Should you choose Dubai mainland or Free Zone for your business?
The business setup in Dubai free zones or on the mainland can help you earn great benefits. However, when deciding, you should weigh what is best for your business intentions in the UAE.
In this article, you will be able to learn about the characteristics of businesses in free zones or on the mainland. Let us see:
- Mainland company and free zone company in Dubai
- Characteristics you must consider for open a company in Dubai free zone and company setup in Dubai mainland
- Learn more about establishing companies in free zones or on the mainland
1. Mainland company and free zone company in Dubai
Businesses in mainland Dubai are located somewhere within the country. Likewise, they are authorized and controlled by the Department of Economic Development (DED). In the same way, to form these companies, the interested party must comply with the approval process to receive the license from the corresponding authorities.
On the other hand, the Dubai free zone companies are located in different parts of the country. Likewise, these businesses are authorized by the free zone authorities and subject to compliance with their rules. If you want to do a business setup in Dubai free zones, you should consider that you can only do it within the chosen zone.
Furthermore, you will only be able to work with companies and clients outside the Emirates. Also, from these free zones, it is very difficult and otherwise expensive to do business with the continental UAE.
2. Characteristics you must consider for open a company in Dubai free zone and company setup in Dubai mainland
The characteristics to open a company in a free zone in Dubai and to do a mainland Dubai company formation are the following:
2.1 Business setup in Dubai free zones
The so-called free zones are those where it is possible to do business with goods and services. Commonly, these areas work with the so-called preferential customs and tax rates. Also, in Dubai, there are 30 free zones that can give you benefits such as 100% foreign ownership.
2.1.1 You will receive 100% ownership of your business
By doing a business setup in Dubai free zones, you will have 100% business ownership. Furthermore, to do so you will not need a sponsor or service agent within the UAE.
2.1.2 Commercial activity
By obtaining a Freezone license in Dubai you will not be able to trade on the mainland. Also, to do business with the Emirates, you will need to find a local sponsor to set up a company on the mainland.
2.1.3 Office spaces
In each free zone, you will find a wide variety of office spaces, from virtual to flexible desks.
The number of visas issued in free zones varies from one place to another and will depend on the office space available. However, in these free zones, it is possible to obtain from 3 to 6 visas. Below is the number of visas at DMCC you can get, based on the office space you own:
- 3 Flexible Writer Visas.
- From 4 to 5 visas for offices with services and depending on the size of the same.
- 1 visa for every 97 square feet of physical space.
2.1.5 Costs of setting up and operating your business
This cost varies from one zone to another and the four main fees for a business setup in Dubai free zones are the following:
- Business Registration Fees.
- The rights for the freezone license in Dubai.
- Office fees.
- Share capital.
2.2 Dubai mainland company setup
Mainland companies or mainland companies can trade locally and also outside the Emirates. Likewise, for mainland Dubai company formation, you must apply for a license to the DED (Department of Economic Development) in that emirate.
2.1.1 Company ownership structure
Currently, in the Emirates, they established a law that allows the owner of a company 100% foreign ownership for mainland companies. In that sense, in previous years they only received 49% of the shares of the company and 51% for the sponsor.
2.1.2 Commercial activity
Mainland companies are free to do business anywhere in the United Arab Emirates. Also, they can legally trade in all free zones in the UAE.
2.1.3 Requirements for office space.
In contrast to companies in free zones, those on the mainland require office space. Additionally, the minimum requirement is 200 square feet of office space. Likewise, a continent company cannot have a virtual office.
For mainland companies, there are no established limits. However, the number of residence visas issued depends on the office space or commercial facilities available to the company. This way, the more space your office has, the more residence visas you can get (generally 1 visa for every 80 square feet).
2.1.5 Installation price
The costs for the installation and establishment of a mainland company consist of the following:
- The business or service license is 5% of the rent, although the DED issues several types of licenses. Likewise, the instant, or commercial license is not applicable.
- Approval by the DED at the time of initiation.
- Procedures at the Dubai Chamber of Commerce.
- Approval of the name of the company.
- Office rental.
- MoA (Memorandum of Association) Certification.
- Drafting of the contract and legal agreements.
- Registration at the Ministry of Economy.
- Business license fee.
- Sponsorship fees in the Emirates.
3. Learn more about establishing companies in free zones or on the mainland
Deciding to do the business setup in Dubai free zones or on the mainland depends on knowing where you will have the best benefits. Therefore, we can advise you on your choice and the establishment, you just have to call us at +971 43 316 688. You can also contact us at email@example.com.
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