Like any other city in the United Arab Emirates, Ajman has a free trade zone as well to attract foreign investment and contribute to the betterment of its economy. The free trade zone in Ajman, called the Ajman Free Zone Authority (AFZA). is strategically located right at the entrance of the Arabian Gulf. The grounds of man Free Zone was laid back in 1998 and holds separate identity, which was granted by the ruler of Ajman. AFZA was granted the Amiri decree no 3 of the year 1996 and since then, it has been assigned the only regulatory agency of the Emirate’s free zone.
The strategic positioning of the Ajman Free Zone benefits well to both the western and eastern markets in the business establishment. The port of Ajman hosts 1000 vessels annually and at the time being. the port is known to be an important center of maritime activities. The location of AFZA is half an hour outside of Dubai and 10 minutes away from Sharjah, which makes doing business in AFZA a better opportunity as the accessibility to two international airports and four ports is made even more effortless. Like any other free zone in any city of the UAE, Ajman Free Zone was established with the main objective of attracting foreign investment in the Emirate to set up trade and industry businesses, which in turn helps in boosting the economy. AFZA. compared to other free zones in the UAE, provide entrepreneurs with cost-effective benefits. The prices set in Ajman Free Zone are as good as the others combined with excellent infrastructure, which is benefited on the top with no service charges or hidden fees.
Benefits of Company Formation in Ajman Free Zone
- Ajman Free Zone company setup is only downtown free zone in UAE
- 100% foreign ownership and complete repatriation of capital and profits for businesses
- Access to major sea and airports of country due to its proximity to Dubai and Sharjah
- 100% exemption from income tax, personal corporate tax and import & export duties
- Provide robust infrastructure including strong connectivity through federal network of highways O Offers lease period up to 20 years and renewable to 20 more years
- Fast track license processing for company formation
- Smart offices for startups with state of the art communication facilities
- Land for large industries at reasonable rates
- Availability of uninterrupted energy and skilled workforce
Types Of Business Set Up Allowed In AFZA
The number of businesses allowed in the Ajman Free Zone is 4, which are as follows:
- Ajman Free Zone Entity
- Ajman Free Zone Company
- Branch of a Foreign Company
- Branch of a Local Company
Ajman Free Zone Licenses
Entrepreneurs landing from a foreign land in Ajman Free Zone to establish companies are allowed to obtain five types of licenses in the region, which are:
Trading Licenses: Business owners who opt to conduct trading activities in AFZA are required to obtain a trading license. One trading license can permit up to three business activities to be carried out in a business. The trading business could be anything, like garments trading business.
E-commerce Licenses: Online companies or businesses involved with trading through electronic means are required to obtain an e-commerce license in Ajman Free Zone. The e-commerce license will also provide marketing and technical support to the business owners.
Professional services licenses: Local companies or even international companies that are involved in business activities related to providing professional services are required to obtain professional services licenses in Ajman Free Zone. Professional services could include management consultancy, IT consultancy, marketing, and various other services.
Industrial Licenses: Industrial licenses are issued to the local UAE or international businesses that opt for manufacturing activities in AFZA. given they comply with the manufacturing policies and environmental standards set by the government of Ajman. The authority of the Ajman Free Zone provides the facility of warehouses and smart stores to bring ease into conducting this activity. These facilities are provided to make sure that all the requirements of a manufacturing company business owner can be taken advantage of under one roof.
National Industrial Licenses: National Industrial Licenses are issued to those companies in AFZA that match the following criteria:
- The company is registered with a GCC national or the GCC national holds the majority of the company’s shares of 51 % or more.
- At least 405 of the process of manufacturing is conducted by the company in the Free Zone.
- Companies holding a national industrial license are entitled to duty-free exports to the member states of the Arab Gulf Cooperation Council.
Offshore Licenses: Businesses that opt to set up an enterprise without a local or physical appearance are required to obtain an offshore license.
Facilities In Ajman Free Zone
Ajman Free Zone facilitates business investors setting up a business in the free zone with world-class infrastructure and equipment, which is a part of their business set up an agreement. Some of these facilities are as follows:
Smart offices: For entrepreneurs and startups, smart offices are well-suited as a creative investment. The smart office packages allow the costs to be kept low and it offers two employment visas to support and facilitate proactive business operations.
Executive Offices: The location of executive offices is a strategic one in Ajman Free Zone. The executive office package offers up to five employment visas. As well as, business activities can start right off in an executive office package. The facilities in executive offices are excellent with easy parking and high security.
