Opportunity Awaits podcast Episode Transcript
I set up my free zone company in Dubai, UAE, in May 2023, and it was such a complicated process and there's a lot of research I did. I thought it'd be worth doing a quick episode on the process. I thought it'd be worth doing a quick episode on the process because I'm sure there's lots of people, particularly from the UK, United States, Australia and a few other places around the world where they're not really sure of the process.
And it can get really confusing when you start searching online. So the first thing that struck me was when I was searching how to do this. You just get tons and tons of companies that are offering business set up services for free zones in Dubai, and there's over 40 free zones to choose from in the UAE with 20 of them alone or might be more than 20 just in Dubai.
So there are some that specialise in certain industries, and the cost, depending on where you're looking, can really, really range from anywhere from around like free 3000 dirhams all the way to, you know, 100,000. I've even seen a setup fee with lots in the middle, about 50,000 which is around, you know, around £10,000. I don't know what's that about 13,000 USD approximately.
And that's just a lot of money to set up a company. And there are tons and tons of agencies that are out there offering these services. And I actually was searching for ages and I come across the free zone. I ended up incorporating the company with like setting up the free zone company with directly. I come across them weeks before I realised they were the actual authority who you have to set up the free zone with.
I just thought they were just another one of the many, many companies that are out there who are offering these set up services. So do you need to use an agent in Dubai? Well, I didn't. I may if you listen to the video about a year ago, I did mention about a one of the setup companies where they help people like you set up your businesses in Dubai or anywhere, you know, in the UAE, full stop as a free zone and they charge you a fee for that.
But I wanted to go direct with the authority just because I was seeing this crazy range of prices. And I'm just like, well, clearly there's even some of you that are just scamming people and taking money, which is just a scam where it's really low or there's some of you where you're just charging extremely high service fees for the introduction.
And so I just thought, you know what, let me try and find the authority. So that's what I did. Now, how do you choose which free zone to open up your company with, first of all? So that was one of the issues. There are lots of free zones that I mentioned. There's like over 40 in the UAE and some of them specialise in individual things.
And some of these websites that you land on where I've mentioned about these agents, they may appear like they are the actual free zone company, the free zone sort of authority in themselves, but they're not. But they will lead you to believe they are and there were tons of them that I saw with an absolute ton of reviews which just look like spam to me.
Really, really fantastic reviews We have like the probably the real ones in the middle, which were absolutely horrendous. But anyway, I found the free zone that I'm registered with. Like I mentioned weeks before, I didn't realise that the official body and I literally must have done 15 to 20 hours of research just working out which free zone to pursue and avoided the agents that have those, you know, really shady looking reviews.
On Google reviews, I started seeing like you get like really one really, really bad comment. And then within a couple of days there's suddenly like 50 really positive ones and it's just like probably not real. But in any case, there are some things that you need to pay attention to, things to know. And one of the first things I'd say is being careful of the hidden fees.
That wasn't an issue in my case, but I've seen lots of reviews. Like I said, I did delve into this where agents don't tell you about a number of the fees that you're going to have to pay on the line. And one of the things that I discovered when I set up with the free zone I ended up setting up with, is that that free zone?
Anyway, if you set up for an agent in the future, if you have any issues around the fees or anything like that, you have to go through the agent. You can't go direct to the free zone. I'm sure it's just some agreement that they've got between they're the agents that pass those deals to them. So if you go have an agent, you cannot contact the free zones directly or at least the one that I'm with and that's if you have any issues or concerns you need to go through your agent and they may charge you their own fees, you know, which they may have not disclosed at the outset, but they sort of have got
a hold over you in that sense. Certainly with the free zone that I'm with now, there are lots of business categories and that was one of the most confusing thing. And that really strict. They seem to be really, really strict and specific about what you can and cannot do. You cannot sell within the UAE outside of your free zone.
And there's also potentially issues over this new 9% corporation tax. If you do sell inside your free zone or anywhere in the UAE potentially. So that's not completely clear right now. I will come back to that another point. Once I finally got that ironed out, the corporation tax is not 0% anymore for businesses in Dubai or the UAE.
