What is the Difference Between Free Zone and Mainland Company in the UAE?

Difference Between Free Zone and Mainland Company

What is the Difference Between Free Zone and Mainland Company in the UAE?

Dubai offers a plethora of lucrative prospects for business owners and Indian investors looking to explore this market. You can opt for a free zone company registration in Dubai or go for a mainland company registration in Dubai too.

Furthermore, businesses of all types and sizes thrive in the UAE, allowing expats to pursue their ambitions in the region. Once you’ve arrived in Dubai, you’ll need to decide where you want to start your business.

It might be a mainland firm set up in Dubai, where you register an LLC with 100% ownership and have easy access to the local market. On the other hand, you can choose any of the free zone administrations as well. Entrepreneurs in India can simply connect with the business consultants at Shuraa Business Setup. We manage all the legalities related to company formation in the UAE.

Mainland Company Registration in Dubai

Any corporation located on the mainland is considered an inland company, meaning it’s not bound by any legal geographical limits. Moreover, Dubai mainland business setup allows you to conduct business both locally and internationally.

For both commercial and professional licenses, you have the freedom to trade within and beyond the UAE. In addition, for all mainland businesses, the Department of Economic Development (DED) takes care of licensing and regulations.

By working with Shuraa Business Setup, you can have complete operational control over your mainland business setup in Dubai. Furthermore, we become your sleeping or silent partners and don’t interfere with your operation for a small annual charge.

Mainland Business Setup – Is It For You?

Depending on the business operations and other requirements, you should have a clear grasp of the optimal business location for your organization. Here are a few things to think about:

1. Investors Interested in Obtaining Government Contracts

The UAE’s government projects are safe, long-lasting, and provide chances for skill development. As a result, if you want to work in the government sector, a mainland business in Dubai is the way to go.

2. Utilize Dubai’s Lucrative Local Marketplace

Is your target audience based in the mainland? Do you need to travel to other Emirates? What is the percentage of your customer base that’s domestic? All of these questions will assist you in determining whether or not you should consider the local market. Remember, a mainland company registration in Dubai facilities unrestricted access to Dubai’s local market.

3. A Wide Range of Business Possibilities

Another important reason to choose a mainland business setup in Dubai is the list of authorized business activities in the region. You can pick and choose from the official list, and if extra approvals are required, you can get them too.

Free Zone Company Registration in Dubai

A free trading zone is governed by a separate jurisdiction with its own set of rules and regulations. Furthermore, it varies from one free zone to the next, and you have the option of choosing any of the UAE’s 40+ free zones.

In addition, numerous specialized free zones, such as the DIFC (Dubai International Financial Center) for financial enterprises and DMC (Dubai Media City) for media and mass communication cater to niche industries.

 A free zone business framework is cost-effective and provides a healthy working atmosphere where multiple enterprises can flourish together. Therefore, if you choose the right free zone, your company will grow quickly.

Free Zone Business Setup – Is It For You?

Examine the following elements of the Dubai free zone business setup. Once done, determine whether it’s appropriate for your company based on your business model:

1. Low Entry Barrier

When choosing a free zone company setting in Dubai, small firms and startups don’t have to worry about large upfront costs. When compared to the Dubai mainland, the startup cost, as well as the entire business setup cost in free zones, are slightly lower.

2. Specialized Infrastructure

The free trading zones provide pre-built offices, warehouses, and other facilities that are tailored to your company’s needs. Multi-tiered data centers, robust IT infrastructure, and easy access to all transit options are all included.

Benefits of Setting Up your Business in the Mainland Region

Be it an Indian business aspirant or a local investor, a Dubai Mainland company registration in Dubai allows everyone to own 100% of their business. In addition, the expats require the services of a local service agent for company formation. They assist with paperwork and company registration but will play no legal role in the organization.

  1. You enjoy complete exemption from corporate taxes with a mainland company. Furthermore, there’s no necessity for a minimum amount of capital. All you need to do is pay a statutory VAT of 5%, which is among the lowest in the world.
  1. By forming a mainland firm, you can enter the lucrative government sector. Each year, the UAE government releases various government consignments, and you can take advantage of this opportunity via your mainland establishment.
  1. Foreign enterprises on the mainland don’t have to bother about currency restrictions in the UAE because they do not apply to them. Furthermore, having a mainland business in Dubai streamlines the visa application process. In addition, you can easily apply for several visas to ensure the safe stay of your family in the Emirates.
  1. You gain access to Dubai’s world-famous local market with a mainland company. Moreover, this also empowers you to start the business of your dreams. Why? Because businesses in a variety of areas experience tremendous growth in the mainland.

Benefits of Setting Up your Business in a Free Zone

  1. Be it an Indian business aspirant or a local investor, a free zone company registration in Dubai allows everyone to own 100% of their business. In addition, the expats require the services of a local service agent for company formation in the free zones. They assist with paperwork and company registration but will play no legal role in the organization.
  1. Your sensitive information is never revealed to the general public because free zones have their own jurisdiction and cater to specific economic industries. These separate laws also offer additional corporate support in terms of resources, labor, and so on.
  1. In a free zone company formation in Dubai, you can repatriate 100 percent of your profits. You also obtain a total exemption from personal income tax and taxation on capital gains. Moreover, there’s negligible taxation on import and export duties as well.

Start your Company in the UAE!

The location of your business is crucial in determining your company’s performance in the UAE. If you don’t choose the appropriate one from the start, you’ll be burdened with bearing overhead costs for relocation, etc.

Therefore, it’s better to collaborate with Shuraa, and our legal experts will handle everything for you. We cover all the aspects of company formation including licensing, paperwork, banking, etc.

Summarizing the Differences between a Mainland and a Free Zone Company

Attribute Mainland Free Zone
Business Ownership The 100% Expat ownership in business setup in the mainland. Each free zone has an independent jurisdiction that facilitates 100% business ownership.
Scope of Business You can launch your company in diversified business fields and make the most of the opportunities available in the mainland.  Many of the free zones cater to specific industries. Therefore, diversification and scope of business is marginally low compared to the mainland.
Office Space In Mainland companies no need to invest in a physical office . There’s no need to invest in a physical office in case of a free zone company establishment.
Visa Eligibility You can apply for the desired number of visas by acquiring more workspace for your business. There aren’t any hidden restrictions with regards to visa procurement. You don’t need to worry about visas if the maximum expected permits are around 6. Once this benchmark is crossed, the visa application can become subject to certain restrictions.
Number of Partners You can have max. 49 partners for your mainland firm in Dubai. There’s a limited number of partners you can have for your free zone company.
Taxation Laws You don’t need to pay any personal or professional taxes. All you’re liable to pay is VAT (5%). Free zones offer complete exemption from taxes.
Bank Account The process for opening a corporate bank account for your venture in the mainland is hassle-free. You can also leverage your virtual space to open a bank account. Opening a bank account for your venture in a free zone authority requires complex documentation. However, you don’t need to worry about it when you collaborate with Shuraa Business Setup company formation experts.