JAFZA ( Jebel Ali Free Zone Authority ) Company Formation a Brief

Over its 27 year history, Jafza has evolved into a dynamic trade catalyst ecosystem that enables business and creates new opportunities for growth. From a modest start in 1985 with just 19 companies, Jafza today flourishes as a business community with over 7,100 companies including 100 of the Fortune 500s.

Jafza’s vision, inline with the vision of His Highness Sheikh Rashid Bin Saeed Al Maktoum, is to be the leading provider of sustainable industrial and logistics infrastructure solutions. We are dedicated to our customers, our employees, our shareholders and our community, and uphold our commitment to each one of our stakeholders.

Activities Allowed By Free zone

Any activity may function in jafza after the approval of the environment, Health , Safety,  and security department (EHSS)

Most of the jafza –based companies fall under the activity heading of trading , Manufacturing and services industries. In order from most to least numerous, companies in jafza come from the Middle east , Europe, the Indian sub continent, Americas, far East, Africa and others.

Light industrial units/warehouses:

Jafza purpose built warehouses and light industrial units (LIU)offer spacious, high quality thermally insulated facilities suitable for a wide range of applications, Convenient 24 hours access includes two entry/exit points: a ramp for light vehicles, and a loading dock for containers and trucks. Every LIU is also equipped with an office.

High quality., thermally insulated, purpose-built units are available to clients on an annual rental basis. some LIU have provision  for construction  additional offices at a mezzanine  floor level. There are two exist  at the rear , one for forklifts and an other for containers trucks.The Liu,s can be used either’s ware house for storage  and distribution of products, or as a factory for assembly and light production. The client can opt for multiple units(subject to availability) or of course leas a plot  of land else ware in the free zone, too meet their needs.

                          556 m2 warehouses/LIU,                          313m2 warehouses

Storage area of unit	512 m 2(17m wide x 30m long) Or 5,489 ft 2	267m2(13m wide x 20m long) or 2,873 ft2
Unit Height	7.8m at the ridge, 5.8m at the valley	7.8m
Area Of office / reception	46m2(4.2m wide x11m long)0r 495 ft2	46m2(4.2m wide x 11 m long) or 495 ft2
Rental rate Insurance Electricity & water Both billed directly to client Public healthy levy (PHL) services	Dhs 195,000-220,000 Us$ 53,133-59,945 per year, Based ob specification  Dhs 300 or Us$ 82 per unit. Electricity rate Dhs 20 or Us$5.4 per 100 KWH. water rate Dhs 30 or US$8.2 per 1000 Gallon per connection charges. A charge of 20 % of annual rentals is applied at a maximum of Dhs 10,000 or US$2,725 per year	Dhs 120,000 or Us$32,697 per year Dhs 300 or Us$82 per unit. Electricity rate Dhs.20 per US$5.4per 100 KWH. Water rate DHs 30 or US$8.2per 1000 gallon per connection charges. A charge of 20 % off annual rentals is applied at maximum of Dhs 10.000 US$ 2,725 per year

The LIU can be used in one of two ways: as the ware house for the storage  and distribution of products  or as factory for  assembly and light production. Depending on their specific needs, companies may choose individual or multiple units, subjects to availability. Upon request and with the approval o f jafza modifications to original units can be carried out to fit specific needs, and budgets however every slandered warehouse is well equipped with minimum features, as shown below.

Features

Electricity Payment terms Lease terms Storage Parking

The ware house unit has standard electrical capacity of 10 KVA Annually in advance One year renewable annually( with  a three month notice period) No storage out side  the building is permitted Ample space available in front or close to each warehouse and LIU, offering covered parking for two cars

Land site (plot of lands)

 Jafza provides plots various size fro short and long- term leas.

This extremely popular option is ideal for companies wishing to construct their own facility weather it is a warehouse or an industrial factory in order to preserve the appearance and infrastructure of jafza, not more then 60% of the allotted land may be utilized for the facility itself. the remaining areas is to be landscaped, allocated for parking areas or loading and unloading zone subject to jafza approval.

Whatever the type of cargo, companies in the jafza  can avail of the DPA, s ample storage facilities. at jafza,s plot of land of various size are available for lease. These sites are ideal if the company wishes to construct its own facility for ware house or factory requirement(minimum area for lease is 2,500m2)

Area  of plot

From 2,500m2

Rental rate Electricity and water Public health levy(PHL) service Industrial Effluent Disposal

From Dhs 20-80 or US$ 5.45-21.8 per m2, based on the location, Electricity rate calculated at Dhs 20 or US$ 5.4 per 100 KWH. water rate calculated at 30 or US$ 8.2 per 1000 gallons plus connection charges. Electricity and water consumption charges are billed directly to the tenant. A charge 2 % of annual rental and maximum of Dhs10,000 or US$2,725 per year is applied Dhs 25,000 or US$ 6,812 for the first connection, then calculated at 5 or US$ 1.4 per 1,000 imperial gallon, for discharge lines.

