How to Transfer a Trade License Between Free Zones in the UAE: A Step-by-Step Guide

The UAE’s business landscape is evolving rapidly, with increased competition among free zones to attract foreign investment. If you are considering a trade license transfer from one free zone to another, you must understand the process, benefits, and potential challenges.

Is It Possible to Transfer a Free Zone License?

Yes, free zone license transfer is possible in the UAE. This can be done either by winding up the existing company and incorporating a new entity in the desired free zone or by directly transferring the company through redomiciliation. Some free zones, such as Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), and Dubai Multi Commodities Centre (DMCC), explicitly allow such free zone license relocation.

How to Transfer a Free Zone License?

The trade license transfer process involves various administrative steps, and companies should prepare in advance to ensure a smooth transition. Here’s a step-by-step guide:

1. Evaluate the New Free Zone

Before initiating the free zone license transfer, research the benefits of the new free zone, including tax incentives, operational flexibility, and strategic location advantages.

2. Shareholders’ Resolution and Corporate Documentation

• A formal shareholders’ resolution must be passed, stating the intent to relocate.
• If a shareholder is a foreign company, the resolution must be notarized and legalized by the UAE Embassy and the Ministry of Foreign Affairs.
• Other documents, such as trade licenses and trade register excerpts, must also be updated and submitted.

3. Apply for Pre-Approval in the New Free Zone

• Secure pre-approval and reserve a trade name with the new free zone.
• Meet the initial compliance requirements and pay the necessary fees.

4. Obtain a No-Objection Certificate (NOC) from the Current Free Zone

• Submit a request to the current free zone authority for an NOC confirming their approval for trade license transfer.
• Clear all outstanding dues and obligations before obtaining the NOC.

5. Verification of Management & Shareholders

• The new free zone will verify the identities of shareholders and management.
• Due to digital advancements, some free zones allow online verification.

6. Receive a Pre-License from the New Free Zone

• Once verification is complete, the new free zone issues a pre-license.
• The company can set up its new office space and obtain approvals required for operational readiness.

7. Obtain an Exit Certificate from the Old Free Zone

• The old free zone issues an exit certificate after finalizing deregistration processes.
• The company must settle liabilities, obtain clearance certificates (e.g., customs, VAT), and close any outstanding financial obligations.

8. Obtain the Full Trade License from the New Free Zone

• Once the exit certificate is submitted, the pre-license is converted into a full trade license.
• The company can now commence business operations in the new jurisdiction.

Key Considerations When Transferring a Free Zone License

• Financial Impact: Some free zones offer lower fees and incentives to attract investors, making free zone license relocation financially beneficial.
• Regulatory Compliance: Each free zone has specific compliance requirements that must be met before trade license transfer.
• Tax Considerations: Redomiciling the company may offer tax benefits, whereas liquidation and re-establishment could have tax disadvantages.
• Operational Disruptions: A poorly planned free zone license transfer may lead to temporary business interruptions.

Limitations and Challenges

• Not all free zones allow direct trade license transfers; some may require winding up the existing entity and setting up a new one.
• The process can be time-consuming, especially for companies with complex structures or foreign shareholders.
• Certain approvals, such as customs clearance or industry-specific permits, may delay the free zone license relocation process.

Required Approvals & Documents

• Shareholders’ resolution (notarized and legalized if applicable)
• NOC from the current free zone
• Pre-approval from the new free zone
• Updated trade license and registration documents
• Passport copies of shareholders and management
• Exit certificate from the old free zone
• New free zone trade license

Consult Beyond View for Expert Assistance

Navigating a free zone license transfer can be complex, requiring strategic planning and compliance with multiple regulatory authorities. Beyond View specializes in trade license transfer, business setup, and free zone license relocation within the UAE, ensuring a seamless transition for companies looking to expand or optimize their operations.

Get in touch with Beyond View today for a hassle-free free zone license transfer process and expert guidance tailored to your business needs.

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