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  • What is a Free Zone?

    What is a Free Zone?

    A free zone, also known as a free trade zone, is a defined geographical area that lies outside the customs territory of the country (or countries) in which it is located. A free zone may also exist as the result of a mutual agreement by several countries to create a customs-free zone in a designated area. The fact no duties or taxes are levied in the free zone helps to promote trade, especially the import and export of all kinds of goods.

    If multiple countries conclude an agreement to create a joint free zone, all barriers to trade are abolished. No duties or taxes are levied within the free zone. This freedom from barriers attracts companies from all sectors and encourages them to relocate there and/or to form new companies. A free zone optimises the movement of goods between the individual countries in the zone and offers the opportunity to either secure or disallow imports from third party countries.

    The most important types of free trade zones are free zones, free port zones and export processing zones. The United Arab Emirates offers a number of highly popular free trade zones, particularly the emirates of Ras Al Khaimah.

    What is a Free Zone?

    A free trade zone is a geographical area within a country and can be designated or located anywhere within a country. Large manufacturing and trading companies are afforded the opportunity to relocate their entire production line to these free zones, thereby guaranteeing considerable savings on the transport and export of goods to other countries. Equally, a company could move their production facilities to another country and import the resulting goods to the free zone without paying customs duties or tax. This means, for example, that a company can have their goods produced in China, import them tax-free into the free zone and then export them tax-free out again. Within this scenario, the company’s profits remain in the free zone country and are tax exempt. Typical business activities in free zones include the handling and storage of goods in warehouses (often rented out by the free zone), the packaging and sorting of individual products into smaller quantities or individual packages and the inspection of distribution and freight centres.

    A "free port zone" is a free trade zone that is connected to a sea or airport. A free port zone is created in order to unburden companies from government restrictions and allow the free flow of goods. Free ports allow the tax-free import and export of goods and guarantee tax exemption. These immense advantages incentivise companies to use free port zones from a financial, tax, investment and regulatory viewpoint. Trade barriers, rules on bank transactions and official requirements for employees are also relaxed within the borders of the free port. Recently, some free ports have adopted multimodal cargo handling as a new service option.

    What is a Free Zone?

    An export processing zone (EPZ) is defined as an area in which special incentives and privileges are offered to foreign firms for producing goods for export. EPZs are typically industrial areas in developing countries that offer favourable customs regulations (e.g. on the import of manufacturing equipment) as a financial incentive for export-oriented manufacturing companies.

    What is a Free Zone? Free zones connect the region with the global economy through the production of good intended for export, foreign currencies and the possibility for companies outside of the free zone to trade with international firms.

    The most successful and internationally popular free trade zone is located in the United Arab Emirates (UAE):

    Hong Kong is also considered a special region for "free trade".

     Ras Al Khaimah

    RAK Free Zone Company Formation

    Special advantages:

    As a shareholder, you may apply for an "investor visa", which gives you the option to take up residency in the U.A.E. Free zone companies are recognised internationally without restrictions. Tax exemption!

    Details, Services & Fees

    Legal Notices

    Privacy Management GroupFZ-LLC regularly checks and updates the information on its websites. Despite all due diligence, it is possible that some facts have changed in the meantime. It is therefore not possible to assume liability or provide any guarantee as to the relevance, completeness or correctness of the information provided. The same applies for all other websites that are accessed through the hyperlinks provided. Privacy Management GroupFZ-LLC is not responsible for the content of websites that are accessed through these links. Furthermore, Privacy Management GroupFZ-LLC reserves the right to make changes or additions to the content provided. In addition to the content and structural copyright protection rights of Privacy Management GroupFZ-LLC websites, the reproduction of information or files, in particular the use of texts, extracts or images, is prohibited without the prior written consent of Privacy Management GroupFZ-LLC.

    None of the content on any of the Privacy Management GroupFZ-LLC web pages represents an individual recommendation nor is it to be understood as an invitation to trade, default or purchase. Privacy Management GroupFZ-LLC also explicitly points out that you should seek advice from experienced tax consultants and/or lawyers, in particular for any cross-border activities. In principle, any income generated domestically or internationally is subject to taxation. It is solely your responsibility to fulfil your domestic and/or international tax obligations appropriately. Privacy Management GroupFZ-LLC does not accept liability under any circumstance. Additionally, our General Terms & Conditions as well as our Data Protection Provisions and Legal Details apply.

