DAFZA Company Formation in Dubai, UAE

Get the details about company formation in DAFZA Free Zone

Email address: request@dubai-freezone.ae

Phone number: +971 (4) 425 6062

Office hours: Sunday - Thursday from 9-00 to 17-30

Page content

1. What is Dubai airport free zone?
2. Benefits of doing business in the DAFZA free zone
3. Types of companies and licenses in the DAFZA zone
4. Company Registration Procedure at the Dubai Airport Free Zone
5. The infrastructure of Dubai Airport Free Zone
6. Frequently Asked Questions

What is the Dubai Airport Free Zone? 

Dubai Airport Free Zone (DAFZA) is an area located at the International Airport of Dubai with a special status and preferential tax and customs conditions for foreign entrepreneurs. It was founded by the Government of Dubai in 1996. It provides the best conditions for business development in the fields of aviation, pharmaceuticals, logistics, transportation, jewelry, IT technologies, etc. As of the beginning of 2019, more than 1,600 companies are registered in this free zone.

The close proximity of DAFZA to Dubai International Airport means that 24-hour logistics services are provided here. DAFZA offers foreign investors its modern infrastructure: ready-made offices, premises for small-scale production or storage, and land plots for rent for a period of 15 years to build their own buildings. There is a separate customs office providing customs clearance services for goods in the shortest possible time and other services (registration and renewal of resident visas, licenses, ID cards, etc.); the territory of this zone is guarded around the clock. In addition, a modernly equipped business center, restaurants, beauty salons, a post office, bank offices, a cafeteria, a medical clinic, a travel agency, and parking are located on the territory of this free economic zone. The company formation process at DAFZA airport free zone will take you about two weeks, and most operations can be performed remotely. Taking into account the overall level of ease of doing business in this jurisdiction, we can say for sure that the company setup in DAFZA free zone is a very profitable and promising solution.

Fig. 1 DAFZA free zone at the Dubai International Airport (Google Maps)

All the relevant information about this jurisdiction can be found on their official website: http://www.dafz.ae

Benefits of doing business in the DAFZA free zone

DAFZA, like other free zones in the UAE, has a number of advantages for foreign investors. The main feature of this jurisdiction is its close proximity to Dubai International Airport, where millions of tons of cargo pass through annually. Here are the key benefits of doing business in DAFZA:

• Companies registered in DAFZA can enjoy tax benefits, including 0% corporate tax on qualifying income when they meet the Qualifying Free Zone Person (QFZP) regime under UAE corporate tax law. However, the standard corporate tax rate in the UAE is 9%, which may apply to non-qualifying income or when operating within the UAE mainland.
• DAFZA allows 100% foreign ownership of companies. It should be noted that, as of 2021, UAE law also allows 100% foreign ownership of many types of mainland companies, so the mandatory participation of a local partner is no longer a universal requirement.
• There are no restrictions on the repatriation of capital and profits within the DAFZA free zone. Imports and re-exports of goods within the free zone are generally exempt from customs duties, however, customs duties (usually around 5%) may apply when moving goods from the free zone into the UAE mainland.
• Direct access to the infrastructure of Dubai airport. Logistics Center, 24/7 customs service for fast cargo clearance are at your disposal. These services are provided mainly by Dnata, an Emirati airport services provider.
• Visa for a foreign investor. A foreigner who opens a company here gets the right to receive a resident visa for three years for himself, his family members and employees, who he invites to work in the country. DAFZA visa processing time takes about two weeks, after that a foreigner gets an Emirates ID card. A resident has the right to reside in the country, open bank accounts, rent real estate and conduct business.
• Information on the ownership of companies inDAFZA is not published on the public register, however, companies are required to disclose details of their ultimate beneficial owners (UBOs) to the regulator in accordance with the requirements of the UAE AML and Economic Substance Regulation (ESR).

Thus, if your business is related to logistics, cargo transportation, or you are planning to re-export or trade in the region, you should consider registering a company here.

Types of companies and licenses in the DAFZA zone

According to the local rules, a foreign citizen can register one of the following types of legal entities:

• Free Zone Establishment (FZE) is a company with a single shareholder; the liability of such companies is limited. Companies of this format can operate in the free zone and outside the UAE. Operating in the UAE mainland requires cooperation with a local distributor or the registration of a branch or subsidiary in the mainland.
• Free Zone Company (FZC) is a company with a number of shareholders from 2 to 50; the liability of such companies is limited. Companies of this format can operate in the free zone and outside the UAE. Operating in the UAE mainland requires cooperation with a local distributor or the registration of a branch or subsidiary in the mainland.
• Branch of a foreign company. Branch is the same legal entity as the parent company. A branch of the company is fully owned by the parent company and conducts the same activity, under the same name.

According to DAFZA rules and regulations, any company that conducts business here must obtain a license. There are three main types of licenses: trade, license for the provision of services and industrial license.

