Dubai Mainland vs. Free Zone: Which is the Best Choice for Your Company?

• Home
• /
• Knowledge Base
• /
• Business Registrations
• /
• Company Incorporation Dubai
• /
• Dubai Mainland vs. Free Zone: Which is the Best Choice for Your Company?

Dubai Mainland vs. Free Zone: Which is the Best Choice for Your Company?

When it comes to opening a company in Dubai, most of the entrepreneurs get confused that where to establish a company in a Free zone or a Mainland. Some businesses found Free zone company formation better than the Mainland and others found mainland companies better than Free zone companies.

So, to remove the confusion, below we mentioned the differences between Dubai Mainland vs. Free Zone. It doesn’t matter where the company is located, entrepreneurs can open a bank account anywhere is Dubai.

What Are Dubai Free zone Companies?

The Dubai Free zone company is a separate legal entity, that works completely on its own rules and regulations. Companies are allowed to do business only in the Free zone areas or outside the country.

The ownership rules have been changed by the authority about foreign investment. Now foreign investors can have 100% ownership of the business, with no need to have an Emirati sponsor. In Dubai, there are 40+ Free zones, a business can set up three types of companies in Free zone:

1. Free Zone Company
2. Free Zone Establishment
3. Branch of a business concern

Free zone companies also have the benefits of tax exemption, easy company registration in Dubai, and access to regional and global markets.

What Are Dubai Mainland Companies?

As per the United Arab Emirates, mainland companies can operate in the local market as well as outside of the country. To register a business in the mainland of Dubai, an in-country Emirati national must be a sponsor. 

The mainland business setup Dubai is still working on the old principal ownership structure, 51% of the business will be held by an Emirati sponsor and 49% by Foreign Shareholders. These companies provide a bespoke legal arrangement to international and national investors. The local sponsors get some percentage of the sales annually.

The mainland companies of Dubai are in charge of the Dubai Department of Economic Development (DED). Its aim is to make commercial regulations and protect the rights of consumers.

Difference Between Dubai Mainland vs. Free Zone

Other Practical Differences Between Mainland and Free zone Companies

Important Points Regarding Mainland and Free zone Companies

• If an owner of a Mainland company wants to convert the Mainland company into Freezone, then is not allowed under any circumstances. Here the possible solution is to shut down the main company and start a free zone company. To get the benefits of both company registration in Dubai, some owners set up a company in both.
• There is no customs duty if goods are imported by companies in Free zones, but Mainland companies have to pay the customs duty on the import of goods.
• In UAE, there are 40+ Free zones, so it is recommendable to choose a Free zone as per the category and nature of the business. License and Freezone company formation fees differ from Free zone to Freezone.

Conclusion

To do a Freezone company formation or a Mainland business setup in Dubai, both required several steps to complete. We at Registrationwala, help entrepreneurs to set up the company smoothly in the country. Our experts will help you in:

• registering your business
• understanding free zone license cost
• complete documentation

Reach out to us to know more about free zone company and mainland company formation in Dubai.

• 812 views

Blog Search