Differences between Dubai Mainland and Dubai Free Zone Business Set Up

Planing to Setup Business in Dubai ?

Differences between Dubai Mainland and Dubai Free Zone Business Set Up: It can get quite confusing to not know where to start you business in Dubai, whether on the mainland or in the free zone and what are the differences?

Dubai Mainland companies are licensed and incorporated by the Department of Economic Development (DED) and can do business locally and internationally without any restrictions. Whereas, business companies in the Dubai Free Zone are limited to functioning only in that zone of the respective emirate and cannot expand into the mainland. Upon comparison of the criterion that suits you well, you can make the decision of where to set up your business in Dubai.

The Scope of Business

Mainland Company: There are no restrictions. It can do business in the local market, free zone or go international.

Free Zone Company: The FZ companies can only do business withing the free zone of the emirate or outside of UAE, on international grounds.

Ownership

Mainland Company: A local sponsor is needed to incorporate the business, and the expat partner can only hold 49% of the shares and 51% goes to the UAE local body.

Free Zone Company: Can be hundred percent owned by the expet partner and doesn’t need a local body for representation.

Office Space Restrictons

Mainland Company: Business owners need to lease at least 200 square feet of space annually and submit an annual tenancy contract.

Free Zone Company: No restriction on having an office space. Businesses can be incorporated without office space and can use the communal business centres for up to five hours a week to save initial setup costs.

Visa Facility

Mainland Company: There are no restrictions on getting visas. An Electronic quota is established for the business, through which more visas can be obtained if the need for staff is more.

Free Zone Company: Upon getting the smart office package, 2 visas can be obtained. But depending on the free zone, 3-6 visas can also be obtained.

Capital Requirement

Mainland Company: It varies depending on the form of the legal business entity.
Free Zone Company: It varies depending on the emirate in is located in.

Auditing

Mainland Company: All businesses in the mainland need to audit every year.

Free Zone Company: There are exceptions in the free zone. Not all have to audit except the FZ Co and FZE.

Government Approvals

Mainland Company: For every license that business in the mainland gets, an approval is needed from the respective authority – (Department of Economic Development), DM(Dubai Municipality), Ministry of Labor (MOL), Department for Naturalization and Residency affairs of Ministry of interiors or Immigration (MOI).

Free Zone Company: Do not require approvals from authorities outside of the free zone, there is an internal governing body.

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Originally posted 2021-09-29 04:24:42.