Business Set up in Dubai
Mainland I Freezone I Offshore
What is Mainland in Dubai?
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.
What are the benefit of choosing Mainland in Dubai?
-
Business activities are not limited
-
Operate anywhere inside and outside the country
-
Easy employment visa processing and no restrictions on the number of visas
-
Allowed to work for the government
-
100% exemption from corporate and personal taxes
-
No currency restrictions for mainland business
What is Freezone Company in UAE?
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.
What are the benefits of choosing Freezone in UAE?
-
100% ownership without the need of UAE sponsor
-
Provision of Complete Ownership of the Company
-
Absence of taxation
-
Plug and Play Office Spaces
-
Free zones provide business advice and networking support
-
Option to incorporate remotely
What is Offshore Company in UAE?
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
What are the benefits of choosing Offshore Company in UAE?
-
Low Startup cost
-
Obligation of being a shareholder of free zone or mainland business
-
100% tax-free
-
100% foreign ownership permitted
-
NO paid-up share capital or audit requirement
-
Option to incorporate remotely
Detailed Comparison : Mainland vs Freezone
Ownership Of Business
Mainland
-
Previously, one had to look for an Emirati national to give them 51% of the ownership of their own company as an obligation to set up a mainland company. But it was June 1, 2021 only. Now you can fully own your mainland company after the UAE’s Ministry of Economy amended Commercial Companies Law (CCL), allowing foreign investors and entrepreneurs to establish and fully own onshore companies.
Freezone
-
Free zones have no such restriction nor need for local sponsors as you enjoy complete ownership from day one.
Business Scope
Mainland
-
Business activities for a company set up in the mainland can be easily conducted as these companies are able to engage in trade across all locations, abroad or locally.
Freezone
-
A free zone company cannot do business outside the free zone without the help of a local agent. A special concessions offered like a DET permit can extend your level of activity.
Office Space
Mainland
-
A mainland company must have a minimum of 200sqft for a physical office. After securing the required space, the DED will issue a license for your company.
Freezone
-
It is not mandatory for free zone companies to ensure a physical location as many free zones allow companies to have virtual workplaces.
Business Set up Proposal
Mainland
-
The mainland companies need to seek approvals from various government bodies like the Department of Economic Development, Dubai Municipality, Ministry of Labour etc.
Freezone
-
Each free zone follows its own laws and regulations for any new businesses established inside its jurisdiction. Furthermore, you do not need permission from non-free zone government authorities or agencies to start your company in a free zone
Audit
Mainland
-
The mainland companies need to seek approvals from various government bodies like the Department of Economic Development, Dubai Municipality, Ministry of Labour etc.
Freezone
-
Each free zone follows its own laws and regulations for any new businesses established inside its jurisdiction. Furthermore, you do not need permission from non-free zone government authorities or agencies to start your company in a free zone
Visa Requirement
Mainland
-
Mainland companies are not subject to any visa restrictions; however, the number of visas issued is dependent on the workspace area. So if your company requires additional visas, it first has to acquire or rent a larger workspace.
Freezone
-
Free zone companies do have restrictions on the number of visas they can apply for based on the jurisdiction. Typically, the number of visas available depends on the free zone regulations and ranges from 1 to 6.