What is the Difference Between Free Zones and Mainland?

Business setup in Dubai has become easier than before. With many benefits, including structured business set-up procedures, 100% ownership, and a variety of industry-specific jurisdictions, Dubai is undoubtedly one of the best places to set up a company in the Middle East. Investors can start a business in either a free zone or the mainland. However, it is important to understand the difference between the two jurisdictions as each has its advantages and investment opportunities.

The two options vary, and each one has a different corporate structure. Here are some main differences that can help investors decide on the perfect option depending on their business needs.

Business Set Up Approvals

Investors in the mainland receive government clearance from various government agencies such as the Ministry of Labor, the Department of Economic Development, etc. In contrast, each free zone has its regulations governing new companies operating within the jurisdiction.

Ownership

The UAE government allows 100% foreign ownership for businesses on the mainland; however, the company must have a local sponsor or UAE national for some activities. On the other hand, investors in Abu Dhabi Free Zones enjoy complete ownership. There are no restrictions. 

Visas

There are no visa restrictions for mainland companies; however, the number of visas given depends on the workspace area. This implies that for a company to get additional visas, it has to rent a larger workspace. In comparison, investors in Dubai Free Zones have restrictions on the number of visas they can be given, ranging from 1 to 6.

Business Scope

Companies within Dubai Free Zones and Abu Dhabi Free Zones cannot operate outside the free zone without a local agent’s assistance. Mainland companies have no such restrictions; they do business everywhere in the UAE.

Workspace 

A mainland business must occupy a minimum of 200 square feet of a physical office. After acquiring the office, you are given a company license by DED. It is not compulsory for free zone companies to secure physical space.

If you hope to start a business in any of the UAE free zones, do not hesitate to contact FreeZoneMarket. We will make your business set-up process easy and cost-effective.