Difference Between Mainland and Free Zone Company

March 05, 2019

Dubai is one of the fastest growing economies in the business world with special state of art facilities both for domestic and international investors. Every day, there are more and more entrepreneurs who are interested to invest in the Dubai business market as part of their global operation. Dubai has become an essential part of business operations around the world, leading with many innovative ideas for business setup. Dubai has a strong economy and is free from any political interference from the government. Even the government of Dubai offers friendly business regulations for international investors. The government of the UAE has provided plenty of opportunities for economic growth and strong administrative foundations. In order to start a new business set up in Dubai, the two main categories are Mainland and Free Zone Authority. If you are planning on starting a business set up in Dubai then its important that you understand the difference between Dubai Mainland and Free Zone Authority.

Mainland Company

A mainland company is licensed by the Department of Economic Development (DED) from the related emirate where you have to start up your business. DED is a government agency responsible for many business activities in a region. Commonly DED is responsible for license approval, cancellation and Up-gradation. Also, DED provides a prime location where foreign business owners can work.

A Mainland company trade license cost depends on the following factors:

  • Approval from DED
  • MOA and Notarization
  • Office Rent/Setup
  • Trade Name Registration
  • Immigration and labor card Fee

Advantages of having a business operation in Dubai Mainland

  • No limitation for Employment visas
  • East recruitment process
  • No yearly Auditing
  • No restrictions in legal documents
  • Low Import duty
  • Prime location for business setup
  • No corporate or personal tax

Free Zone Company

A Free Zone company is also licensed by government officials. It is incorporated within a designated authority of the emirate where you can run your business operation. In a free zone, companies can deal in trade and export only. A company can also open an extension branch of their business in the free zone. Free Zone Authority provides a prime location for business owners. Apart from this location, you cannot operate your business in any other region of the country. Apart from this, a free zone in Dubai provides many investment opportunities for foreign investors.

A free zone company trade license cost depends on the following factors:

  • Trade License Package
  • Electronic Channel Fee
  • Trade Name Registration
  • Establishment Card

Advantages of having a business in Dubai Free Zone

  • Complete exemption on corporate or personal tax
  • Complete repatriation of profits
  • complete ownership for investors
  • No capital deposit required
  • Low import and export duties

Although there are many similarities between Dubai Mainland and Free Zone Company. Here are some similarities that they both have in common.

Similarities between Mainland and Free Zone Company

  • 100% import and export tax exemption
  • 100% repatriation of profits and capital
  • 100% personal income tax exemption
  • 100% of foreign company ownership
  • 100% income and corporate income tax exemption

“Under no circumstances, can a free zone company in Dubai operate outside its jurisdiction unless it has a branch licensed by DED. The same applies to companies in any free zone in the UAE. Alternatively, such companies may appoint an intermediary to sell their products or services in Dubai, but the intermediary should have a DED license,” said Mohammed Shael Al Saadi, Chief Executive Officer of Business Registration & Licensing (BRL) Sector, DED”.

Comparison details between Dubai Mainland and Free Zone Company are:

Mainland Company Freezone Company
100% ownership 100% ownership
Approvals are required from government authorities Only one approval required for Free zone authority
You can do business in the whole UAE You can only do business within the free zone area
You can open an Office space No physical office space required
Financial Statement not required Financial Statement required
No Hidden Cost Hidden cost for some nature of the business
You can change your business license You cannot change your business license
Wider range for Business operations Only one business operation
No limitation for Visas Only 2 visa packages for free zone license
Can add partners and shareholders Once selected, you can’t add more business partners or shareholders
No requirement for deposit capital in the bank On-site customers inspection
Freeze trade license No option available for freezing trade license

Mainland or FreeZone companies, which once are best?

This completely depends on the nature of your business. In some business with higher capital values, Mainland company should be the first. For smaller companies that just want to do trading, a free zone company is the best choice. The best way to choose among these is to hire professional help. Right advice from any business consultant with will always help to serve the business needs in the long term. If you are setting up a business that requires long term services then you need a service agent to run your business operation locally. You are allowed to hold 100% of your business expenditures and a service agent will only be paid for the services he offered.

Setting up a company in the Dubai Mainland can often seem to be a lengthy and expensive process. Setup Dubai business can ease all the perplexing process. We start off by thoroughly investigating all your needs and demands in a certain region. We also provide reliable PRO services for approvals of important documents. Our team has provided many credible services to small, medium and large enterprises. We have a compelling experience for the business set up in Dubai mainland and free zones. We are registered agents and provide professional services at an affordable price.

Setup Dubai Business can help you set up an operation in Dubai as:

  • Limited Liability Company
  • Local Service agent
  • DED services
  • Commercial Agent
  • Pro Services

If you have any other query regarding our DED services, feel free to contact us and get a free quote from one of our representatives.

Send us a quick enquiry
Drop in your details and we will call you back

Get a Quote