Free Zone vs. Mainland UAE Differences Explained

1. FREE ZONE VS. MAINLAND UAE DIFFERENCES EXPLAINED

2. There are many foreigners willing to start their own businesses in the UAE. From the exceptional tax benefits to easy trading routes, there are many benefits that attract these participants. While the process is streamlined and can easily be accessible to anyone with the right set of documents, there is a base question that is required to be answered: mainland vs freezone? In this blog, we will discover the meaning of the two along with their differences and benefits to help you make a final decision for your business.

3. MAINLAND VS FREEZONE UNDERSTANDING THE TWO Two important business formation choices in the United Arab Emirates are mainland and free zone firms. Mainland businesses are permitted to conduct business both domestically registering with the Department Development (DED). They can also bid on government contracts and engage in direct trade with the local market. and abroad of after Economic Free zone businesses, on the other hand, are based in specific locations and enjoy simplified procedures, complete foreign ownership, and tax benefits. They are not allowed to deal directly in the local market without a distributor, nevertheless.

4. MAINLAND COMPANY FORMATION IN DUBAI The UAE’s mainland firms provide a great deal of business flexibility and are registered with the Department of Economic Development (DED). These businesses are free to operate both inside and outside the United Arab Emirates, provide visas, and even place bids for government contracts. The UAE’s mainland firms provide a great deal of business flexibility and are registered with the Department of Economic Development (DED). These businesses are free to operate both inside and outside the United Arab Emirates, provide visas, and even place bids for government contracts. Compared to other business formats, establishing and running a mainland company in UAE involves navigating a more complicated regulatory environment, despite the fact that it offers more freedom. Depending on the sector and region, businesses may be subject to different licensing and regulatory requirements. In spite of these factors, mainland corporations continue to be a desirable choice for enterprises looking to expand their operations and gain access to the UAE market.

5. FREEZONE COMPANY FORMATION IN DUBAI Freezones are special economic zones that are usually industry specific and offer top notch business facilities to entrepreneurs. There are over 45 freezones in the United Arab Emirates’ and each has its own regulations. A firm that is registered in one of these zones is known as a free zone corporation. These businesses can function both inside and outside of the free zone (internationally) while taking advantage of tax-free advantages. They are unable to conduct direct business on the UAE mainland, nevertheless. speaking, freezone business setup is quicker and simpler than starting one on the mainland. Generally

6. DIFFERENCE BETWEEN FREEZONE VS MAINLAND COMPANY FORMATION Here are some points that will help to understand UAE mainland vs freezone better: Criteria Mainland Free Zone Previously required 51% Emirati ownership. Now allows 100% foreign ownership for specific activities. Offers 100% foreign ownership from the outset with no need for a local sponsor. Ownership Each freezone has its own independent regulatory authority. Mainland is regulated by the Department of Economic Development (DED). Regulatory body Restricted to operating within the free zone unless using a local agent to trade in the UAE. Can operate anywhere in the UAE, including the local market, without restrictions. Market access You can choose from the business activities that may be allowed in particular selected freezone. Can operate anywhere in the UAE, including the local market, without restrictions. Business scope

7. Typically physical office space is required to obtain a license. Physical office space is optional; virtual offices are allowed in many free zones. Workspace Limited visa quotas, typically ranging from 1 to 6, depending on free zone regulations No restrictions on the number of visas; depends on workspace size (larger office, more visas). Visas Requires approvals from multiple government agencies like DED, municipalities, and Ministry of Labor. Business Setup Approvals Requires free zone authority’s approvals, with clearance from external agencies as may be needed. Audit requirements vary; only Specific entities like FZE and FZCO need yearly audits. Mandatory to prepare a financial audit at the end of each fiscal year. Company Audit

8. BENEFITS OF MAINLAND COMPANY FORMATION Mainland offers a wide range of facilities and advantages over the freezone company formation. Let us look at this list of benefits: 02 03 04 01 05 Tax Benefits Repatriation of Profits Government Contracts Visa Flexibility Freedom to Operate Take advantage of a 100% personal tax exemption and low corporate tax rates. There are no limitations on your ability to do business anywhere in the United Arab Emirates. You are free to return all of your capital and profits. You are not limited in how many visas you can grant to your staff members. Get the chance to work on and bid on government contracts in the United Arab Emirates.

9. 06 07 Access to International Markets Acquire unfettered access to international markets. Business Expansion Increase your presence in the local market and open several company branches within the registered emirate

10. BENEFITS OF FREEZONE COMPANY FORMATION There are several benefits of a company formation in the freezone. Below is the list of all the points that favour the freezones. 02 03 04 01 05 06 Flexible Hiring Support and Guidance Tax Benefits Complete Foreign Ownership Simple Setup Business Privacy Take advantage of a 100% import and export duty exemption. Additionally, you are free to repatriate all of your capital and earnings. In general, establishing a business in a free zone is quick and simple. YFree zones provide networking opportunities and helpful business advice. It’s relatively easy to find and hire staff. The information about your company’s shareholders is kept private. You don’t require a local Emirati sponsor to fully control your company.

11. How to choose between MAINLAND VS FREEZONE FOR BUSINESS SETUP You might be thinking about how to select the ideal jurisdiction for your business setup in Dubai. Here are some questions that will make the decision easier for you: What business activities you want to carry on? 3 Who is your target market? 1 The jurisdiction you choose should support the business operations you plan to carry on. There may be certain activities that some freezones may not support. For those looking to expand their business operations across the UAE, mainland company formation may be a better choice. Those looking to target more international clients can choose freezone business What is your visa requirement for employees? What business ownership rights do you want to enjoy? 2 4 If you want to enjoy 100% ownership of your business, consider freezones. On mainland, though now complete foreign ownership is permissible, yet some activities may need partnering with local sponsors On the mainland, businesses usually get higher visa quotas which depend on the size of the office. So, if you are looking for huge number of employee visas, you can consider mainland. What is your budget for business setup? 5 For startups and those looking for low cost business setup in UAE, freezone company formation may be a better choice as the cost of setup is lower in comparison with mainland business setup. Still in doubt? Book a consultation with our expert to get a clearer picture.

12. For someone looking to setup a company in UAE, mainland vs freezone remains a major concern. Though each jurisdiction has its own advantages, but it’s important to find out what works best for your business. Dubiz Business Setup is a firm that deals with company formation in UAE. Our experts can guide you throughout your business formation journey in Dubai. From selecting the suitable economic zone and getting your company name registered to submitting the required documents to the respective authorities, we guide and assist you throughout the process. Let us make your business setup in Dubai easier.

13. CONTACT US +971 563695485 dubiz.co info@dubiz.co Office number 2908, Al Manara Tower, Business Bay Dubai.