Once jafza issues a building completion certificate, Dubai electricity and water authority (DEWA)will supply main service to the premises. any machinery installed with then be checked and the company awarded an operation fitness certificate by jafza before operation. As the construction progresses, the company may initiate the process for entry premises for operative sponsored by jafza will be accepted only after the  building completion and operation fitness certificates have been issued.

Types of trade licenses available and fees per annum

Companies accepted for operation in jafza  will be granted either a trade license, service license or industrial license, service license or national industrial license by the free zone authority. these license will remain valid for however long that company maintenance a current lease agreement with the free zone authority, and license are renewable annually so long as the lease agreement is in force.

Companies practicing several categories of activities should obtain a license for each category of activity ,I. trading, manufacturing, services, etc, A special agreement will have to be made for each of these activities.

If such a company wishes to conduct business and sell its product within the U A E. it may do so bye the appointment of the official distribute or any other company holding a valid trade license However such a company can obtained the services or products from firms operating in a U A E by itself without the need of a go- between. the most important of these license and condition for obtaining each type are as follows:

General trading license:

Allow the holder to import, distribute and store all item as per jafza rules and regulations

Trade  license.

Issued to companies established within the free zone or legally incorporated outside the

U AE who wish to conduct business with in the free zone in the field of trading, importing and exporting. in such cases, a license by the economic department or any other authority is not required and ownership of the company’s capital may remain 100%foriegn.Industrial license: A license issued to companies established in the free zone or legally in corporate out side the U A E

Industrial license

A license issued to companies established in the free zone or legally in corporate outside the U A E and who wish to conduct industrial production activities such as

Manufacturing, canning, and packaging re-assembly. Other Conditions applying to trade license are applicable to industrial licenses.

Service license:

 A license issued to companies established within the free zone or registered either within out side the U A E. The share capital of the company must be atleast51%GCC and the value added to the products manufactured in the free zone must amount to minimum of 40 %of the sale value.

National Industrial license

This is a license issued to companies established within the free zone or registered either within or out side the U A E. the share capital of company must be at least 51%GCC and the value added to the products manufactured in the free zone to a minimum of 40% of the sale values

This license provides the holder the same statues as local or  GCC companies inside the U A E Holding a  a national  trade license  Qualify for costume duties exemption  on their products  with the exported to other GCC states. The authority under take the administrative negotiation needed to obtain industrial registratioan  with the U A E ministry  of finance and on behalf of the company.

Establishing a jafza -based company

Setting up a company in jafza  is simple and the procedure  are steam lined, quick and hassle free. To quality for establishing  a branch of an already established company, you merely needed to either  have a company already registered in U A E or overseas- including offshore companies.

If u are a new company  you could register a legal entity or company in jafza by applying and completing some simple  but essential documentation, a separate legal entity  called the free zone Establishment(FZCO)with limited liability can be formed with its head quarter in jafza.its affairs are completely separately from those of its share holders. It can have its own board of directors and its own bank account. Having a (FZE or FZCO has may in he rent benefits. For instance, since it is independent of its share holder ( individual or non- individual),it can retain it profits. this play an important role in international business planning.

        Cost up set up ( At a glance)

Minimum capital requirements License fee for all activities: General trade license: Registration branch office: Registration( free zone establishment) Registration (fee zone company):

FZCO- DHs 500,000(US$136,091)(minimum2 shareholders each one holding DHs 100,000).FZE DhS 1,000,000(US$272,183)(no shareholders) There is no minimum capital requirement for branch offices. Dhs 5,500(US$1,497)per annum Dhs 15,000(US$4,083)per annum N/A Dhs 10,000(US$2,722)(on time fee) Dhs 15,000(US$4,083)(one time fee)

    Documents Required for  Registration

Logical documents required for establishing a branch company

1.      Certificate for registration of the company and original certification  of good standing of the company. 2.      Memorandum  and articles of association of the company 3.      The company bored resolution  calling for the establishment of the branch in jafza and guaranteeing  full financial commitment AND Appointment of negotiator or legal Representative (together with point 3) (power of a attorney)(spice men  of signature)(Passport Copy) 4.      Appointment letter of manager of representative specimen of signature(passport copy)

(Both must be attested notarized) (Attested and non notarized) (Notarized) (Notarized) (Notarized) (Copy)

Note:

1.      Jafza reserve the right to call for  any extra documents if necessary  or ask for  attestation by the UAE Embassy  or consultant.

