SETTING UP A COMPANY IN JEBEL ALI FREE ZONE AUTHORITY (JAFZA)

INTRODUCTION

The United Arab Emirates (UAE) continues to grow as a global business hub, and one of the most strategically significant locations within its economic landscape is the Jebel Ali Free Zone Authority (JAFZA). JAFZA is among the oldest and most successful free zones in the region, accounting for a significant portion of Dubai’s non-oil GDP. Located adjacent to the Jebel Ali Port and in proximity to Al Maktoum International Airport, JAFZA provides a robust infrastructure, tax advantages, and streamlined regulatory procedures, making it a preferred destination for international businesses engaged in manufacturing, logistics, trading, and service sectors. 

JAFZA’s legal and regulatory environment is governed by a well-developed framework designed to attract and support foreign investment. Companies incorporated in the zone benefit from 100% foreign ownership, zero corporate and personal income tax, no import or re-export duties, and full repatriation of capital and profits. In addition, JAFZA operates under its own legal and regulatory regime, primarily regulated through the Jebel Ali Free Zone Rules 2023 Ninth Editionand other supplementary regulations issued by the Free Zone Authority.  

This document provides a comprehensive guide to setting up a company in JAFZA, covering entity types, incorporation processes, compliance requirements, fees, timelines, and legal frameworks for dispute resolution and company winding up.

ONSHORE COMPANIES

An onshore company is a business set up and operating within the country where it is registered. It is usually allowed to conduct business inside the local marketand may have physical offices, employees, and pay taxes in that country.

Example: A Free Zone Company (FZCO) in JAFZA that manufactures products and sells them within the UAE (after working with a local distributor) is considered an onshore company.

OFFSHORE COMPANIES

An offshore company is a business entity registered in a country or jurisdiction mainly for conducting business outside of that country. It typically cannot trade locallyand is often used for holding assets, international trade, tax planning, or owning property.

A JAFZA Offshore Company is used by foreign investors to own real estate in Dubai or to hold shares in other companies, but it cannot rent office space or hire people locally in the UAE.

ENTITY TYPES

JAFZA permits the establishment of both onshore and offshore entities, with flexible structuring options including Free Zone Establishments (FZEs), Free Zone Companies (FZCOs), Public Listed Companies (PLCs), branches of foreign or UAE companies, and JAFZA Offshore Companies governed by the JAFZA Offshore Companies Regulations 2023. 

1. Free Zone Establishment (FZE) (Part 3, Section 1, Regulation 10 of the Jebel Ali Free Zone Companies Implementing Regulation 2016):

An FZE is a limited liability company with 1 shareholder. The liability of the shareholder towards the FZE, concerning its shareholding, is limited to the capital paid by the shareholder in the FZE, and where the shares are not fully paid, the shareholder is liable to pay the unpaid portion. An FZE has a legal personality distinct from that of its shareholder and has the capacity, rights and privileges of a natural person. It may not invite the public to subscribe to its shares, nor may an FZE allot shares with the intention of such shares being offered to the public. It must mention in all its dealings, contracts, announcements, invoices, correspondences, and printed materials that the liability is limited. 

An FZE must obtain a License to operate in the Free Zone. A License is valid for operations in the Free Zone and does not authorise the FZE to carry out operations outside the Free Zone. An FZE may operate in a jurisdiction other than the Free Zone, subject to the laws of such jurisdiction.

1. Free Zone Company (FZO) (Part 3, Section 1, Regulation 11 of the Jebel Ali Free Zone Companies Implementing Regulation 2016):

An FZCO is a limited liability company with a minimum of 2 and a maximum of 50 shareholders. The liability of a shareholder towards the FZCO, concerning its shareholding, is limited to the capital paid by the shareholder in the FZCO. Where the shares are not fully paid, the shareholder is liable to pay the owed portion. A FZCO has a legal personality distinct from that of its shareholders, and it has the capacity, rights and privileges of a natural person. It may not invite the public to subscribe to its shares, nor allot shares with the intention of such shares being offered to the public. An FZCO may, subject to the consent of the Registrar, create different classes of shares by providing for the different classes of shares in the memorandum and articles of association. It must mention in all its dealings, contracts, announcements, invoices, correspondences, and printed materials that its liability is limited.

