Business Setup In Ajman Free Zone (AFZ)

Business Setup In Ajman Free Zone (AFZ) - Smart Zones UAE

Similar to other cities in the United Arab Emirates, Ajman has established a free trade zone to attract foreign investment and enhance its economic growth. This particular free trade zone in Ajman, known as the Ajman Free Zone Authority (AFZA), is strategically positioned at the entrance of the Arabian Gulf. Its inception dates back to 1998 when it was granted a distinct identity by the ruler of Ajman. AFZA gained official recognition through Amiri decree no. 3 of 1996 and has since served as the sole regulatory agency for the Emirate’s free zone.

The strategic location of Ajman Free Zone offers significant advantages for businesses looking to establish themselves in both the western and eastern markets. With the port of Ajman handling approximately 1000 vessels annually and serving as a prominent hub for maritime activities, it presents a valuable opportunity.

AFZA’s proximity, situated just half an hour outside Dubai and a mere 10 minutes from Sharjah, enhances its appeal as a business destination. This ideal location provides easy access to two international airports and four ports, simplifying logistics and trade operations. Much like other free zones across the UAE, Ajman Free Zone was established with the primary aim of attracting foreign investments to stimulate trade and industry, thus contributing to economic growth.

What sets AFZA apart from other free zones in the UAE is its commitment to offering entrepreneurs cost-effective benefits. The pricing structure in Ajman Free Zone is competitive, coupled with top-notch infrastructure, all without the burden of service charges or concealed fees.

Benefits of Ajman Free Zone Company setup

  • The Ajman Free Zone stands out as the sole downtown free zone in the United Arab Emirates for company formation.
  • Businesses can enjoy 100% foreign ownership and the ability to repatriate capital and profits in full.
  • Its strategic location near Dubai and Sharjah ensures convenient access to major sea and airports across the country.
  • Companies within the zone benefit from a complete exemption from income tax, personal corporate tax, as well as import and export duties.
  • The Ajman Free Zone boasts robust infrastructure, including extensive connectivity through a nationwide network of highways.
  • Lease agreements can extend for up to 20 years and are renewable for an additional 20 years.
  • The process of obtaining a company license is expedited, offering a fast-track approach to company formation.
  • Startups can take advantage of smart offices equipped with cutting-edge communication facilities.
  • Large industries can secure land at affordable rates within the zone.
  • The availability of uninterrupted power supply and a skilled workforce further enhances the appeal of the Ajman Free Zone.

Business activities permitted in Ajman Free Zone AFZA

There are four permitted types of business activities within the Ajman Free Zone, and they are as follows:

  • Ajman Free Zone Entity
  • Ajman Free Zone Company
  • Branch of a Foreign Company
  • Branch of a Local Company

Ajman Free Zone License types

Entrepreneurs arriving from abroad in Ajman Free Zone have the opportunity to acquire five different types of licenses for establishing companies in the region, which encompass:

1. Trading Licenses: Entrepreneurs planning to engage in trading activities within AFZA must secure a trading license. This license permits the conduct of up to three distinct business activities within a single business entity, covering a range of trading ventures, such as the trade of garments.

2. E-commerce Licenses: Businesses involved in online trading and ecommerce are obliged to obtain an e-commerce license in Ajman Free Zone. This license not only grants the right to conduct e-commerce activities but also provides support in marketing and technical aspects to business owners.

3. Professional Services Licenses: Local or international companies offering professional services in areas like management consultancy, IT Services consultancy, marketing, and various other service sectors are required to obtain professional services licenses in Ajman Free Zone.

4. Industrial Licenses: Industrial licenses are issued to local UAE or international businesses engaged in manufacturing activities within AFZA, provided they adhere to the government of Ajman’s manufacturing regulations and environmental standards. The Ajman Free Zone authority offers warehouses and smart stores to facilitate these activities, ensuring that manufacturing businesses can access all necessary resources conveniently in one location.

National Industrial Licenses are granted to AFZA companies that meet the specified conditions:

  • The company must be either registered under a GCC national or have a GCC national as the majority shareholder with 51% or more ownership.
  • A minimum of 40% of the manufacturing process must be carried out by the company within the Free Zone.
  • Companies that possess a national industrial license have the privilege of exporting duty-free goods to the Arab Gulf Cooperation Council member states.

Offshore Licenses: Companies choosing to establish a business without a local or physical presence must acquire an offshore license.