• Trading license. This is the most common type of license in this zone. The overwhelming majority of companies have this type of license. It gives the entrepreneur the right to export and import to the territory of the FTZ, to store and sell products. The list of allowed types of goods is stated in the license. The more different positions are on the list, the more expensive is the license.
• Service license. A service license gives its owner the right to provide services that are stated in the license: banking, financial and accounting consulting, etc. Those who plan to engage in the logistics business (working with the sea, air and land cargo, storage, warehousing, transshipment, distribution) need a service license.
• Industrial license. In the free zone, you can rent a premise to arrange the production line. Here you can set up production, import and export finished products. All this can be done with an industrial license.

Licenses in DAFZA are typically issued for one year and are renewable annually, although conditions may vary depending on the type of license and the free zone's policies.

Company Registration Procedure at the Dubai Airport Free Zone

The following sequence represents the procedure for registering a company in DAFZA:

• Collect documents and legalize them;
• Apply for DAFZA authorities;
• Choose an office and other necessary premises for rent;
• Apply for a license;
• Apply for a visa;
• Open a bank account;
• Receive all necessary documents and starting a business.

In order to set up a company the following documents must be submitted to DAFZA’s Sales Department:

When applying documents, please Documents issued outside the UAE generally require notarization, consular legalization or apostille (depending on the country), then certification by the UAE Ministry of Foreign Affairs (MOFA) and translation into English or Arabic if necessary.

It will take from 2 to 4 weeks for a company to complete all the procedures, depending on the specific business.

The infrastructure of Dubai Airport Free Zone

The authorities of DAFZA Free Zone Guide offer its customers offices, premises for small-scale production, storage space, and land plots for building.

In modern DAFZA Business Park, foreign investors can choose an office starting form 25 square meters. Premises for rent are equipped with furniture, telephone, Internet, and everything needed. Every 7-10 square meters of office space entitles an employee to one visa. Offices are rented for one year, after which the lease agreement can be extended.

If you are planning to engage in production, in DAFZA you can rent premises from 350 sq. m for production lines (light industry, assembly, packaging), or warehouses. One company can rent multiple premises if required. Production facilities are equipped with all necessary communications.

In addition to offices and warehouses, DAFZA offers meeting rooms, lecture halls, business lounges, catering services, etc. There are also banks, post offices, cafes and restaurants, a clinic and parking in this free zone.

The authorities of the UAE make every possible effort to attract foreign investors. Besides the fact that they provide excellent conditions for business development in free zones, DAFZA in particular, here you can find lots of consulting companies offering professional assistance in all legal and organizational procedures: choosing the optimal jurisdiction, filing documents, opening a bank account, obtaining licenses and visas. For a reasonable fee, you’ll get rid of numerous troubles, and save your time – consulting companies have well-established contacts and worked out schemes.

Dubai airport free zone gate pass

Dubai Airport provides the airport free zone gate pass. This service allows a foreigner to get access to the airport – registered employees of the company, managers, translators and just visitors can apply for this service and get access to facilities in the free zone of Dubai airport. The service is provided by the airport security department. The cost of this service is AED 10.0.

If you have any questions concerning a company registration in DAFZA free zone, contact our specialists, we will be glad to help you start a business in the UAE. 

Frequently Asked Questions

What are the requirements for authorized capital and company structure in DAFZA?

When registering a company in the Dubai Airport Free Zone, it is necessary to consider the corporate structure and authorized capital requirements. Free Zone Establishment (FZE) companies may have a single shareholder, while Free Zone Company (FZCO)/FZC companies may have multiple shareholders. The minimum authorized capital may be set by the free zone regulator and depends on the type of company and its chosen activity. In some cases, capital must be declared in the incorporation documents, but actual contribution of funds may not be required at the registration stage. The company must also appoint a director and manager responsible for business management and interaction with the free zone administration.

How to open a corporate bank account for a DAFZA company?

After registering a company in the free zone, it is necessary to open a corporate bank account with a UAE bank. Banks conduct compliance and KYC procedures, verifying the business structure, the origin of funds, and the business reputation of the company owners. Opening an account typically requires providing the company's incorporation documents, copies of the shareholders' and directors' passports, a business plan, proof of residence, and a description of the company's activities. Account opening time can vary from a few weeks to several months, depending on the bank and the business structure.

How is taxation structured in DAFZA?

Companies registered in UAE free zones can enjoy tax advantages. According to current legislation, the standard corporate tax rate in the UAE is 9%. However, free zone companies can apply a zero corporate tax rate on qualifying income if they meet the requirements of the Qualifying Free Zone Person (QFZP) regime. Income derived from activities in the UAE mainland may be subject to corporate tax at the standard rate. The UAE also imposes a 5% value-added tax (VAT), which applies to certain types of transactions.

What activities are permitted in DAFZA?

The Dubai Airport Free Zone specializes into international trade, logistics and high-tech industries. Internally, businesses/companies have the right to get licenses for international trade, product distribution and logistics services, IT development, consulting, e-commerce, manufacturing and product assembly. The free zone administration determines a specific list of permitted activities that is already specified in the company license.