Full stop. See the video that I did a year ago, which I'll link, which I link to, but it may still be free. Okay, There's a caveat. It may still be free, but I want to make sure I've got hundreds and accurate information before I stop putting that out to you and you start making plans on that. But don't make plans based on anything I say.
Anyway, if you want to close it down, you'll have to pay quite a substantial sum of money. Potentially it might be like £1,000. It could be more to close down the company and some free zones allow you to do the company setup process from abroad as minded others require you actually to be present in the country if he's about to set it up.
Now, if you don't have an office space, there's lots of free zones I've seen where they require you to have an office space, so you must lace an office space even if you don't need it. Like lots of businesses like mine are online. You don't need an office space, and even if you don't need it, they require you to have a lease.
And actually the way that mine was pitched is that you don't require to have a lease. And actually when I did set it up, I did get a lease agreement with it, but I've not paid some extra for that. So it just seems to be something that they've just done to get past whatever the rules are with the government.
So something I did mention about the business categories. So what are the costs with the exchange rate? At the time I paid around £3,700 and that included my establishment card that allows that new company that I have out in Dubai to sponsor foreign workers, including myself. Yes, they have to sponsor me, which if you compare the cost of setting up to the UK, I mean, they're not comparable.
The UK is £13. Yes. One free pounds to set up a company in the UK versus 3700 to set it up in Dubai as a free zone and you're really limited in what you can do in the UK. If you set up your company at £13, you pretty much do what you want with it. In the United States.
Similar thing. I think theirs is like $150 or something like that to set it up, which is still a massive difference from, you know, £3,700. That's about 5,000 USD. It's a humongous sum of money and that's not a one time payment. Even people that is something that you are going to pay on an annual basis. So the way I'm seeing that in my head in justifying that is it's basically like a tax.
That's how I'm saying even though it's not a tax I'm seeing as a tax and I'm seeing as a tax that if that company was in the UK and I was remain resident in the UK, £10,000 profit, I would have paid about that much. So if I make more than about £10,000, probably a bit more than before, I make more than about £10,000 profit, then I'm better off with this company set up in Dubai.
So the application process, how was it? First of all, you've got to select your business category and I mentioned it earlier, it's a bit complicated and they are really restrictive. So with the free zone I set up with, it's free, free of them. So free are included within the fee, but you can choose up to six different business categories on your licence.
Now, some of you who operate businesses in the UK will be saying Yes, but we have six codes, six codes in the UK and yes, we do, but it's a very different thing. You can have an ASIC code right now, you can set up a business selling microphones today and tomorrow. In that same business you could start selling sandwiches if you chose to.
In the UAE, it's not like that. They're very restrictive on what you can do. So there are nonregulated and regulated categories. Regulated categories probably isn't for the vast majority of you. I had to look for some of them. Most of these entrepreneurs that will be listening to this are going to be interested in, and they require specific approval from the government and special licences, which I don't know anything about at all.
So you're in the wrong place if you are looking for a regulated business, but if it's not a regulated company, that's the vast majority of the options on there. There are things like, you know, professional licences for consulting a commercial trading licences for import and export. And if you have categories in both professional and commercial in my free zone, any way you can combine them for an extra fee rather than having to set up a completely separate free zone company.
Some categories require a degree, which is bizarre. Okay. Well, it's not that bizarre. It's not bizarre if you're a vet. Yes. If you're going to set up a veterinary practice and you're going to be the vet, then yes, absolutely. I understand why you would need a degree. However, what I do not understand is if you're a search engine optimisation company, why you would need a degree.
But you do a businessman management degree. Bizarre. I have no idea why, but it that is a requirement. So there are some odd things out there which you can see if you're looking on YouTube, but it's one of those things where you just have to abide by the rules. That's that's their rules. You want to, you know, benefit from the nicer, potentially a nicer lifestyle depending where you live and, you know, much lower taxes, then you've got to abide by the rules and quite rightly, too.
So the application for to my free zone, I thought the application form was really straightforward. And this is one of the reasons why once I realised they were I don't know why I said that so loud, like I was singing. Yeah. Once I realised who who they were and was able to get in contact with them directly and it was like using live chat by the way, I'll speak about that later, but it wasn't that difficult to fit in the rest of the process.