An FZCO must obtain a License to operate in the Free Zone. A License is valid for operations in the Free Zone and does not authorise the FZCO to carry out operations outside the Free Zone. An FZCO may operate in a jurisdiction other than the Free Zone, subject to the laws of such jurisdiction.

1. Public Listed Company (PLC) (Part 4, Section 1, Regulation 52 of the Jebel Ali Free Zone Companies Implementing Regulation 2016)

A PLC is a company with limited liability with more than two shareholders. The liability of a shareholder towards the PLC, for its shareholding, is limited to the capital paid by the shareholder in the PLC. It has a legal personality distinct from that of its shareholders and has the capacity, rights and privileges of a natural person. A PLC may invite the public to subscribe to its shares in accordance with the Market Laws.  It must list its shares on a stock exchange as per the market laws within 9 months from the date of incorporation, unless extended by the Registrar. If the PLC fails to comply, the Registrar may impose such fines and penalties as it may deem appropriate. 

As per Part 4, Section 3, Regulation 56 of the Jebel Ali Free Zone Companies Implementing Regulation 2016, there is no requirement for share capital, but it should have an amount higher than sufficient for the activities or the amount required under the relevant market laws. PLC must obtain a License to operate in the Free Zone. A License is valid for operations in the Free Zone and does not authorise the PLC to carry out operations outside the Free Zone. A PLC may operate in a jurisdiction other than the Free Zone, subject to the laws of such jurisdiction. 

1. Branch of an existing company:

An extension of a foreign or UAE parent company. Any company (foreign or mainland) may open a JAFZA branch, which is 100% owned by the parent and carries the same name and activities. A branch has no separate share capital; it operates under the parent’s license and structure. Branches in JAFZA still must obtain a JAFZA license and abide by JAFZA rules. They cannot engage in activities beyond the scope of the parent’s business. One key benefit of a branch is that it allows a foreign company to have a base in JAFZA without incorporating a new subsidiary. JAFZA’s 2016 Regulations explicitly included branches alongside FZEs and FZCOs under one unified regulatory framework. 

Local vs. Foreign Branch: The setup process differs slightly; a branch of a UAE-based company needs to present its UAE license and partners list, whereas a branch of an overseas company must provide the certificate of incorporation and board resolution from the parent company, among other documents. In both cases, the branch must appoint a manager to act on behalf of the parent company in JAFZA. The branch’s name will typically be the same as the parent (with “JAFZA Branch” added).

1. Offshore Company

JAFZA has a separate regime for offshore companies under the JAFZA Offshore Companies Regulations 2023. The JAFZA Offshore Company is a zero-activity entity used for holding assets outside the UAE. It requires at least one shareholder and has no limit on the number. It is a limited liability entity whose liability is limited to its capital paid.  Offshore companies are outside the scope of this article’s focus on operating within JAFZA, but it’s worth noting that they exist under a distinct legal framework (e.g., no requirement to lease premises in the free zone, and the UAE Commercial Companies Law does not apply to them either). 

Each type of JAFZA entity above has a defined legal structure in the regulations. All are considered “Free Zone Companies” for UAE law purposes, meaning they are treated as juridical entities established by special free zone laws. It is important to emphasise that free zone companies (FZE, FZCO, PLC) are not “mainland” companies under the UAE Commercial Companies Law.  Free zone companies are governed by their respective free zone regulations, and only if a free zone company wishes to conduct business outside the free zone (onshore UAE) would certain provisions of the federal law or requirements (such as appointing a local agent) come into play. Each vehicle must choose an appropriate JAFZA license (e.g. trading, service, industrial, logistics) to cover its permitted activities.

DOCUMENTS REQUIRED

Setting up a company in JAFZA involves preparing a set of legal documents. The exact documentation depends on the type of entity and whether the shareholder is an individual or a corporate entity. JAFZA provides specific checklists for each scenario. 

