There are several opportunities for entrepreneurs who want to start a business in Dubai, but the first and most crucial decision is determining whether to form a corporation on the Mainland or in a Free Zone. These modifications have a significant impact on the company's operations, legal standing, and growth prospects.

Each of the strategies under consideration is beneficial and accompanied with specific peculiarities depending on the business requirements and goals. In this thorough article, we will look at all of the major differences between Mainland & Freezone Company In Dubai so that you can make the best decision for your business.

But one of the most frequent queries from those looking to launch a company in Dubai is whether they should register their company in a free zone or on the mainland.

 

What is mainland Company in Dubai

 

A mainland business can therefore be described as an off-shore company incorporated in accordance with the laws of Dubai and with the operations being governed by the UAE Commercial Agency laws. During its incorporation it is supposed to have a local partner who is supposed to hold not less than 51% share of the equity in the firm. Besides, it was provided with a trade license from the Department of Economic Development of the Emirate, that enable the company to trade and trade in Dubai in any form which is permissible under the laws of UAE and the local market of UAE.

 

What is freezone Company in Dubai

 

 The free zones of Dubai operate as separate jurisdictions and therefore, are governed by their own laws. Every free zone has a category like healthcare to which prospective firms must conform to in the establishment of their businesses. While these laws do not apply to Dubai or UAE, 100% foreign-owned businesses can be formed although direct trading with the local market is not allowed.

 

Advantages of Mainland Company in Dubai


Trade Free

Companies based on the mainland are free to conduct business anywhere in the United Arab Emirates or even outside its borders.

 

Flexible Office Space

Mainland businesses are free to set up several business branches and choose any site for their main office in Dubai.

 

Contracts with Governments

Businesses based on the mainland are able to complete government and commercial contracts.

 

Advantages of Freezone Company in Dubai

 

Complete Foreign Ownership

Foreigners have complete control over their businesses in the free zone.

 

Tax Exemptions

Freezone companies enjoy corporate tax exemptions as they are governed by their own regulatory authorities.

 

Benefits of Import and Export

Businesses operating in free zones are not required to pay customs charges and benefit from import and export fees.


The difference in Mainland and Free zone Company in Dubai


Points Mainland Freezone

Market Access

 Full access to the UAE market

Restricted to Free Zone and international trade

Business Activities

 Wider range of activities allowed

May have limitations depending on the Free Zone

Ownership Structure

Local sponsor holds 51% (Service Agent)

100% foreign ownership

Tax Advantages

Limited tax benefits

Corporate & import/export tax exemptions (within Free Zone)

Business Setup Time

Longer and more complex process

Faster and streamlined setup process

Reputational Benefits

Often perceived as more established

May be viewed as less established locally

 

 

 

Can a free zone company trade in UAE?

Normally, Freezone companies are unable to engage directly in trading activities within the UAE mainland. Selling through a Distributor: Another strategy could be finding a local distributor that can sell your products or offer your services within the UAE market.



Setting Up a Branch: However, in some occasions the Free Zone authorities may permit you to open a branch in the Mainland to conduct certain operations. 


Freelance Permits: It may also be possible to secure a freelance permit to work within the UAE if your business includes performing freelance services.

 Important Note: The laws governing the Free Zone business involve trading within the mainland of UAE may differ from one Free Zone to another depending with the type of business.

Can a mainland Company Trade in UAE ?

 

The local companies from the mainland has free access to the whole of the UAE market. They are allowed to engage in export and import activities with other emirates, set up stores, and bid for government contracts.

This makes it ideal for businesses that Perhaps this comparison of the mainland business and the free zone business may have provided an orientation on how business is done in the two zones. But in actuality, establishing a business in either location could entail a number of documents and necessary requirements that align with their own national laws.