If you don’t choose the right zone, you and your business can suffer. Selecting the proper company setup in Dubai is critical for your survival and growth. You might have heard that you can setup your company in a Mainland or a Free Zone. But what does that even mean, or how do you choose which one is right for you?
In this post, we will walk you through the differences between mainland and free zone company setups. After reading this, you will have more clarity on the Dubai business setup. If you need more assistance, we are here to help you. Whether it’s the company formation process or the Dubai visa cost, we can assist you with managing it all.
Let’s start by understanding what mainland and free zone business mean in Dubai, UAE.
What Is A Free Zone Company In Dubai?
A free zone is a designated economic zone for foreign businesses to operate. These economic zones let them settle in Dubai and trade in the global market and within the free zone.
In Dubai, there are more than 20 free zones for specialized sectors such as healthcare, finance, media, and more. Each Free Zone is governed by its separate Free Zone Authority (FZA). You can open a physical office in a free zone, or operate virtually as per your needs.
Benefits of free zone company setup in Dubai:
- 100% foreign ownership rights for the business owners/entrepreneurs
- Simplified and easy registration process for quick Dubai business setup
- Tax benefits such as 0% corporate tax on a specific income range
- Lower or nil customs duties on imports and exports
- No need to create a physical office for business
Therefore, free zones are ideal for traders, consultants, e-commerce companies, freelancers, and other remote businesses with international clients. If you want to access the Mainland, you will need a special licence and permits. Contact us to know more.
What Is A Mainland Company In Dubai?
Mainland companies operate in the UAE’s main markets. Dubai Department of Economy & Tourism (DET) manages the registration and licensing of the mainland companies.
Mainland company formation allows businesses to work with companies in all the emirates and with international companies as well. Additionally, these companies can bid for the government projects as well. A physical office is necessary for the company setup in the Mainland of Dubai.
Benefits of mainland company setup in Dubai:
- Trade freely in any market in the UAE
- Opportunity to bid for government contracts
- 100% business ownership with few exceptions
- Expand your business within and outside of the UAE
- Set up an office to strengthen your business visibility
Mainland company formation is ideal for those who want to target local customers in Dubai and the UAE.
Difference Between A Company In A Free Zone Vs Mainland In Dubai
| Services | Free Zone Dubai Business Setup | Mainland Dubai Business Setup |
| Business Ownership | 100% business ownership without any local partners. | 100% business ownership in most businesses except for strategic, specialized, or security sectors. |
| Market Access | Can trade with international clients or businesses located within the free zone. | Can trade with any company in the Emirates and can bid for government contracts. |
| Tax Structure | Can claim “Qualifying Free Zone Person” (QFZP) status for 0% corporate tax on qualified income. | Subject to all the taxes under the federal laws of Dubai, UAE. |
| Office Requirement | Not mandatory to have a physical office. Companies can use flexi-office space. | It is mandatory to have a physical office to register your company on the Dubai mainland officially. |
| Visa Quota | Linked to the office space. Therefore, flexi-desk companies might have lower visa quotas. | The number of visas per mainland company setup depends on the size of the physical office. |
| Time Required For Setup | Quick setup due to fewer registration requirements. | Time-consuming due to legal requirements and the physical office setup. |
| Cost Of Business Setup | Lower due to a few formal registration fees and availability of digital workspaces. | Higher due to registration and the need for a physical office. |
| Business Goals | Ideal for remote businesses that want to work with international clients or companies within the free zone. | Ideal for businesses that want to target locals in the UAE and beyond. |
Why Choose 365 Day PRO Services For Company Setup In Dubai?
365 Day PRO Services has expertise in company setup in Dubai. For more than 15 years, we have helped businesses realize their vision of operating in Dubai. Whether you want to setup a company in the Mainland or the free zone, we can help you with:
- Immigration services
- Licence Amendment
- Embassy services
- Passport & Visa services
- VAT & Corporate tax assistance
- Attestation services
- Dubai municipality services
- RTA
If you are ready to expand your business in Dubai, we are here to assist you in every step. Let’s discuss more on a call.
Conclusion
Company setup in Dubai is a complex process. You need to choose whether you want to operate in the free zone or the Mainland. The free zone gives you 100%% ownership and remote working access, but limits your access to the UAE local market. Mainland company formation enables you to access all emirates and conduct global business, with a mandatory physical office. We have listed the differences between the free zone and mainland Dubai business setup. 365 Day PRO Services can help you setup your business efficiently. Contact us to know more.
FAQs
Can a free zone company do business in the Mainland?
Free zone companies can operate in the Mainland after receiving special permits or licenses from the Free Zone Authority and other relevant authorities. They might need to work with a local partner in the Mainland. Contact the 365 Day PRO Service to know more.
How to choose between Mainland and free zone for your business?
Your choice depends on the business activities you plan to conduct and the customers you are targeting. If you work remotely with international clients outside the UAE, you can opt for a free zone. However, if you want to target the UAE locals and government contracts, you need to open an office in the Mainland. Other factors, such as cost and tax structure, also affect your decision.
Do I need a local sponsor or partner for a Mainland company in Dubai?
In recent years, the UAE government has enabled 100% foreign ownership for mainland companies in Dubai. However, a few strategic and specialized sectors require local partnerships for mainland company formation by foreign owners. Contact us to know if you’ll need a local partner to expand in Dubai, UAE.
Is physical presence necessary for mainland business in Dubai?
Yes, mainland businesses need to open a physical office to operate in Dubai. 365 Day PRO Services is here to help you with mainland company formation. Let’s connect on a call to discuss more.