All corporate documents originating outside the UAE must be properly attested. JAFZA will not accept foreign incorporation certificates or board resolutions that are not legalised for use in the UAE. Likewise, any document not in English or Arabic should be accompanied by a certified translation. The process of gathering and attesting documents, especially for foreign shareholders or foreign parent companies, can be time-consuming, so investors should account for this in their timeline. JAFZA’s Sales and Registration team may request additional documents on a case-by-case basis – for example, a power of attorney if someone other than the shareholder will sign the company formation documents in front of JAFZA, or background information for due diligence.

JAFZA typically provides standard Memorandum and Articles of Association templates for FZE/FZCO at the time of incorporation. The MOA outlines the company’s name, capital, shareholders, and objectives, while the Articles cover internal governance. For FZEs and FZCOs, the MOA must be signed by the shareholder(s) and witnessed and then submitted to the JAFZA Registrar. If any special provisions (e.g., different share classes or a supermajority voting requirement) are needed, those should be drafted into the MOA at incorporation or added by amendment later with JAFZA approval. Branches do not have an MOA since they are not separate entities; however, JAFZA will issue a License and a Registration Certificate for the branch once approved.

STEP-BY-STEP PROCESS OF INCORPORATION

Establishing a company in JAFZA follows a clear process administered by the JAFZA Registration Bureau, often in coordination with the Dubai Trade online portal. The steps below outline the typical incorporation procedure for an FZE/FZCO with notes for branches and PLCs where they diverge. The process is as follows:

1. Initial application and pre-approval:

The first step is to register your interest with JAFZA. This can be done online through JAFZA’s website. An interested investor submits a brief online inquiry or initial application, indicating the desired company type, proposed business activity, and contact details. AFZA uses this to conduct a preliminary screening. Once the form is submitted, JAFZA contacts the applicant to discuss the proposal and guide them on the required documents. 

At this stage, you will also choose a company name (which JAFZA will check for availability and acceptability under naming rules) and a suitable business activity from JAFZA’s list of permitted activities. Certain sensitive activities might require additional approvals (for example, financial services, education, or health products might need external ministry approvals), and JAFZA will flag these if applicable. For most normal trading, service, or industrial activities, JAFZA’s internal approval is sufficient. After the initial consultation, JAFZA may issue a provisional approval or reference number for the company, and then the process moves to documentation.

1. Preparation and submission of required documents:

Once the initial green light is given, the detailed application and document submission take place. The applicant needs to fill out the official Application Form and EHS Form, and compile all the required documents as described in the previous section (attested certificates, passports, resolutions, etc.). JAFZA often requests that the full package of documents be submitted together for efficiency. The signed application and forms, along with attachments, are submitted either through the online portal or physically at the JAFZA Registration Centre. At the time of submission, the applicant will pay the initial registration fees and name reservation fee, if any. 

JAFZA’s officers will review the documents for compliance. If any document is missing or needs correction, they will inform the applicant to provide the same. Once the documents are in order, JAFZA issues a payment voucher for the next steps. For branch registrations, the parent company must also sign a standard Undertaking Letter provided by JAFZA, confirming it takes responsibility for branch liabilities. This is usually done as part of the application form for branches. 

For PLC, at this stage, JAFZA may ask for a business plan and financial projections, since listing is intended. However, the key output of this step is that JAFZA is satisfied that all incorporation documents meet their requirements and all necessary approvals, including external regulators, if any, are obtained.

1. Payment of license and lease fees:

Every company in JAFZA must have a leased space or facility in the free zone; this is a legal requirement; a company must have a valid Lease alongside its license. Therefore, as part of incorporation, the investor must select the type of facility they will use; options range from a flexi-desk or co-working space for small start-ups to offices, warehouses, or plots of land for larger operations. JAFZA provides a list of real estate solutions (office units, warehouses, land for development, retail shops, etc.), and the choice will depend on the business’s needs and budget. After document approval, the investor will typically meet with JAFZA’s leasing team to finalise a Lease Agreement for the chosen premises. Once the facility is allocated, the applicant proceeds to payment; this includes the first year’s license fee, registration fees, and usually the first instalment of rent and a security deposit for the lease. 

