You have a free zone licence, a showroom or a small warehouse, and customers who want to pay by card. The first thing you search for is a POS machine. Two different questions are hiding in that search. One is about payments: who will give a free zone company a card machine. The other is about records: what system will bill, track stock and report VAT for the kind of business a free zone company usually is. They have different answers and different suppliers.
The card machine: your provider decides
Card machines are issued by banks and payment providers. For a free zone company they will ask for the licence issued by your free zone authority, the company's documents and usually a business bank account. Each provider has its own view of which activities and which zones it accepts, so apply to more than one and ask early. No software company can promise the outcome. The difference between the card machine and the till is set out in POS machine in the UAE: card machine or POS system?.
Check what your licence lets you sell
A free zone licence lists your activities and, in practice, where you may carry them out. Selling from a showroom inside the zone, selling to companies on the mainland and running a shop for the public are not the same thing. Before you fit out a counter, ask your free zone authority or business setup adviser what your licence covers. The POS can be configured for any of these, but it should be configured for the one you are allowed to do.
VAT questions to settle first
The UAE charges VAT at 5%, administered by the Federal Tax Authority, and free zone companies are not outside it simply because they are in a free zone. Some zones are treated as designated zones, where certain movements of goods are handled differently. Which of your sales carry VAT, and at what treatment, should be written down by your tax adviser before any item is set up. The POS then needs a tax setting per item and per type of customer, so each invoice is right without the cashier deciding. What the software has to do after that is covered in UAE VAT in your ERP and POS. Confirm every VAT point with your tax adviser.
What the POS must do for a free zone business
| Business | What matters most | Why |
|---|---|---|
| Trading company with a showroom | Tax invoices with the customer's company name and TRN, quotations, credit terms | Most buyers are companies, not walk-in shoppers |
| Warehouse or distribution | Stock by location, delivery notes, partial deliveries, serial or batch numbers | The sale is often delivered later and in parts |
| Café or minimart inside the zone | Fast billing, card and wallet closing, recipes or barcodes | It is an ordinary retail counter that happens to be in a zone |
| Online store run from a free zone | Orders from the website on the same stock, courier labels, returns | The counter is a web page |
The first two rows are closer to an ERP than to a till. If most of your sales are invoices to companies, with payment thirty days later, you need customer accounts, statements and stock by location more than a cash drawer. POS versus ERP for a growing shop explains where that line sits.
Setting up, in order
Confirm your licensed activities
Ask your free zone authority what you may sell, to whom and from where.
Get the VAT treatment in writing
Your tax adviser lists which sales carry VAT and how each should appear on the invoice.
Apply for the card machine
Approach more than one bank or payment provider, and ask whether the machine can be linked to a POS.
Choose the POS for your kind of sale
Counter receipts, company invoices, deliveries or online orders decide the software.
Test real documents
Print a receipt, a tax invoice to a company and a refund, and show all three to your tax adviser.
Go live on one counter
Run it for a week, compare the card slip with the POS report every evening, then add the rest.
Where Operix stands
Operix Systems builds POS systems for businesses in Dubai and the UAE, and the ERP software a trading company usually needs behind it. We work remotely from Karachi, one hour ahead of UAE time, and have no office in the Emirates. We do not issue card machines, give licensing advice or act as tax agents. Our UAE work so far is websites, including one for NHK Logistics, a Dubai freight forwarder.
If you already know what your licence and your tax adviser allow, book a demo and we will show you the invoice, the stock screen and the closing report on your own items.
Questions people ask
Can a free zone company get a POS machine in the UAE?
Yes, in many cases. Card machines come from banks and payment providers, who ask for the free zone licence and company documents and make their own decision. Apply to more than one.
Does a free zone company charge VAT at the till?
Being in a free zone does not by itself remove VAT. Some zones and some goods are treated differently, so ask your tax adviser which of your sales carry VAT before the POS is set up.
Can a free zone company sell to walk-in customers?
It depends on the activities on your licence and the rules of your free zone. Ask your free zone authority or business setup adviser before opening a counter.
Is POS software different for a free zone company?
The software is the same. The setup differs: tax settings per item and customer type, invoices to companies with their TRN, and often stock by warehouse location.
Do I need a POS or an ERP?
A counter with walk-in sales needs a POS. A trading company that invoices other companies on credit usually needs an ERP with a sales screen, because customer accounts and stock by location matter more than the till.