So I'll be honest guys, and I'm sorry if you are an agent or one of these brokers or whatever, but from my experience, honestly, I couldn't have justified having one. Now it just doesn't make any sense. But anyway, that online form is pretty straightforward. You can choose it with or without a residency visa. Now, I didn't really pay much attention to this at the start, but it is quite an important decision to make with the residency visa.
What that allows you to do, it allows you to sponsor yourself, basically that gives you the establishment card so that you can then sponsor yourself to go and live in Dubai or UAE for up to two years at a time. It used to be free. It's now two years on your visa. I decided to do with the visa option and you have to pay an extra fee of about £500 for about $7, $50, something like that.
I don't really know. Like the exchange rates dollars in the UK at the moment. It's been going up and down, but it's around there somewhere and the additional cost of allowing the visa plus the visa costs. Okay, the application form, personally I thought it was pretty straightforward and after I actually finally found out who the authority was that I could go directly with them.
And that was super simple, by the way. And it was, you know, the communication was fantastic. The process was pretty slick going forward. I honestly, having done this now, and I'm sorry if you are in the business of like brokering or setting up these companies for people, but if you are being set up with the free zone I'm with and using a broker and paying a lot more money for it.
Personally, I honestly don't see the point. I don't know what you would have possibly gained from it other than saving yourself probably about an hour of your time to set it up, like to complete all the forms and you can choose the the free zone set up with or without a residency visa. With the free zone I'm with I just I decided to have the with the visa option.
And the reason for that is if you later down the line wanted to add on a visa, you'd have to pay for the visa costs. Like for the visa, the visa costs plus a £500 admin fee, which had about $750, something like that as an admin fee to enable that. So I just thought, well, just in case I do want a residency visa, then I would just pay for it.
Now. I wasn't sure about taking the visa immediately. I thinking about visiting Dubai first because I'd never been that a residency visa. It now gives you two years where you can go and live and work in Dubai and you get Emirati ID and you can do everything there basically. But I'll do a video on that when I get round doing the visa just so that you know what the process is.
So you can choose to get more than a year and get a discount. Now, normally I'm quite you know, I'm the person who will sign up to a year for fee, you know, and there's like a 12 month plan and it'll do like 12 months for the price of ten or whatever. I wouldn't normally do that because I just don't like paying extra money when I don't have to.
But in this case, I had come across a video and I'm going to try and find it because I feel like I probably should, you know, shout her out a bit. It's a British entrepreneur and okay, so I went and found the video, so I'm going to put the link in the show notes and it's a British entrepreneur.
Her name is Mable Goulden. Hopefully I said that right. And she had a bit of an experience with one of these companies. She set up a free zone company initially and paid for a number of years to get that discount. And then I can't remember exactly, but since I watched the video, this video from last year, from 2022, she had some issues with them and needed to set up with someone else.
And basically it was just a waste of money. So I just for let me just air on the side of caution. And yes, even now I plan on being succeeding. Of course, I wouldn't want to sort of dump in five years worth of money when ultimately it might fail. And then I lost all that money. So anyway, I decided on the one year.
So the most confusing part was the share allocation, which is just your liability. So similarly in the UK with a limited liability company or an LLC in the United States or various places around the world, you you are limited by your share capital that you have now the minimum share capital of in for the free zone for at least my free zone company I don't know about the others is 10,000.
I'd which well 10,000 Dereham's which is what £2,000. £2,250 out of that. Yes. It's 10,000 dereham's. It's about it's a minimum of about £2,200 or 2,700 USD. But the recommended minimum is 48,000 dirhams, which is about £10,000 or about to open up in thousand US dollars. And that's if you is if you need to have a partner or investor residence visa.
Otherwise you cannot have it. You can only be classed as like a general manager or some other title in the business. And funnily enough, I might as I mention it, Managing Director, if you want the title of Managing Director, which is normal in the UK, anyone setting up a business become Managing director. If you want that title, and then you have to have a business degree or there was like a certain number of years in an intimate, only recognised corporation, I think like a big corporation.