The applicant must pay these to move forward. Payment is made via the JAFZA portal or bank transfer. The license categories in JAFZA include Trading, Service, Industrial, E-commerce, General Trading, Logistics, etc., and the applicant should ensure the correct license type is chosen, as it affects the allowable activities. 

At this stage, the memorandum and articles of association for the company are finalised (for FZE/FZCO/PLC). The MOA will be signed by the shareholder(s) in front of JAFZA or via an acceptable electronic method. The JAFZA Registrar then attests the MOA, and it becomes the company’s constitutional document. 

1. Registration and license issuance:

After fees are paid and documents are signed, JAFZA’s Registrar will formally incorporate the company. The company’s details are entered into the JAFZA Companies Register, and a Certificate of Formation (or Registration) is issued, confirming the company’s legal existence. For branches, a Certificate of Registration for the branch is likewise issued. Simultaneously, JAFZA issues the Business License, which is the operating license specifying the company name, license type (e.g. trading, service), and permitted activities. The license is typically valid for one year from the date of issuance. The whole registration process, from submission of final documents to getting the license, is efficient.  JAFZA estimates 3 to 14 business days from submission of all documents for the company to be set up, depending on the complexity and the type of license. 

Once the license is issued, the company can commence operations in JAFZA immediately. At this point, the company can also apply for residency visas for its staff through JAFZA’s immigration services. Each company in JAFZA gets an establishment immigration card and can sponsor employees, although visa processing is a post-incorporation step and follows separate immigration rules.

1. Post-incorporation compliance:

After incorporation, there are a few final steps to complete. The company should obtain its establishment card (immigration card) from JAFZA’s portal to enable visa processing. The company will also register with the relevant authorities. JAFZA will guide new companies on Economic Substance Regulations filing, as noted in the license issuance stage, new companies must submit a notification or report on Economic Substance if required. The company should also open a corporate bank account in the UAE. The JAFZA provides the license and incorporation documents needed for this; many banks in the UAE are familiar with free zone company accounts. 

Within JAFZA, companies must adhere to ongoing obligations such as annual license renewal, maintaining a valid lease, and audited financial statements if the free zone requires them. If any changes are needed (e.g., adding an activity, changing the company name, transferring shares), they must be made through JAFZA by following amendment procedures and paying prescribed fees. 

JAFZA’s one-stop approach (integrating licensing, registration, leasing, and government relations) makes it relatively streamlined throughout the incorporation process. Generally, the critical path is document preparation. 

TIMELINE FOR JAFZA COMPANY SETUP

JAFZA estimates an overall timeframe of 3 to 14 business days from the time all required documents are submittedto complete a company setup. Simpler setups (e.g., single-owner consultancy with a flexi-desk) tend toward the shorter end, whereas complex ones (multi-shareholder, special licenses) tend toward the longer end. The preparatory steps, name reservation and document attestation should be factored in by the investor to get a realistic total timeline.

COST AND CAPITAL REQUIREMENT

Forming and operating a company in JAFZA involves several cost components. Below is an overview of the key costs and capital requirements, based on JAFZA’s tariff schedule and recent regulations.

Since 2016, there has been no minimum paid-up share capital mandated for free zone companies. JAFZA simply requires the capital to be sufficient for the business’s needs. If a Public Listed Company is being formed, the practical capital will likely be higher since to list on an exchange, the company might need to show a certain market capitalisation or float. Moreover, JAFZA companies benefit from 0% import/export duties within the free zone and as of the new UAE Corporate Tax Law, they can benefit from 0% corporate tax on qualifying income for free zone companies. 

WINDING UP AND INSOLVENCY IN JAFZA

Business ventures sometimes come to an end, and it is crucial to understand the legal procedures for winding up a JAFZA company, as well as the insolvency regime that applies if the company cannot pay its debts. In JAFZA, the winding up (liquidation) process is governed by the JAFZA Companies Implementing Regulations, Part 9 “Winding Up,” while insolvency (bankruptcy) matters are largely governed by the UAE Federal Law, with some special rules for PLC.  