Warehouses: Ajman Free Zone greatly emphasizes on meeting the invertor’s requirements by providing and designing high-quality warehouses, with all the specifications and facilities. Rented warehouses start from 100 square meters.
Lands: Trade zones are more suited to industrial investment as these are areas for investment. prepared upon on-point research according to the needs of the investors.
Registering a Company in Ajman Free Zone
Basic requirements of Ajman Free Zone:
- It is required to apply for and receive a trade license to conduct business activities
- Physical office space is required inside the free zone, regardless of its size. The office space can be rented in an Ajman Free Zone nominated eligible building. There are various options for an office, such as desk spaces, warehouses or small offices.
- There is no requirement of appointing a resident manager or a director. As well as, there is no requirement of the business owner to be a resident of the United Arab Emirates.
Decision points in Ajman Free Zone:
- It is required to decide on a precise business activity before applying for an operating license
- A decision needs to be taken on how many visas are required
- It is also required to determine the size of the office. Which in turn determines the number of visas the business owner is eligible for. Two visas are provided on the smallest office size. However, in need of more than 2 visas, the office space needs to be bigger.
Other requirements of registration in AFZA
- A single shareholder company is required to have a suffix of FZE
- Multiple shareholder company is required to have a suffix of FZC
- Branches of foreign businesses and local mainland businesses, as well as partly or fully owned subsidiaries, are allowed
- The minimum share capital is $50,000, which is required to be shown in the bank account at the time the company is being registered
Documents Required for Ajman Free Zone Company Formation
There are various types of documents required for the formation of any of the abovementioned business structures in Ajman Free Zone.
Following are important documents required for formation of a business entity in AFZ.
- Three proposed names (for FZE and FZC)
- Passport copy of applicant/manager (minimum 6 months’ validity)
- NOC (no objection certificate) from sponsor (if applicant has valid residence in UAE)
- Entry stamp/visa copy (if the applicant is on visit visa)
- 6 or 8 passport-sized photographs (colored) with white background
- A small business plan (in case of professional or e-commerce license)
- Certificate of incorporation of parent company (in case of branch of a foreign company)
- Trade license copy (for branch of a local company)
How to form single-owner companies in AFZA?
- The business owner’s passport copy is all that is needed to start the process of establishing a company
- To obtain a service or consulting license, submitting a business plan is required of the business owner. This must include finances, products, markets, and special services if there are any
- To obtain an industrial license, it is required to provide a detailed process description along with safety and environmental data
- The business owner or the manager or director of the company must make sure beforehand if the desired activity is permitted can be added to the obtained license or if there is a need for special approvals
- An application for approval of the name of the business is required to be filled and submitted to the relevant authorities
- It is also required to hire a legal manager for the business during the process of registration
- Once the name of the business is approved and acquired, the initial approval will be granted
- It is also required of the legal manager and owner of the business to visit AFZA once to sign all the documents, along with passport-sized photographs and passports
- At the time of registration, it is also required to clear all the payments of all the costs
- Once all of that is dine, the legal documents of the company are made and handed over to the business owners the next day
How to form corporate owner companies in AFZA?
In the case of the company being established in Ajman Free Zone is foreign, then the following papers are required to be submitted:
- Certificate of Incorporation of the parent company
- Memorandum and Article of Association
- A board resolution or a shareholder to establish the new company
- Power of Attorney addressed to the person authorized by the parent company to undertake the company registration in AFZA
- The documents must be attested from the UAE consulate in the home country of that company
Multiple Payments Plan in AFZA
Ajman Free Zone is known to be the only free zone operating in the United Arab Emirates that offers the option of multiple installments payment. The payment of the company can be made in 2, 3 or even 6 installments. However, there are certain conditions in the AFZA that are required to be met to pay for the company in installments. Amongst which, the first and the most important one is that the payments must be given by post-dated checks from a bank of the United Arab Emirates. So, if the installments for an Ajman Free Zone company license are made in 3 steps, the initial one can be paid in cash while the rest of the 2 payments can be provided in checks on the registration day.
Although, in the case of foreign investors who do not have a UAE bank account, the investors can use a local relative or a friend’s check. However, Ajman Free Zone requires a NOC from the local friend or relative to use his or her checkbook. Other than that, it is also required to provide the bank statement of the past 3 months as proof of funds.