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Overview of Company Formation in Ajman Free Zone

Published on : June 2018
Author(s):Several

Company Formation in Ajman Free Zone

Company Formation in DubaiStrategically constructed at the Arabian Gulf, Ajman Free Zone (AFZ or Free Zone) is the smallest yet the most famous free zone in the country and is capable of serving both eastern as well as the western market. AFZ was recognized in 1988 under an Amiri Decree Number 6 of 1966 by His Highness Sheikh Hamad Bin Rashid Al Nuaimi. The free zone’s proximity to Dubai and Sharjah offers easy access to ports and airport terminals.

The free zone is one of the iconic destinations for establishing the business. However, the industrial activities offered by AFZ steals the show. AFZ has significantly contributed to enhancing UAE’S economy in past several years by attracting investors to undertake varied activities under one license. UAE has acknowledged great development in AFZ companies. Additionally, there is constant development in the area of the free zone which will soon accommodate 9,000 companies.

Advantages of AFZ

In comparison with other free zones in UAE, foreign investment in AFZ has raised continuously without any disruption. The only reason for such tremendous growth is unlimited benefits offered to the establishment that make them distinct. Below are some primary advantages of setting up a company in this free zone:

  1. 100% foreign ownership and no requirement of a local sponsor;
  2.  Free from corporate and personal income tax;
  3. Ease of transferring capital and profits;
  4. Cost-effective;
  5. Free from import and export duties;
  6. State-of-art infrastructure;
  7. Comparatively low prices for leasing;
  8. Unlimited supply of water and electricity at a lower cost;
  9. Easy access to two international airports;
  10. One-stop-shop for all procedures.

Types of Licenses

The first and the foremost stage for a company willing to establish their presence in AFZ must opt for the kind of license they require, considering the activity they wish to undertake. As for options, AFZ offers four types of business licenses as follows:

  1. Trading License: Companies willing to conduct trading activities can apply for this license;
  2. Industrial License: Companies wish to undertake industrial and manufacturing operations must opt for the exclusive industrial permit;
  3. Professional Service License: For companies performing professional services;
  4. National Industrial License: This license is specifically for the companies which meet the below criteria: -
  • Companies must be an LLC (Limited Liability Company) having a local partner holding 51% shares in any GCC countries;
  • The company should undertake a minimum of 40% manufacturing within the free zone.

Business Setup in DubaiAnother quill in the cap of Ajman’s business structure especially when it comes to the company formation in AFZ is the plethora of opportunities regarding ownership as follows:

  1. Free zone establishment;
  2. Free zone company;
  3. Branch of a foreign company;
  4. Branch of a local company.

Companies willing to incorporate their business in Ajman Free Zone, the company has to undergo several steps starting with submitting the application form and obtaining the license. The companies can opt from the list of activities provided by the Ajman Free Zone Authority (AFZA) depending upon the types of business one wish to conduct. Importantly, the procedure of obtaining a trade or commercial license in AFZ will take around 4-5 weeks, subject that the company submits necessary documents on time.

Below table imparts a comprehensive list of documents required by the free zone authority to obtain the license:

Document Title

Free Zone Establishment

Free Zone Company (Corporate Shareholder)

Branch of Local Company

Branch of Foreign Company

Application form

Proof of Trade Name Reservation

 

 

Letter of Intent

Audited Financial report

 

Company Profile

 

Bank statement of past six months

 

 

 

Letter of reference from a bank

 

 

 

Passport copies of shareholders

Power of attorney, specimen signature, passport copy and resume of manager

Personal Information sheet of manager and shareholder

Lease Agreement

Register certificate from parent company

 

MOU and AOA of parent company

 

Board Resolution of Parent Company

 

Appointment letter, power of attorney, specimen signature and passport copy of legal representative

Power of attorney, specimen signature, and passport copy of director

Power of attorney, specimen signature and passport copy of secretary

 

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