Companies set up virtual offices in local free zones
High operating costs push companies to take up virtual and e-office licenses.
Free zones in Fujairah, Ajman, Hamriyah (Sharjah) and Ras Al Khaimah are attracting new companies keen to set up base in the country with virtual and e-office options; an alternative to paying high operating costs to set up physical offices in the emirates of Dubai and Abu Dhabi.
A study by Jitendra Business Consultants, a division of Jitendra Chartered Accountants, showed that companies are increasingly paying attention to the benefits of obtaining virtual office, e-office and Flexi-Desk licenses.
The Fujairah Free Zone's Virtual Office includes the address and contact numbers of the office, complete with meeting rooms. The e-office centre in the Ajman Free Zone and Sharjah (Hamriyah) Free Zone includes a dedicated business desk, boardrooms, meeting halls, high speed internet access and even a restaurant.
RAK Free Trade Zone uses a service called 'Flexi-Desk', which is a shared and networked desk, designed for single person users such as self-employed businessmen or establishments. It includes a furnished and semi-enclosed office with one executive desk and chair, along with a private email address and even a separate post box number.
"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," said Jitendra Gianchandani, managing partner, JBC.
"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," Jitendra added.
The cost of establishing a company, including first year fees and refundable deposit, in Fujairah is $6131, $6934 in Ajman, $5562 in Hamriyah (Sharjah) and $6812 in Ras Al Khaimah.
Comparatively, the costs involved in more well-known free zones in Dubai are much higher. For example, in DAFZA it is $73217 onwards, $18079 onwards in JAFZA and $9487 onwards in Dubai Internet City.
Some of the companies that have already obtained such Virtual Office, e-office and Flexi-Desk licenses through JBC include Daedalus, Marigold, SSIG Group, LCC Strategies, AIC Industrial Consultancy and Confirmax.