Companies opt for “Virtual Office” to cope with higher operating costs
• Fujairah, Ajman, Hamriyah (Sharjah) and RAK free zones offering innovative solutions for start-ups
• Start up costs as low as $ 5562 for the first year
• Ease of getting started with ‘One Visit, One Hour, One Window’ approach
• Audit of accounts not compulsory in certain cases
• Personal appearance of all shareholders not compulsory in certain cases
Higher operating costs in Dubai and Abu Dhabi is pushing many new companies that are planning to start operations in the UAE to look out for lesser known free zones such as Fujairah Free Zone, Ajman Free Zone, Hamriyah (Sharjah) and Ras Al Khaimah (RAK) Free Trade Zone.
According to a study conducted by Jitendra Business Consultants (A division of Jitendra Chartered Accountants), one of the leading consulting firms in the UAE, the four Emirates – Fujairah, Ajman, Hamriyah (Sharjah) and RAK – are going that extra mile to woo companies with innovative offerings such as Virtual Office, e-Office and Flexi-Desk.
Fujairah Free Zone’s “Virtual Office” is almost to be taken literally: it has the address of an office, the telephone numbers of an office and even the meeting rooms of an office, except for one determining factor that you are not actually in the office.
The e-office centre facilities in Ajman free zone offers a table space along with access to high speed internet. The e-office center houses exclusive business desk with interiors & facilities that boast of meeting halls, board-rooms, high speed internet access and a restaurant. In the case of Sharjah (Hamriyah) Free Zone, the e-office comes with a 9.5 square meter office as well.
RAK Free Trade Zone’s “Flexi-Desk” is a shared and networked desk designed for single-person users such as professionals, self-employed businessmen or establishments. On offer is a furnished and semi-enclosed office with one executive desk and chair along with a private email address. Another unique feature is a separate post box number.
Says Jitendra Gianchandani, Managing Partner, JBC, “There is a trend amongst wannabe companies to look out for economical options and these Emirates have realized that there is a huge business potential in plugging this gap. The set-up cost differential between Dubai Airport Free Zone Authority (DAFZA) & Jebel Ali Free Zone Authority (JAFZA) – the most prominent free zones – and the above mentioned four free zones varies from 5 to 10 times and this is motivating smaller companies to go for Virtual Office or Flexi-Desks. Besides, the ease of getting a license is phenomenal. For instance, Fujairah Free Zone is promising ‘One Visit, One Hour, One Window’ operation which is really a welcome move.”
Gianchandani said that till date his firm has helped many companies obtain Virtual Office, e-office and Flexi-Desk licenses, namely, Daedalus FZE, Marigold FZE, Achilies FZE & Dimex FZC, SSIG Group FZC, MMS Private Clients FZE, Capital Consultancy FZE & Forte Middle East FZC, A Plus Steel General Trading FZC, LCC Strategies FZE, AIC Industrial Consultancy FZE and Confirmax FZE.
He said: “Virtual office is suitable for those investors who wish to operate with bare minimum resources and have just one or two visa requirements. With Virtual or e-office, these companies can open a bank account anywhere in the UAE and export or import goods from any of the seaports or airports in the UAE. Besides, annual audit is not compulsory for Fujairah & Ajman free zone companies, and personal appearance of all shareholders is not required during the incorporation in Fujairah Free Zone, leading to further cost savings.”
The comparative cost of establishing a company – including first year fees and refundable deposit – in Fujairah is $6131, Ajman is $6934, Hamriyah (Sharjah) is $5562 and RAK is $6812. The costs are further lower for subsequent years at $3406 in Fujairah, $6934 in Ajman, Hamriyah (Sharjah) is $5562 and $4087 in RAK. Comparatively speaking, the cost involved for well-known free zones in Dubai is not only higher in the first year, but also for the subsequent years.
For instance the cost of establishing a company – including first year fees and refundable deposit – in DAFZA is $73217 onwards, JAFZA is $18079 onwards, Dubai Silicon Oasis is $48985 onwards and Dubai Internet City is $9487 onwards. The fee for subsequent years is $55505 onwards, $ 14,605 onwards $42174 onwards and $9487 onwards respectively.
It should be noted that despite start-up costs being the highest at DAFZA & JAFZA and non availability of facilities, these free zones continue to attract new companies with a wait list of approximately 30 days.
