Free Zone
Free economic zone
- What it is
- A special economic area with a preferential regime for business
- What it gives
- Tax incentives, simplified registration, full foreign ownership
- The main restriction
- Operating on the country’s domestic market is usually restricted or requires separate conditions
- What to check
- The type of licence, permitted activities, office and visa requirements
- A common misconception
- That a company in a free zone automatically gives a residence permit
In plain words
A free economic zone is a special area with a preferential regime for business. Companies registered in such a zone usually receive tax incentives, a simplified registration procedure, the possibility of full foreign ownership and an easier procedure for obtaining work visas for employees.
In return, a key restriction applies: activity on the country’s domestic market, outside the zone, is as a rule restricted. Working with local clients may require a separate licence, a local partner or registering a company outside the zone. The format is aimed primarily at international trade, services and export production.
Two practical points. First: the type of licence determines what exactly the company may do — trading, services, manufacturing; going beyond the licence breaches its conditions. Second: a company in a free zone does not in itself equal a residence permit. Residence visas are usually linked to the company, but this is a separate procedure with its own requirements for the office, staff and activity.
When this format is considered
What to check
- Permitted activities
- Type of licence
- Scope for expansion
- Tax regime
- Cost of registration
- Annual renewal
- Office requirements
- Visa quota
- Staff
- Operating on the domestic market
- Banking services
- Reporting
How to choose a zone
- 01Define the activity
- 02Select the zone and licence
- 03Check the office requirements
- 04Register the company
- 05Arrange visas and an account
What you need to know
- Operating on the domestic market is usually restricted
- The type of licence determines the permitted activity
- Office requirements affect the visa quota
- A company in a zone does not equal a residence permit
- Conditions and benefits differ between zones
Common mistakes
- Choosing a zone solely on registration cost
- Planning to work with the local market without checking the conditions
- Taking a licence that does not cover the real activity
- Assuming the company automatically gives resident status
- Not taking into account the annual renewal costs
What this means for a BRIDGES client
We work through the format for your actual activity: where the clients are, whether the domestic market is needed, how many employees, whether visas are needed. A free zone is a good tool, but only for the right task.
Frequently asked questions
01 /What is a free zone?
A special economic area with a preferential regime: tax incentives, simplified registration, full foreign ownership.
02 /Can I operate within the country?
As a rule, only to a limited extent. Working with the local market usually requires a separate licence or a company outside the zone.
03 /Does a company give a residence permit?
Not automatically. Residence visas are linked to the company, but this is a separate procedure with its own requirements.
04 /How should a zone be chosen?
By the type of activity, available licences, office requirements, the visa quota and running costs.
05 /Is it easy to open an account?
It depends on the zone and the activity. The banking question should be clarified before registration, not after.
06 /What are the annual costs?
Licence renewal, office or workspace rent, visa costs, accounting and reporting.
See also
Read next
This material has undergone editorial review by BRIDGES.
Setting up a company abroad?
We will select the format for your activity — taking account of the market, visas and banking.