1. Voluntary winding up (Part 9, Regulation 104 of the Jebel Ali Free Zone Companies Implementing Regulation 2016):

A company may be wound up voluntarily in the following events:

1. When the period, if any, fixed for the duration of the Company by its memorandum and articles of association expires;
2. When an event, as may be provided in the memorandum and articles of association, occurs where a Company is to be dissolved, or
3. When the company resolves by a Special Resolution, or by a resolution passed by such other majority percentage of Shareholders with voting rights as prescribed in the memorandum and articles of association, that the Company be wound up voluntarily. 
4. A copy of the Special Resolution for winding up voluntarily must, on the date that it is issued, be submitted to the Registrar. 

One or more auditors must be appointed as liquidators by an Ordinary Resolution, as soon as practicable after the dissolution of a Company. The appointment of a liquidator must be immediately notified to the Registrar. A copy of the Ordinary Resolution for the appointment of a liquidator must be submitted on the same day the resolution was passed, and the Registrar must enter the name of the liquidator in the Companies Register.

1. Winding up by the Registrar (Part 9, Regulation 103 of the Jebel Ali Free Zone Companies Implementing Regulation 2016):

A Company may be wound up by the Registrar in the Registrar’s discretion, in the following events:

1. A Company’s failure to commence business activity under the Licence within a year from its incorporation, or suspension of the business activity under its Licence for a year; 
2. A company acts in contravention of the JAFZA Laws or other applicable laws;
3. A Company’s failure to renew the Licence;
4. Termination of the License of the Company by the Registrar; and 
5. Under an order of a court for winding up the Company. 

However, even in a Registrar-initiated winding up, a liquidator would be appointed to handle the process, or in case of a court-ordered winding up, the court may appoint the liquidator. 

1. Insolvency and court-ordered liquidation:

If a JAFZA company becomes insolvent or is financially distressed, the UAE federal bankruptcy law applies. The previous law (Federal Decree-Law Number 9 of 2016 on Bankruptcy) is being replaced by Federal Law Number 51 of 2023. In any case, free zone companies other than those in DIFC/ADGM with their regimes fall under the UAE Commercial Insolvency rules. This means creditors or the company can petition a UAE court for restructuring (preventive composition) or liquidation. The procedure (under Federal Bankruptcy Law) may involve court approval of a restructuring plan or appointment of a judicial liquidator. JAFZA itself does not have a separate insolvency tribunal; insolvent cases are handled by Dubai courts under the federal law. In practice, JAFZA-authorised liquidators can liquidate the company under JAFZA rules if a restructuring is not sought. 

1. Public Listed Company winding up:

For a Public Listed Company (PLC)in JAFZA, there is a special provision: JAFZA regulations state that the liquidation of a PLC must be carried out “by the Markets Laws and the law of the Dubai International Financial Centre relating to insolvency of Companies, as amended. 

Since many JAFZA PLC would list on NASDAQ Dubai, which is within the DIFC jurisdiction, it appears JAFZA intends for any insolvency or winding-up of a PLC to follow DIFC’s insolvency law, which is a common law-based regime in coordination with the exchange’s rules. In practice, this likely means a PLC’s insolvency would involve the DIFC Courts and the DIFC Insolvency Act if the company is listed there, providing a framework familiar to international investors. This is a niche situation, but it underscores JAFZA’s effort to align PLC procedures with international standards for listed companies.

PROCEDURE FOR LIQUIDATION

Whether voluntary or compulsory, the liquidation process in JAFZA follows a set procedure largely in line with international norms. The steps include:

