Differences between a Mainland and a Free Zone Company in the UAE
Starting a business in the UAE is not an uphill task particularly if you have a fair idea of the rules and regulations, of the UAE Mainland Meaning and the UAE free zone legal entities.
The UAE Mainland
The mainland company in UAE can conduct its business in the UAE and outside the country. There are no any restrictions in this regard.
Mainland ownership structure
Commercial License: According to UAE company law, a mainland Dubai company requires a local partner with 51% shares and 49% shares divide in all expat partners.
Professional license: 100% shares are owned by expat partner and one UAE National is appointed as a Local Service Agent.
Industrial License: An Industrial License is used for Process Manufacturing and industrial purpose in UAE
For a Mainland Company Formation in Dubai, the minimum office space required is about 200 sq. fit
There is no limitation of visas on the mainland license
- You can choose any area for your office premises in Dubai, as per your budget and business aims.
- You will have the opportunity for a wider sphere of business activities.
- Your business ideas may get more widened as you get more exposure and the scope of various opportunities.
- Your trade is not limited to the UAE only, but you have the freedom to trade outside the UAE too.
You cannot retain a full ownership of your business.
Office rent and Labor accommodation are expensive
The Free zone
A Free Zone is also known as free trade zones. These Free Zone Area specially designed to set up the industry of a specific category. The main purpose of having a free zone establishment is for imports and re-exports. There are many free zones in the UAE.
The Free zone Ownership
Here the foreign investors can retain 100% ownership of their businesses without the need for a local partner.
Unlike Mainland, free zone license can be incorporated with or without physical office.
This facility of “plug in and go” business desks are also referred to as Flexi Desks/Smart offices. Office rent and Labor accommodation are also cheap and affordable in comparison to a mainland company.
Usually every Free Zone license offers 2 visas on the smart office package. However, different free zones in UAE allow 3 – 6 visas on the smart office package
Advantages of Free zone
There is no need for UAE National partner/service
As many of the UAE free zones are sector specific it gives its entrepreneurs ready access to a hub of knowledge and information.
Free zones are 0% corporate and income tax rate, no customs duties levied on imports and exports, and there are options to repatriate 100% of the profits from the business.
Disadvantages of a free zone
In Disadvantages of Free zone companies in Dubai, you are not allowed to make the trade in the local market directly.
The Free Zone Area specially designed to set up the industry of a specific category so the scope get limited.
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