are around 44 free zones in the United Arab Emirates that have attracted foreign direct investment and boosted the country's GDP.
It is usually advised to the business owners operating in any freezone to conduct their banking activities via a separate freezone business account. Thus in this blog, Dhanguard will extensively discuss how to start a freezone business account in the UAE. So without any further ado, let’s learn!
What are the Advantages of Freezone Bank Account?
Starting a freezone business account is a wise decision for your business for a variety of reasons.
With a freezone business account, you can:
Facility of Multiple Accounts and Variety of Currencies
Many banks in the UAE provide the facility of having multiple freezone business accounts under the name of a single business owner. Also the account holder has the benefits of depositing and making transactions in any currency as there are no currency restrictions implied by the banks.
Protection of Personal Information and Confidentiality
With a freezone business account, the account holder gets the assurity that his/ her business, details, account information, and personal details will remain confidential.
Guarantee of Safe transfer of Funds both locally and internationally
With the help of a freezone business account, you can safely transfer the funds both in the UAE as well as out of the UAE to another bank account without the risk of getting your funds misplaced.
The Advantage Zero Taxations
No amount of tax will be levied or charged from you, when you make use of a freezone business account to make a transaction. This is the most enticing advantage which lures business owners to start a freezone business account.
Access to International Banks and their facilities along with ATM services
A freezone business account empowers you to take the benefit of exclusive services provided by other renowned international banks and their ATMs.
Access to Loans
When you are a freezone business account holder and an instance may arise where you are in need of extra funds, then you can easily apply for a personal, business or any other type of loan, and you will get the loan without any difficulty.
Unlimited Credit Card Facilities
When you have a freezone business account, you can avail a wide array of benefits that comes with the credit card that you will receive along with it. There are no restrictions to purchase options of the credit card over the Account Holder of the freezone business account.
Documents required for opening a Free Zone Business Bank Account
Memorandum Of Association/Article Of Association
Passport, Visa & Emirates Id of all partners (if applicable)
Office Tenancy (Physical office)
6 months bank statement (Personal/company from UAE/Home country.)
Utility Bills as address proof
Business Model/company profile/ Website
Customer Profile (CV)
Name of existing or prospective clients (suppliers/buyers)
Invoices /Bill of Lading/Shipping documents/ Agreements/ Custom Clearance etc.
Proof of Physical presence
It is not possible to open a Free zone Bank account remotely with UAE banks as it is a requirement of the Central Bank that you have to be present physically while opening your Free zone Bank Account. In case change or amendment is made in the original documents of the Company, the same will be notarized and attested by that respective Free zone. There might be few more documents required depending on which bank you want to open your Account.
Why should you choose a Freezone for your Business?
Foreign investors are allowed to own 100% of their companies in free zones.
Complete Profit Repatriation
Companies operating in free zones are permitted to bring all of their profits back home. As a result, they are free to move all of their assets, 100% of their capital, to their nation of origin.
Zero Currency Restrictions
The freedom from currency restrictions is one of the key advantages of operating in a free zone in Dubai. Government-imposed restrictions on the exchange of foreign currencies are known as currency rules. There are no limitations of any kind on cash in UAE free zones. Thus, it makes financial transactions easier and more convenient.
No Logistical Hindrances
The UAE's free zones feature a lot of warehouses and enough room for offices. For SMEs and start-ups, free zones in the United Arab Emirates are excellent. Additionally, creating a business in a free zone is a simple and quick process. You can complete the license requirements faster here than in other nations. Additionally, UAE freezones have effective immigration services that save time.
Dubai is home to cutting edge financial intercessions, world-class telecommunication systems, cutting-edge industrial infrastructure, an e-governance system, and service industries. The location of the free zones makes for a very economical way of life.
Dubai has a multicultural population and offers chances for you to network with a worldwide business community.
No Corporate or Import/ Export Taxes
According to UAE law, businesses that are established there are not required to pay corporate tax on their sales, allowing you to keep all of their revenues. Also Free zones are immune from all customs taxes, unlike the mainland.
Starting a business in a Freezone should go hand in hand with starting a Freezone Business Account. Having a separate Freezone Business Account will provide you many benefits as discussed above and will make your Banking easier. Connecting with Dhanguard will be the process of setting a Freezone Business Account in the UAE, a painless task. Also our Experts will guide you to choose the most appropriate Bank for yourself. Thus, we hope this blog provided you with insightful information. For more information on other related aspects, feel free to check out our website or visit our head office as well.