UAE Business Setup Explained | Mainland vs Free Zone Registration
It’s a good idea to start a business in the UAE. Thousands of entrepreneurs from around the world choose the UAE as the location for their ventures each year.
But one crucial question always arises—where is the best place to register a company in the UAE? Do you opt for a free zone setup or the mainland? In this guide, we will break it down into easy steps to guide you on the right path.
Company Registration in UAE Mainland: What is it?
A UAE mainland company setup is where you directly register your business with the Department of Economic Development (DED). You are free to operate anywhere within the UAE and even outside.
Businesses here can deal with the government as well as private customers. It is fantastic for individuals who are interested in establishing a shop, restaurant, or service business in the UAE cities. Moreover, the company incorporation UAE is assisted by numerous business setup consultants in Dubai, so it becomes an easier process than it would be.
Company Registration in UAE Free Zone: What is it?
Free zone company registration in Dubai provides you with 100% ownership from day one. Free zones are special economic zones with tax advantages and business-friendly regulations.
Free zones are perfect if you are looking to conduct international trade, have an online business, or provide services from outside of the UAE. If cost, speed, and flexibility are your top priorities, this may be the best place to register company in UAE.
Mainland Vs Free Zone: What’s the Difference?
Selecting between a UAE mainland and a free zone establishment relies on what you want.
1. Ownership
To begin with, mainland businesses now permit 100% foreign ownership for the majority of activities. Before, there were local sponsors who were needed. In contrast, free zones have had full ownership all along. Thus, this is a great advantage for the majority of investors.
2. Scope
Secondly, mainland businesses can conduct business freely within the UAE as well as internationally. Free zone businesses, however, require a local agent or branch to carry out business within the UAE.
3. Office
Third, a mainland setup needs to lease an actual office location. But free zones offer virtual, flexi-desk, or shared working alternatives.
4. Cost
Secondly, free zones are usually cheaper for small businesses. However, mainland establishments have more phases and prerequisites, making them more costly overall.
5. Tax
Then, mainland and free zone companies adhere to UAE VAT regulations. Mainland companies, however, have to pay 9% corporate tax if profits are more than AED 375,000. Some free zones provide tax exemptions.
Free Zone vs Mainland: Where to Register Your Company in UAE?
Suppose you are planning to establish a cafe, retail outlet, or an office that deals directly with customers in the UAE. Then, the mainland location is the best place to register company in UAE. But if your business is online, offers digital services, or exports to foreign clients, then the free zone is a better choice.
Most of the business setup consultants in Dubai would advise starting with a free zone.
Benefits of a Mainland Company
Here are the benefits of a Mainland company:
1. Operate Across the UAE
Firstly, mainland businesses can operate across the UAE and overseas. No restrictions on location make it perfect for retail, services, or logistics companies.
2. Bid for Government Projects
Second, mainland companies can bid for government contracts in the UAE. It offers possibilities for large, long-term projects with stable revenues and reputation-building opportunities.
3. No Visa Restrictions
Furthermore, there is no fixed limitation on the number of employee visas you can apply for. You can add people to your team as your business expands in the future.
4. Flexible Office Options
Secondly, you are also free to choose the location of your office within the emirate. From high-rise building office space to commercial outlets, a mainland setup allows more flexibility when it comes to space.
5. Stronger Market Credibility
Lastly, mainland businesses are viewed as more trustworthy by local consumers and banks. It can result in stronger relationships, faster opening of business accounts, and faster establishment of client trust.
Benefits of a Free Zone Company
Here are the benefits of the Freezone company in Dubai:
1. 100% Foreign Ownership
Free zones enable full ownership from the first day. You don’t require a local partner, which allows you to have full control of your business decisions and profits.
2. Zero Corporate Tax
Second, most free zones provide 0% corporate tax. That is more savings and greater profit margins. It’s particularly beneficial for emerging startups and small business entrepreneurs.
3. Fast and Affordable Setup
Free zone companies are quick and inexpensive to incorporate. You can start up your company in a few days with no large upfront capital outlay or delays.
4. Strategic Location Access
Most free zones are situated close to large transportation hubs like seaports, airports, and highways. It makes shipping, logistics, and foreign operations easier.
5. Easy Profit Repatriation
Lastly, free zones allow you to repatriate earnings back home with ease. There are no exchange controls, and therefore, international money transfer is seamless and fast.
Mainland Vs Free Zone: Cost Comparison
Price certainly does matter when choosing the best place to register company in UAE. Whether you decide on UAE mainland company setup or free zone company registration in the Dubai free zone, both come with their own price.
Mainland Company Costs
To begin with, setting up a mainland company is more costly. It will be AED 25,000 to AED 40,000 for registration and licensing. But there is more to it.
Next, you’ll also need to rent a physical office space. It is required by the Department of Economic Development (DED). Depending on the size and location, office rent can add another AED 10,000 to AED 50,000 per year — or more in busy cities like Dubai.
Free Zone Company Costs
The expense in Free Zones is typically much less and more manageable. For instance, establishments such as RAKEZ have packages that range from as little as AED 5,499.
Even better, most free zones have a flexi-desk or virtual office, meaning you don’t have to lease a whole office. It keeps your expenses in check, particularly if you’re starting.
Options Other Than Freezone and Mainland
In addition to the free zone and the mainland, there’s still another path you can follow — offshore company incorporation UAE.
Offshore companies are typically employed in foreign business. It implies that you can’t trade or provide services within the UAE. Rather, such companies are generally established to own assets, minimize taxes, or handle international investments.
Additionally, offshore businesses are ideal for having international bank accounts and handling money abroad. That’s why offshore companies are favoured by investors who reside elsewhere or don’t require an office in the UAE.
Get Help From Us
Our understanding business setup consultants in Dubai are on hand to make it easy for you. First, we hear about your business idea. Next, we describe your best solutions in straightforward terms. Wherever you decide to set up a mainland or free zone, we will do all the paperwork, government approvals, and visa procedures.
FAQs
Q1. Is it possible to own 100% of a mainland company in the UAE?
Yes, it is. Today, the majority of business operations provide full foreign ownership. So, you no longer need a local partner in most cases.
Q2. What is the most affordable option to register a company in UAE?
Typically, free zones such as RAKEZ or SHAMS provide the most cost-effective packages. So, you can begin with just AED 5,499 with minimal services.
Q3. Can a free zone company trade in Dubai?
Yes, but first, you need to appoint a local distributor or obtain a dual license. It permits lawful trading within mainland territories.
Q4. How many visas can I obtain for my firm?
Mainland companies are allowed to apply for unlimited visas. But free zone companies typically receive 1 to 6. Additionally, visa numbers rely on the room space size.
Q5. Who can assist in business setup in the UAE?
Of course, company formation corporate services providers or company formation in Dubai services will guide you. They take care of licensing, visas, and paperwork and provide expert guidance.
Conclusion
If you desire a low-cost, simple setup and global orientation, opt for a free zone company registration in Dubai. Whatever you choose, the UAE provides a solid platform to achieve your business aspirations. Need assistance? Our company formation corporate services providers are at your service.
