When it comes to setting up a business in the United Arab Emirates (UAE), a critical decision to make is whether to establish your venture in the mainland or within one of the many free zones. Both options offer distinct advantages and come with their unique set of regulations and requirements. In this guide, we’ll compare mainland license Dubai and free zone business setups in the UAE, helping you make an informed decision that aligns with your business goals and objectives.
Mainland business setup:
Local sponsorship:
One of the key features of mainland business setup is the requirement for a local sponsor, often a UAE national. The local sponsor typically owns 51% of the business, while the foreign investor holds the remaining 49%. This arrangement is mandatory for most business activities in the mainland.
Accessibility to UAE market:
Operating in the mainland allows your business to tap into the vast UAE market directly. You can trade with UAE-based companies and have the freedom to set up your business anywhere within the emirate.
Flexibility in business activities:
Mainland businesses enjoy a broader scope of permitted activities, making it an ideal choice for those with diverse business interests. It provides the flexibility to engage in various sectors and industries.
Potential for local government contracts:
Mainland businesses can bid for government contracts, a lucrative opportunity for many companies. This access to government projects is a unique advantage compared to free zones.
Free zone business setup:
100% foreign ownership:
One of the primary attractions of free zones is the ability to have 100% foreign ownership of your business. This offers full control and decision-making power to foreign investors.
Tax benefits:
Free zones typically offer a tax-free environment, with no import or export duties. This can result in significant cost savings for businesses operating within a free zone.
Simplified setup process:
Free zone setups are known for their streamlined and efficient processes. They offer quick registration, minimal paperwork, and hassle-free administrative procedures.
Exemption from import/export duties:
Companies in free zones can import and export goods without paying customs duties. This is particularly beneficial for businesses engaged in international trade.