    Asset Protection

    CFC-Management-Services

    The taxation of companies on an international level generally follows the principle of decision-making power. A company is thus taxable in the country where ‘Management & Control’ is exercised. In general, international authorities assume that ‘Management & Control’ of a company is exercised in the same country where the general manager/director resides.

    Therefore, if you live outside of Panama, it makes sense to have at least local managing directors/directors in Panama. The level of authority of these Nominee-Directors can be determined individually according to personal needs and legal requirements.

    In addition, in most cases at least one foreign business address or even a foreign business premise is required. For this, we offer appropriate packages, with which this can be verified.

    Note: It is of course also possible to hire local managing directors instead of using nominee directors, should you prefer to do so. We are happy to advise you on the one-off and running costs upon request!

    Annual fees are only due after the first 12 months

    The annual fees are not due for payment until 12 months after the formation of your company in Panama. In the following years the settlement of the annual fees follows a 12-month cycle.

    For example: You establish a company in Panama on 14.07.2019. The start-up fees already include all the costs for the first year, with the exception of costs for optional services. After 12 months, at the latest on 14.07.2020, the annual fees for your company in Panama are due for payment (plus any optional services). Subsequently, the payment date recurs every year on 14th July at the latest.

    Renewal of the management fee annually USD 740.00
    Registered agent annually USD 245.00
    Registered office annually USD 245.00
    Corporate franchise fees annually USD 300.00
    annually

    Annual fees are only due after the first 12 months

    The annual fees are not due for payment until 12 months after the formation of your company in the Seychelles. In the following years the settlement of the annual fees follows a 12-month cycle.

    For example: You establish a company in the Seychelles on 14.07.2019. The start-up fees already include all the costs for the first year, with the exception of costs for optional services. After 12 months, at the latest on 14.07.2020, the annual fees for your company in the Seychelles are due for payment (plus any optional services). Subsequently, the payment date recurs every year on 14th July at the latest.

    Renewal of the management fee annually USD 190.00
    Registered agent annually USD 210.00
    Registered office annually USD 210.00
    Corporate franchise fees annually USD 190.00
    annually

    CFC-Management-Services

    The taxation of companies on an international level generally follows the principle of decision-making power. A company is thus taxable in the country where ‘Management & Control’ is exercised. In general, international authorities assume that ‘Management & Control’ of a company is exercised in the same country where the general manager/director resides.

    Therefore, if you live outside of the Seychelles, it makes sense to have at least local managing directors/directors in the Seychelles. The level of authority of these Nominee-Directors can be determined individually according to personal needs and legal requirements.

    In addition, in most cases at least one foreign business address or even a foreign business premise is required. For this, we offer appropriate packages, with which this can be verified.

    Note: It is of course also possible to hire local managing directors instead of using nominee directors, should you prefer to do so. We are happy to advise you on the one-off and running costs upon request!

    CFC-Management-Services

    The taxation of companies on an international level generally follows the principle of ‘location of decision-making power’. A company is thus taxable in the country where ‘Management & Control’ is exercised. In general, international authorities assume that ‘Management & Control’ of a company is exercised in the same country where the general manager/director resides. .

    Should you intend not to take on the position of local manager/director, despite having an investor visa, we can provide you with the appropriate trustee-service that will manage this position for you – a nominee is a natural person residing in the UAE. Similarly, should you not wish to officially appear as a shareholder of your Freezone-company in RAK, even in this case we can satisfy your requirements through the use of an appropriate Nominee-company. Let’s talk about it, we are at your disposal!

    CFC-Management Packages

    The international CFC-Rules are of particular importance when a Panama company wants to, for example, send invoices to companies based abroad.

    Each country implements CFC-Rules on a national and individual basis and thus makes different demands on the substance and structure of a foreign company. For the benefit of your customers, business partners and contractors and with the aim of not losing them, for example through ‘denied business expenses’ in your country of residence, you should adapt your company to international standards. In regards to this we can support you with one of our management packages.

    CFC Management Packages

    The international CFC-Rules are of particular importance when a Seychelles company wants to, for example, send invoices to companies based abroad.

    Each country has implemented the CFC-Rules on a national and individual basis and thus makes different demands on the substance and structure of a foreign company. For the benefit of your customers, business partners and contractors and with the aim of not losing them, for example through "denied business expenses" in your country of residence, you should adapt your company to international standards. In regards to this we can support you with one of our management packages.