difference between a free zone and the mainland

What’s the difference between a free zone and the mainland?

Dubai’s business environment appeals to a wide range of prospective investors from around the world. It is critical to locate a business in a welcoming place to investors. In the United Arab Emirates, there are a variety of business prospects for those with a wide range of interests. The United Arab Emirates (UAE) has a variety of commercial alternatives for investors, including mainland and free zones. It’s up to you to decide between Company formation in Meydan Free Zone and the mainland.

Investment opportunities abound in each, tailored to attract a specific group or category of investors. What you want to do and the type of business you want to determine the best location for your business: mainland or Company formation in Meydan Free Zone. There are two options for setting up a company: if you’re going to conduct business in the UAE, you should go with the mainland option, and if you want to have full ownership and control over your business, you should go with the free zone option.

Now, let’s look at some of the direct contrasts between the UAE’s free zones and the rest of the country.

The Mainland Company:

Mainland Firm is an inland company that can operate in both the United Arab Emirates and the rest of the world. Commercial and professional permits allow mainland businesses to use freely. Mainland Company incorporation in Dubai requires a local sponsor or a UAE national, and the standard shareholding arrangement of a Dubai Mainland Firm is that the UAE national Sponsor holds 51% of the company and the Foreign Shareholder (s) has 49% of the company’s shares. Local sponsors are paid an annual fee or a percentage of sales/profits by the mainland company, enabling flexible legal contracts for overseas investors. The company is entirely under the control of the foreign investor, and the local partner has no role whatsoever in the company’s day-to-day operations. DED is responsible for registering, licencing, commercial compliance, and consumer protection of the company in Dubai for mainland businesses. 

Benefits of Starting a Business on the Mainland in Dubai

The following are some of the many advantages of establishing a business in Dubai on the mainland:

  • In Dubai, a Mainland Company is exempt from corporate tax.
  • When setting up a Mainland Company, there is no minimum capital requirement.
  • Enterprises from the mainland can do business in Dubai or the UAE with other mainland companies and can operate anywhere in the UAE or beyond. As a result of these features, they have an advantage over enterprises operating in free zones, which are constrained to conducting business solely within the free zone in question.
  • On the mainland, businesses have a wide range of options for conducting their day-to-day operations. As far as mainland business is concerned, there is simply no limit.
  • They can serve a wide range of customers in the United Arab Emirates.
  • Businesses from the United States and the United Kingdom can choose from any part of Dubai to shop. Aside from conducting business in the UAE, this trait enables them to develop various branches of the organisation, providing for a strong presence in this country.
  • In contrast to free zone companies, which can only carry out private commercial assignments, mainland companies can carry out government contracts.
  • The number of visas issued on a mainland licence is unrestricted. However, obtaining a visa for a company on the mainland will depend solely on the office space that has been purchased.
  • There are no restrictions on using foreign money when conducting business on Dubai’s mainland.
  • Capital and earnings can be returned in their whole.
  • The registration process is simple for mainland companies and does not require an annual audit.