The difference between mainland and free zone companies in UAE The most frequently asked question by entrepreneurs looking to start a business in mainland Dubai or the Dubai Free Zone is, "What's the difference?" In this blog, we will discuss some basic differences so that you can make informed decisions about what is best for your company.
1. What is the difference between Dubai Mainland and Dubai Free Zone companies? Mainland Companies: In Dubai, the mainland company is also referred to as the Onshore Company. It is licensed by the Dubai Department of Economic Development (DED) and allows companies to operate in the local market as well as outside the UAE without restrictions. Free Zone Companies: Companies established in the free zone of any emirate of UAE are known as free zone companies. They are tax-free and have other benefits.
2. What are the differences in ownership structure? Mainland Business: Foreign investors can own only 49% of the company. To set up a business in Dubai Mainland requires a local sponsor, who must own 51 percent of the company. It also refers to the type of license you are getting. If you have a commercial license, you own 49 percent of the company. If you have a professional license, you will own 100% of the company, with one UAE national serving as a Local Service Agent. Free Zone Companies: If you set up a company in Dubai Free Zone, it belongs to you. You have complete control over your company's operations. It does not require a local investor.
3. What are the operational structure differences? Mainland Businesses: If your company is based on the mainland of Dubai, you are permitted to conduct business anywhere in the UAE,