Bizarre. But again, you know, this is just how it is. But if you want the investor or residence visa, there is no difference to the right to have a visa but yet pay extra for it. So anyway, that's the application form. Honestly, it was straightforward. You know, the most confusing part was the share allocation. If you're not used to what that means.
And by the way, if you're wondering do you have to actually put that money into the bank? No, you only need to put that money into the bank if you want your share certificate. Yeah. Yeah, that's right. So if you want your share certificate for them to print out and actually say these are the shares that you own, you need to have put that money into the bank and the bank can issue a statement to say, yes, they've deposited this money and then no issue of shares typically.
So you'd need that if you're going to do something like selling the business. So something else I just for, it's not basically a right notes here. It's not in my notes right now. But one of the questions it would probably come up around limited liability is, is a free zone company, a limited liability company. Now I searched for that for ages.
And to be honest with you, I couldn't find a real answer. But it was when I dealt with this free zone and the guy switching who I dealt with it been honestly, he's been incredible. He's so helpful. He pointed me to some information and basically long and short of it is. Yes, it is. You are limited to your your share capital.
So, for example, if you end up getting similar to the UK, if you end up getting sued for a shit ton of money because you thought you're limited to whatever you put your share cap to as as your personal liability in the business. So whether that's 10,000 dirhams or 40,000 dirhams or whatever, whatever you, that's what you're limited to.
So the minimum is 10,000. They recommend a minimum of 40,000 if you want an investor slash partners residence visa. Now the payment, how does that work? So I'll be honest with you, I was still a bit nervous at that time about, you know, it's a complete these forms. And the thing that made me nervous was the the freeze.
Some of these free zone pretty much all of them. I've seen their website addresses. They're not official government website addresses, not like govt or anything like that. It's kind of like, you know, the trust that is not quite there. And I was still thinking at this point, am I being scammed? You know, is this the point where I send my money and I will never hear from Sweety or his friends again who've been helping me out on my application and I was a bit nervous about sending the money, I'll be honest about that.
And so I just thought, yeah, they give you the option to pay by credit card with a fee, which is about 2% extra to cover that processing costs. I didn't use a credit card, although I was thinking I was thinking at one point maybe I should be like, you know, a fairly easy way to get my money back if I needed to.
But there's two reasons why I didn't want to use a credit card, the main one being if you pay for it, you've got to pay in dirhams, right? And you know, where did I go? United States. I paid. I pay for something in dollars and I had an extortion fee and he was the conversion rate terrible on my credit card.
They they put an extortionate fee on top of the transaction as well, just for the fact that they it was a foreign transaction. So I was like I'm not doing that. Plus then also paying the 2% for them. So I thought, well I'm not going to do that. So I use wise and it is not an advert for wise.
By the way, why is do not sponsor me and my 201, my 226 followers or whatever I've got wise I've used for a long time, I've used it for paying my virtual assistance abroad, which is what this company is for. This company I've set up in the United Arab Emirates, in Dubai, is a virtual assistant company, and that's what I've set up there.
Now I use wires to transfer the money because once you get the best conversion rate out there, I've used it for a long time to pay my staff. I know it goes really quickly, so I pay my staff, like in the Philippines and it goes super quick. They get it usually within sort of half an hour of notice that next day.
So I knew is going to get there. I paid on Friday, the 5th of May in the afternoon UK time. They don't want weekends every day. And I just like, nope, no work, that's fine. So I paid on Friday afternoon UK time, which was already the evening their time. So they they, they picked that up till Monday. I emailed the proof of payment which is all they wanted.
They didn't want to verify the payment had actually arrived before they move on to the next part of the process and they started work on it on Monday the 7th of May. It only took a few days. Thankfully it didn't take very long. So if you're thinking how long did it take to get set up? Was it weeks?
Was it months? No, it wasn't. My free zone company was set up and all the documents sent to me on Thursday 11th of May and morning and the establishment card was sent to me a few days later. And like I mentioned earlier, the establishment card again, is something I didn't know what it was, so I had to research it and find out.