Facilities In Ajman Free Zone AFZA

Ajman Free Zone offers top-tier infrastructure and equipment to support business investors as part of their business setup arrangement. Here are some of the provided facilities:

  • Smart Offices: Smart offices are a valuable investment option for entrepreneurs and startups. These office packages offer cost-effective solutions and include two employment visas to support and streamline business operations.
  • Executive Offices: Located strategically within the Ajman Free Zone, executive offices are an excellent choice. They come with a package that includes up to five employment visas and allows for the immediate commencement of business activities. The executive offices boast outstanding facilities, including convenient parking and high-level security.
  • Warehouses: Ajman Free Zone places a strong emphasis on meeting investors’ requirements by offering high-quality warehouses equipped with all the necessary specifications and amenities. Warehouse rentals start from 100 square meters.
  • Lands: Trade zones are particularly well-suited for industrial investments, as they are meticulously designed based on thorough research to cater to the specific needs of investors.

Company Registeration in Ajman Free Zone AFZA

Company Setup Requirements in Ajman Free Zone:

  • Obtaining a trade license is mandatory for engaging in business activities.
  • A physical office within the free zone is necessary, regardless of its size. This office space can be leased in a building approved by Ajman Free Zone, offering different choices like desk spaces, warehouses, or compact offices.
  • There’s no obligation to appoint a resident manager or director, nor does the business owner need to be a United Arab Emirates resident.

Key points in Ajman Free Zone:

  • Before seeking an operational license, it’s essential to select a specific business activity.
  • A choice must be made regarding the number of visas needed.
  • Additionally, it’s important to ascertain the office’s size, as it directly influences the number of visas the business owner can obtain. The smallest office size qualifies for two visas, but if more than two visas are required, a larger office space is necessary.

Other requirements for company registration in AFZA

  • A single shareholder company must include “FZE” as a suffix in its name.
  • A company with multiple shareholders must incorporate “FZC” as a suffix in its name.
  • Branches of international enterprises, domestic mainland companies, and partially or fully-owned subsidiaries are all permitted.
  • A minimum share capital of $50,000 must be available in the bank account at the time of company registration.

Required Documents for Ajman Free Zone AFZA Company Formation

The following are important documents required for the formation of a business entity in AFZA:

  • Three suggested names (applicable for both FZE and FZC)
  • A photocopy of the applicant’s or manager’s passport (with a minimum validity of 6 months)
  • An NOC (no objection certificate) from the sponsor (required if the applicant holds a valid residence permit in the UAE)
  • An entry stamp or visa copy (mandatory for applicants with visit visas)
  • 6 to 8 passport-sized color photographs with a white background
  • A small business plan (for individuals applying for a professional or e-commerce license)
  • The parent company’s certificate of incorporation (if establishing a branch of a foreign company)
  • A copy of the trade license (for branches of local companies)

How to form a sole proprietorship businesses within AFZA?

  • For starting the process of the company setup in Ajman Free Zone AFZA only needed a copy of the business owner’s passport.
  • For obtaining a service or consulting license, the business owner must submit a comprehensive business plan encompassing financials, products, markets, and any specialized services.
  • In the case of an industrial license, one must provide a detailed process description, along with safety and environmental data.
  • Beforehand, the business owner, manager, or director should verify if the intended business activity can be added to the acquired license or if special approvals are necessary.
  • An application to gain approval for the business name must be completed and submitted to the relevant authorities.
  • Throughout the registration process, it’s essential to appoint a legal manager for the business.
  • After the business name is approved and secured, the initial approval will be granted.
  • Both the legal manager and business owner must make a visit to AFZA to sign all documents, accompanied by passport-sized photographs and passports.
  • During the registration process, it’s required to settle all outstanding payments and costs.
  • Once these steps are completed, the company’s legal documents will be generated and handed over to the business owners the following day.

How to setup corporate owner companies in AFZA?

If a foreign company wants to set up in the Ajman Free Zone, they need to provide the following documents:

  • The parent company’s Certificate of Incorporation
  • Memorandum and Articles of Association
  • A resolution from either the board or shareholders to create the new company
  • A Power of Attorney directed to the individual authorized by the parent company for registering the company in AFZA
  • These documents must receive authentication from the UAE consulate in the company’s home country

Ajman Free Zone (AFZA) offers various payment plans.

Ajman Free Zone is unique in the United Arab Emirates because it allows you to pay for a company license in multiple smaller payments. You can choose to pay in 2, 3, or 6 installments. However, there are rules you must follow to do this. The most important rule is that you must pay with post-dated checks from a bank in the UAE. For example, if you’re making 3 payments for an Ajman Free Zone company license, you can pay the first one in cash, but the other 2 payments must be made with checks on the registration day.

If foreign investors don’t have a bank account in the UAE, they can use a check from a local friend or relative, but they need permission from that person. Additionally, they must show their bank statements for the last 3 months to prove they have enough money.

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