Investors and businessmen are always curious where to invest to get the maximum gains and it is very important as well. UAE is among the topmost investor-friendly destination in the world that offer innumerable options to its investors and opportunities to people with various preferences. If you are keen on setting up a business in UAE then it is very essential to know about laws, rules and regulations and business jurisdictions etc. UAE offers different business options to the investors among them free zone and the mainland are most important. Each of them has its advantages and disadvantages and is designed to engage different type of investors. So, let’s first understand the difference between the two.
Free Zone:-If you want 100% ownership of your business and controls of your business then Free Zone should be your first preference. A free zone company comes under a particular Emirate and can not conduct its operations in non-free zones without the support of a local agent. As of now, 40 free zones operating in the UAE and have a government regulatory body called the Free Zone Authority.
Some advantages of setting up business in free zones include: –
- The companies can enjoy 100% ownership, tax-free status, no customs duty, no export-import
- The shareholders, directors and employees of a free zone are eligible for a UAE residence visa
- The companies in the free zone can do business within the jurisdiction of the free zone and outside the UAE
- The company formation is possible with or without office premises and thus virtual offices are allowed
- To establish a company in a free zone certain amount of capital is required which depends on the emirates it belongs to
Mainland: -Mainland in UAE is also known as the onshore company which is registered under the government authority of the concerned Emirate. The trade license is issued by the Department of Economic Development (DED) and is responsible for registering, licensing, consumer protection etc. of the company in Dubai. The company can conduct business in the local market as well as outside the UAE without any restrictions.
Some advantages of setting up business in free zones include: –
- The companies in Mainland get exemption from corporate tax
- There is no capital requirement for setting up a company in Mainland
- The companies in Mainland can conduct business with other mainland companies in Dubai or UAE and have the freedom to do their business in any part of UAE
- There are no constraints on the number of visas on mainland license
- There is no currency restriction involved
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