And our sweetie, he must hate me. I've asked him so many questions, but it's there so that you can sponsor people to come into the UAE for the business. So what documents do you get now? If you're on YouTube, I'm going to show you these. Some bits might be bled out if I don't need to know certain bits of information about me, but they're going to be showed.
So if you're listening on the podcast, hop over to YouTube, the links in show notes anyway, so you can do that, but what documents do you get? So I've got them all saved in case I ever get asked to produce it. So I put it into my phone, I put it onto my laptop and in my cloud, just in case.
I don't know. I've got this like, freakish feeling that something bad is going to happen and they're going to be like, Why are your documents or you're going to go to prison forever. But you guess typical of formation, which is incorporation from the government. You get a trade licence, which shows the business categories. I mentioned earlier that you are allowed to trade in.
You get a memorandum of association, which is same as the UK. It shows the share capital and if you you know how the company will operate, it's just the bog standard version. You get a unit lease agreement. So as I mentioned earlier with this, with this free zone, you don't need to actually take a new lease. I have to pay for it for an office or anything like that.
They just include a unit lease agreement, which I think covers the UAE law. I don't actually have an office. It's a registered office effectively, but I can get offices there and a surprisingly like compared to the price of housing NAB Anyway, that's another story. An establishment card that allows you to sponsor, employ foreign workers. So all of those things, apart from memorandum of association, know what any of them were.
And I had to I'll switch it. Tell me what all of those things men and why the numbers are different on the certificate of formation and trade licence again, I thought they had me off. Are they calling me or something? Because the numbers don't match up. It's really strange to understand, but he just says it's literally always like that, so I've just had to take it.
That is the case. So the share that if I've sort of already touched on, you cannot get shares to occur until you've opened up the bank account and deposit at least the share capital, in my case, 48,000 a day. I think I've put down 50,000 and I need the bank has got to provide proof. Then the bank has got to provide a proof proof to the free zone basically that you have deposited that money and now issue a certificate to you.
So how to open up a bank account in Dubai? Oh, my God. So I haven't quite done it yet. So it is. He thinks you actually can't open up the bank account for the business. As far as I'm aware, you cannot do that without the Emirates ID. So this is where the potential problem was if you chose not to get a residency visa because you might have the option not to early on then realise you can't open up a bank account without getting your residency visa and then you'd have to pay another £500 as a fee, an admin fee plus the cost of the residency visa.
That's why I specifically mentioned it because it is issue. This is where there seems to be masses of problems, like you need Emirati ID and the visa and you need to be in the country to apply for the account. Which is strange because you know, the UAE, they seem so advanced in everything. Like technology is just everything is led by technology there, it looks like anyway.
But then they've got proper old school, crappy banking, you know, old school, sort of like 1990s banking in the UK. And I'm really not looking forward to it. Literally the best banks, the best banks that I could find so far recommended by several UK business owners that I've spoken to on Facebook group Brits in Dubai. And the best one is as been recommended.
The most so far is NDB Bank. Now guess how much work their star rating is on Trustpilot. It's a massive 1.3 stars. I've never seen that in my life. Not for a like a major a company and the highest rating for banks so far that I found a 1.7 stars. So clearly there's a disconnect because the vast majority of people in the in Dubai, particularly are foreigners.
And it's like 85, 90% are foreigners. I would be one, obviously a foreigner, and they've got some like crappy banking way of doing banking. You know, you can literally open up a bank account now and you phone here, like I probably say, no problem, unless it's a business bank, then you can have a problem opening it, which I have done in the past.
Even with the challenger banks. But anyway, it seemed like it's going to be a challenge and so I'm not really looking forward to that. But I'd have to get the visa, I'd have to get a residency sorted out to be able to even open up a bank account there, which is really annoying. But it's going to have to be done if I want a bank account now.
So what about the visas and residency? As I'm losing my voice, I have to wrap this up. I'm going to do another video about these. Okay. Once my visa is issued, I think I'm going to do a video about it. If you're a UK resident now and you get the residents visa in Dubai or anywhere in the UAE, just bear in mind that alone does not automatically mean you're going to pay 0% income tax.
