When it comes to starting a business in UAE, one of the most common questions people have is what the difference between a Mainland company and a Freezone company is. In this article, we will break down the critical distinctions between these two types of setups so you can make an informed decision about which one is right for you. Remember that there are many different factors to consider when making this decision, so be sure to consult with an expert before moving forward.
What is a mainland company setup?
A mainland company is a business registered with the Department of Economic Development (DED) in one of the seven Emirates. The DED is responsible for issuing licenses and regulating businesses on the mainland. One of the key benefits of setting up a mainland company is that you will have access to the local market, which means you can sell your products and services to consumers in the UAE. Mainland companies are also allowed to own property, which can be helpful if you plan on opening a brick-and-mortar store or office.
Advantages of mainland company setup:
- You can sell your products and services to consumers in the UAE.
- You are allowed to own property.
- You have more control over your business operations.
What is a Freezone company setup?
A Freezone company is a business that is registered with one of the many free trade zones in the UAE. These zones are designed to attract foreign investment and promote economic growth. Freezones offer a number of benefits to businesses, including 100% ownership, tax exemptions, and relaxed visa requirements. One of the key drawbacks of setting up a Freezone company is that you will not be able to sell your products or services to consumers in the UAE. This is because free trade zones are designed for export-oriented businesses.
Advantages of Freezone company setup:
- 100% ownership
- Tax exemptions
- Relaxed visa requirements
- Disadvantages of Freezone company setup:
- You will not be able to sell your products or services to consumers in the UAE.
Difference Between Mainland Business Setup from Freezone Business Setup
There are several key differences between Mainland and Freezone company setups, which are summarized in the table below. When making the decision about which type of setup is right for your business, be sure to consider all of these factors carefully.
Company Formation Process
Mainland: You will need to register your business with the Department of Economic Development (DED).
Freezone: You will need to register your business with the Freezone Authority.
Business Activity
Mainland: You can conduct any type of business activity on the mainland.
Freezone: Your business activity will be restricted to the type of activity approved by the Freezone Authority.
Shareholders
Mainland: You can have up to 50 shareholders.
Freezone: You can have up to five shareholders.
Business Location
Mainland: You can operate your business from anywhere in the UAE.
Freezone: You must operate your business from the designated free trade zone.
Work Premises
Mainland: You can own or lease your work premises.
Freezone: You will need to lease your work premises from the Freezone Authority.
Banking
Mainland: You can open a bank account with any UAE bank.
Freezone: You must open a bank account with the designated free trade zone.
Now that you know the key differences between these two types of business setups, you can start to weigh your options and decide which one is right for you. Keep in mind that there are pros and cons to each option, so be sure to do your research before making a final decision. If you have any questions, feel free to reach out to an expert for guidance.
How can Limitless Business help?
At Limitless Business, we are experts in company formation and business setup in UAE. We can help you navigate the process of setting up a mainland or Freezone company so you can focus on growing your business. Contact us today to learn more about our services and how we can help you get started.