1. The appointed liquidator takes charge of the company’s affairs. The powers of the company’s directors cease, except as needed to assist the liquidator. The liquidator’s duties include preparing a statement of assets and liabilities, keeping liquidation records, collecting the company’s assets, settling and closing bank accounts, representing the company in legal proceedings, paying debts, and ultimately distributing any remaining assets. The liquidator must act in the interests of creditors and shareholders to wind down affairs properly.
2. The liquidator must notify all creditors via registered mail about the commencement of liquidation and invite them to submit their claims. Moreover, a notice of the liquidation must be published in two local newspapers (one Arabic, one English), giving creditors at least 45 days to present any objections or claims. 
3. During the liquidation period, the company should not undertake new business. The liquidator will realise (sell) the company’s assets as needed to pay off liabilities. The JAFZA regulations specify the order of distribution: first, amounts owed to JAFZA (the Authority) are to be paid, then the costs of liquidation (including the liquidator’s fees), then all other creditors pro rata, and finally any surplus to the shareholders pro rata. If a creditor does not come forward despite notice, the liquidator should deposit that creditor’s funds with the court for safekeeping. 
4. Once all affairs are wound up, the liquidator will prepare a final liquidation reportand submit it to the JAFZA Registrar. If the Registrar is satisfied that the liquidation has been completed by the rules, the Registrar will cancel the company’s license, terminate any contracts the company had with JAFZA (like the lease), and remove the company from the JAFZA Companies Register. At that point, the company ceases to exist. JAFZA may also inform other authorities (like the Ministry of Economy) of the company’s dissolution.

In sum, JAFZA provides a clear exit mechanism for companies: an orderly liquidation through the free zone if solvent, or a comprehensive bankruptcy process through UAE courts if insolvent. JAFZA prioritises any outstanding dues to the free zone in a liquidation, and will not release the company until, for instance, the lease is terminated and any penalties are paid. Additionally, free zone companies must cancel any visas and clear immigration or customs obligations as part of the closure. Once all is done, a well-handled liquidation in JAFZA allows investors to exit with minimal fuss, whereas the federal insolvency law offers a safety net in more dire financial situations, ensuring fairness among creditors and a chance for restructuring if viable.

DISPUTE RESOLUTION FOR JAFZA COMPANIES

When disputes arise involving a JAFZA company, whether commercial disputes with business partners, conflicts among shareholders, or issues with regulators, it is important to understand the forums and mechanisms available for resolution. JAFZA companies have access to multiple dispute resolution avenues, JAFZA’s administrative dispute process, Dubai courts, specialised free zone arrangements (DIFC Courts), and arbitration.

1. JAFZA authority and administrative disputes:

Some disputes, especially those between a company and the JAFZA Authority, for example, over fines, penalties, or lease issues, may be addressed administratively. JAFZA has a structured compliance and enforcement system; if a company violates free zone rules, JAFZA can impose penalties or suspend the license. In such cases, the company can usually engage with JAFZA’s management to seek a resolution or reconsideration. There isn’t a formal “JAFZA court,” but the Authority may have internal committees to hear grievances. Since JAFZA is under the Dubai government structure, a dispute with the Authority could be escalated to the Dubai Courts via an administrative case, but this is uncommon – most companies prefer to settle matters amicably within JAFZA.

1. Dubai Courts: 

By default, any civil or commercial dispute involving a JAFZA company that is not resolved by other means falls under the jurisdiction of the Dubai Courts, which are the ordinary courts of the Emirate of Dubai. JAFZA companies being registered in Dubai are treated as Dubai-based entities for litigation purposes. For example, if a JAFZA company has a contract with an overseas supplier and the contract is silent on jurisdiction, the supplier could sue the JAFZA company in the Dubai Courts. The Dubai Courts would apply UAE civil procedure and substantive law or contractually agreed law. It’s important to note that JAFZA companies are not under a separate legal system like DIFC; they ultimately answer to the Dubai Courts system for litigation. However, there are alternatives that parties can opt into. 

1. DIFC courts and the JAFZA - DRA arrangement:

Recognising the international nature of JAFZA businesses, a significant development was the Memorandum of Understanding between JAFZA and the Dispute Resolution Authority (DRA) of the Dubai International Financial Centre (DIFC), signed in 2016. The DIFC DRA includes the DIFC Courts, which are English-language common law courts operating in Dubai, independent of the Dubai Courts. Under the MoU, JAFZA member companies can opt for DRA’s suite of dispute resolution services, including DIFC Courts’ Small Case Tribunal. 