You know, if that not only does it not automatically mean that it's so far from it, the rules are really complex. There is a double tax treaty which is complex, and I've even got my account to do some homework for it. So once he's come back to me on that, I'm also going to be speaking to an accountant in Dubai at some point and the fees they differ massively depending on if you're inside the UAE or outside the UAE when you apply.
Interestingly, it's actually more when you're inside the UAE to apply for a visa than when you're outside the UAE. I think there's some admin fees around changing the visa that you're currently like in there with whatever is a tourist visa wherever you've got. So, yeah, I will do another video on that just because I think that on its own it's going to be a really long topic, a long process and I haven't been through it yet, so I don't know.
Now to wrap this up personally, I'm really glad I'm really glad that I took the time to do the research and find the direct free zone of authority to go directly with rather than using a broker, if only for the fact I can go directly to the free zone if I have issues with them or payments or anything like that, you know, they they're accountable to me for the should the payments and all the costs and stuff that they've already sent to me.
Some of these agents operating out there, they know certainly is my free zone, which actually gets recommended a lot by them. Okay. So I've gone to a number of brokers as well as both of them, and I recommended the free zone. I'm with. You get recommended a lot, but your hands are tied with them if you need any any changes to be done or if they come up with some random fees that you have to pay.
You know, I've been fees that they make up. They can charge you. They may not have told you about for anything to get done. The other thing is there's literally so many bad reviews among literally hundreds and hundreds of what look like fake Google reviews where they seem to take the money and then the people are waiting months to get their company sets up, they're free zone, company sets up, which is crazy.
It literally took me what from can't remember the dates that I put down here. It literally took five days from the point that they picked up my location and proof of payment for them to have it set up and all the documents sent to me. That was me going directly. So honestly, I just don't see the point in using a broker or an agent.
I don't even know what I code. I don't know what you'd call them. What would you call them if you know, let me know. Right. I'm in the notes because I don't know what they call, but I'm calling that broken agent wherever they are and potentially hidden fees. And then there's just loads of reviews about complete fraud where they've taken the money and never heard back from them again and they've not been able to reclaim their money.
So yeah, I'm so glad I took the time to go directly with the free zone. Who knows, maybe I'll go out there and I realise actually I've been scammed all along and they're all fake documents and I go to jail and you never hear from me again. Who knows? But the free zone I'm aware of, honestly, it's not the cheapest, but it's also nowhere near the most expensive.
By a long, long way. You get a lot of freedom with it. You know the pros. You can also set it up when you're not in the country, which is a big thing for people like myself who, you know, I don't want to have to fly to Dubai just to set up the company when it's maybe not the convenient time for me to go.
I've got it set up while I'm still in the UK. The free zone are really helpful. So the account manager assigned to me, a guy called Switty, he was so helpful answering my questions. He was you. Honestly, sometimes it was like live chat. Send me an email. Bang. I get an email back within a few minutes. I'm like, Hold on guy, you are too quick.
Are you a bot? But he's, he's so knowledgeable and really helpful. I never spoke to the guy. Want something on a conference call if he's all banned through WhatsApp but a WhatsApp and email. But yeah really helpful. Couldn't recommend them enough. And if you do want to speak to him directly, let me know. I'll put you in direct contact with him because he was so helpful to me and he said I can park people over to him.
So the process for me was really swift is me sort of held up the visa stage so I wasn't sure if I wanted to go for the visa or not at that point, but I held that up. I've now got the visa issued. I'll mention about that another time and I'll be going to Dubai in June, in June 23, for three weeks just to check it out, you know, see if I like it, see if I when I go and get my full visa issued.
And if you do want to set up, you can be like I said, get in touch in a can of show notes with your name and your email and I'll connect you, direct you, sweetie, you know, so helpful to me, I can't recommend him enough. I also don't speak to anyone else from the free zone, apart from the people who help with the visas and stuff afterwards.
But as the initial sort of point of contact. Yeah, definitely. I would highly recommend them. And the free zone. I've been with and I will definitely send share some footage of being in Dubai. Look out for that. I'll probably put it on my Instagram. So if you're not, follow me on Instagram. Go to Aaron Henry on Instagram Links in Show Notes. Bye.