Business setup in Dubai mainland allows companies to trade within the local markets as well as conduct business internationally. The company is registered under the government authority which is the Department of Economic Development (DED) — the relevant emirate’s DED will resort to handling the registration process. Mainland companies are allowed to carry out business without restrictions throughout the UAE and internationally.
Even if there are many benefits in establishing a company in the mainland, it has a little downside because a foreign individual needs a local sponsor before being able to go forward with their venture. This local sponsor should be a UAE national. A local sponsor owns at least 51% of your business when it is already established. Local sponsor can be three types: individual sponsorship, corporate sponsorship, or local service agent.
Free zones are economic areas where goods and services can be traded. A free zone authority is basically a location in the UAE that has its jurisdiction in the said location. It has its own set of rules and regulations. Companies that are established in a free zone are allowed to do business in there or outside the UAE. Essentially, free zones in Dubai are business zones where companies operating in them are exempt from all types taxation such as Value Added Tax (VAT), Income Tax, Corporate Tax and Customs. Companies that are established in free zones can enjoy 100% ownership without needing any local sponsorship as a contrast to establishing a company in the mainland.
A free zone optimizes the movement of goods between the individual countries in the zone and offers the opportunity to either secure or disallow imports from third party countries. The most important types of free trade zones are free zones, free port zones and export processing zones.
These companies are located in a different place from where the business owner lives and the business setup is in another jurisdiction than that of the UAE. Offshore licenses are typically used as holding companies and are mainly incorporated for operations in foreign countries with financial, legal and tax benefit purposes. Offshore companies are permitted to open a bank account in the UAE but they cannot issue work visas or have a physical office within the country.
An Offshore Company is a legal business entity that is set up with the intention of operating outside its registered jurisdiction and/or the location of its ultimate ownership. Providing a vehicle to separate or protect assets, such as Intellectual Property, from operating entities