In practice, this means that a JAFZA company can agree with another party that any disputes between them will be resolved by the DIFC Courts rather than Dubai Courts. By including an appropriate jurisdiction clause in contracts, for example, “Any dispute arising from or in connection with this contract shall be subject to the exclusive jurisdiction of the DIFC Courts”. JAFZA companies can take advantage of the DIFC’s judicial system. The DIFC Courts are often favoured in international contracts for their efficiency, use of English, and familiarity with foreign investors. 

The cooperation between JAFZA and the DIFC’s DRA was aimed at providing more options and confidence to investors.It does not mean DIFC law automatically applies in JAFZA, but it means JAFZA companies can voluntarily use DIFC dispute mechanisms.

1. Arbitration (DIAC and others):

Arbitration is a popular dispute resolution method in the UAE, and JAFZA companies frequently include arbitration clauses in their contracts. The Dubai International Arbitration Centre (DIAC) is Dubai’s primary arbitration institution. As of 2022, DIAC has updated its rules and is positioned as a leading centre for commercial arbitration in the region. DIAC offers services in multiple languages, including English, and has a roster of experienced arbitrators from around the world. An advantage of arbitration is that it’s usually faster and confidential, which businesses prefer to avoid publicity of disputes. 

For JAFZA companies, arbitration can be particularly useful for international contracts. Arbitral awards from DIAC (or other recognised centres) are enforceable in UAE courts. In any case, an arbitration clause in a contract involving a JAFZA company will be upheld by UAE courts, and upon conclusion, the award can be ratified by the Dubai Courts for execution against the losing party’s assets if needed. JAFZA itself, in a recent insight, emphasised the advantages of ADR, including arbitration, for free zone companies, noting that ADR mechanisms like arbitration and mediation help businesses avoid the delays of traditional litigation and maintain confidentiality. Given JAFZA’s international environment, arbitration provides a neutral ground, which is sometimes preferred by foreign investors over local courts. 

CONCLUSION

Setting up a company in Jebel Ali Free Zone (JAFZA) is a legally streamlined process that offers 100% foreign ownership, a range of entity types to suit different business needs, and alignment with international best practices. With the introduction of updated regulations, the JAFZA Companies Implementing Regulations 2016 and subsequent amendments, JAFZA has modernised its corporate framework, eliminating minimum capital requirements, introducing Public Listed Companies for capital markets access, and simplifying conversions and share structures. The process of incorporation has been made straightforward, supported by clear guidelines on documentation and an efficient one-stop administration in the free zone. 

In summary, establishing a company in JAFZA involves understanding the specific free zone company forms (FZE, FZCO, Branch, PLC), preparing the right documents in line with the latest regulations, following the step-by-step incorporation procedure, and being mindful of ongoing compliance (renewals, UBO filings, etc.). With proper planning and use of the legal tools available, investors can leverage JAFZA as a springboard for regional and international business, under a regime that protects their interests and provides recourse in law for any eventuality. 

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8. https://www.tamimi.com/law-update-articles/an-overview-of-the-new-jebel-ali-free-zone-company-regulations/#:~:text=has%20maintained%20these%20forms%20but,is%20extended%20by%20the%20Registrar
9. https://infibiz.ae/business-setup-in-dubai-with-jafza-free-zone-license/#:~:text=Business%20Setup%20in%20Dubai%20with,business%20involves%20importing%2Fexporting%20goods%2C
10. https://www.difccourts.ae/media-centre/newsroom/jafza-and-difc-courts-make-life-easier-business#:~:text=Dubai%2C%20United%20Arab%20Emirates%2C%20October,Tribunal%20of%20the%20DIFC%20Courts
11. https://www.jafza.ae/resource-centre/insight/the-dubai-international-arbitration-centre-diac-and-the-advantages-of-alternative-dispute-resolution/#:~:text=tier%20dispute%20resolution%20services%2C%20DIAC,of%20disputes%20across%20diverse%20sectors
12. The Jebel Ali Free Zone Companies Implementing Regulation 2016
13.  JAFZA Rules, 2023 Ninth Edition