2.      The documents should be notarized and attested by the  embassy or consulate  or any Arab embassies if necessary .some documents can be notarized at jafza

3.      Each legal documents has to be sealed, it more then one page is submitted.

      

 List of documents required for formation of free zone establishment (FZE)

a. Individual Applicant 1.      Application’s personal details, e,d-business background. specimen of applicant’ signature and valid passport copy. the original banker’ reference 2.      Appointment of the Negotiator or legal representative(optional)            Power of attorney             Specimen of signature                Passport copy

Notarized  Notarized Notarized Notarized Notarized Notarized Copy

b. Non – individual applicant

1.      Certificate of registration of the company or original        Certificate of good standing of the                            Memorandum& article of association. 2.      Board resolution calling for the establishment of a FZE/FZCO and appointment of the  following:            Appointment of the negotiator           Or legal representative manager Specimen of the signature+ passport Copy Directors and specimen of signature + passport copy. Secretary and specimen of signature + passport copy

Attested/Notarized Attested/Notarized Attested/ Notarized Notarized Notarized Notarized Notarized

              Note:

1.                  Jafza reserve the right to call any extra documents if necessary or asked for attestation by the U AE Embassy or consulate.

             Some documents can be notarized in jebel ali

2.                   Each legal document has to be sealed, if more then one page is submitted. 



              List of Documents required for formation of the free zone company         (FZCO)

a. Individual Applicant Applicants personal details e.g. -            valid passport profile. Specimen of applicants signature Valid passport copy The original bankers reference Appointment of the Negotiator or Legal Representative(optional) Power of attorney Specimen of signature Valid passport copy b. Non individual Applicant Certificate of registration of the company or original certificate of good standing of the company. Memorandum & Article of Association. Board Resolution of the non individual calling for the establish of the FZ company in jafza. Appointment of the negotiator or legal representative. Power of attorney. Specimen signature Valid passport copy

Notarized Copy Copy Notarized Attested/Notarized Attested/Notarized Attested/Notarized copy

FZCO Board of directors (for individual & Non individual) Appointment of the following: Manager& specimen of signature+ passport copy Directors  & specimen of signature passport copy Secretary &  specimen of signature passport copy

Notarized Notarized Notarized

      Note:

1.      jafza reserve the right to call for extra documents if necessary or ask for

          Attestation by the u a e.  embassy  or consulate

   2.      He documents should be Notarized & Attested by UAE Embassy or                            Consulate or any Arab embassies if necessary.

   3.      Each legal document has to be sealed, if more then one page is submitted.

               

           Types of companies legally permitted in the zone

Overseas branch, local branch,  free zone Establishment and free zone Company.

Application Process   Obtaining a license and jafza facility

Applicant                                                                               jafza

Submits Application for license from. Submits legal documents. Sign Performa lease Agreements.

Review application from and documents. proves/rejects application. inform clients of decision Rejection or provisional approval) in case of provisional approval, asks for legal documents to be submitted. Also send prospective company specimen, lease agreement, personal secondary agreements free zone rules and the copy of the implementing regulation(for FZE or FZCO only) “ formation and process. Prepares and dispatches Performa

                                             

 Lease Agreement

Sign lease agreement. Client to sign the lease and pay the dues. Invoice client. Males payments as per Notification letter

Prepares lease and personal secondary agreement and informs  The  company(Notification letter) Prepares License

 Registering ‘Free zone establishment (FZE) or’ Free zone company’(FZCO)

Submits FZE or FZCO application from  together with application for license from Submits legal documents as per the Check- list provided. Deposits the required share capital (minimum DHs 1 million for FZE, or minimum Dhs.5000,000 for FZCO in the bank and pays jafza the Dhs. 10,000 towards FZE or Dhs 15,000 towards FZCO Registration charges

If Application for License is approved, jafza asks for legal documents required for FZE orFZCO formation. Check legal Documents. Send approval letter together with a letter to a local bank and the postal authority for opening of the bank accounts to deposit the required share capital and obtaining registered address respectively. Issues the certificates of formation and share certificates.

Kind Regards,

Vithul V Murali
Al Zaeim Corporate Services
Dubai Mobile : +971 50 55 73 538

Email  : Vithul@a2zconsultus.com

Skype : Vithul.murali