Are you planning to Company formation in Dubai, but not able to decide the region- mainland or free zone? Wherever you choose to initiate a business, it would provide you with many benefits. But there are other various factors to check before you decide which zone is more beneficial for your business activity.
Our Business setup consultants in Dubai solutions suggest the best decision based on the business objectives, eligibility of visa, business ownership, and so on. Let’s move on to the detailed analysis as we help you with the right choice of region to start your business.
A free zone allows the organization to perform business activities within a particular free zone. The company cannot offer their services to any of the mainlands in the UAE.
Free zone companies are not allowed to market outside the free zone even if it is provided with a business card or personal marketing.
Mainland companies are allowed to perform the activities in any free zones, even outside the UAE. All the professional and commercial licenses come under this category.
In a free zone company, an expatriate licensee can own 100% ownership. They don’t demand any local service agent or local sponsorship for free zone companies.
But for a mainland company, a local service agent or local sponsor is mandatory if the company is owned by the expatriate. In a commercial license, 51% of company shares will be held by the UAE national and 49% will be given to the expatriates. For professional license, complete ownership is given to the expatriates along with a Local Service Agent from the UAE itself.
A free zone company can be performed with or without an office. A license to operate a company in a free zone allows the licensee to use a Flexi desk office. But there will be some restrictions on the eligibility to hold a visa.
But for the mainland company, the minimum office space requirement is 140 sqm. The license will be issued only after the successful presentation of Ejari or Tawtheeq.
Eligibility of Visa
For the company operating in the free zone, there are a limited number of visas that normally ranges from 1-6 visa packages. But for the companies operating in the mainland, there are no restrictions to get visas.
An electronic quota for every firm will be issued by the Ministry of labour. This can be increased by adding more office space and your firm will be eligible for 1 visa.
If your organization has field workers who are working outside like salespersons, drivers or PROs, a separate quota can be applied. This will not affect the quota for office space.
But if you need many visas, physical space must be added for the free zone companies. This will be quite expensive because of the huge demand for commercial spaces.
Approval from the governing bodies
Freezone companies are mainly for goods exporting and importing. So these companies do not require any approvals from external authorities. Whereas for the companies performing in the mainland zone, a standard approval is a must to obtain a mainland license. The license issuing bodies are Dubai Municipality, Department of Economic Development, Ministry of Immigration etc.
So, have you planned which zone to perform the business? Mainland or free zone? In a nutshell, we would like to inform you that if your business activities have to be performed outside UAE, then a Free Zone business setup in UAE is the best choice for you. But if your business activities are to be done globally including UAE, then the perfect option is the mainland.