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Difference Between Mainland and Free Zone Company Formation in Dubai



Mainland UAE company formationWhen setting up your company in Dubai, one of the first steps you should accomplish is choosing where in the city you would like to operate your business. In Dubai, entrepreneurs are basically offered two options for the location of their company: a mainland office or a free zone office. Let us take a look at some of the differences between these two locations.

 

Business Ownership and Operations

Free zones are basically areas in Dubai specifically allotted and chosen to accommodate foreign investors interested in establishing their business operations in the city. Also called free trade zone or free economic zone, these locations provide 100% foreign ownership to the investors and a very convenient single window administration for the requirements related to company set up.

However, when it comes to operations, companies in the free zone are only limited to doing business outside of Dubai and cannot sell their products or services within the city without looking for local distributors or agents to handle their transactions. Some examples of companies who might fit this business model are export and import companies and courier services.

Meanwhile, setting up your company in the mainland of Dubai means you cannot have 100% ownership of your business. You would need to find a UAE national to be your local sponsor and you are only allowed to get a maximum 49% foreign ownership for your company.

When it comes to operations, however, having a company in the mainland would give your business access to the local market of Dubai. You can set up your office or store in several malls or buildings in the city and conduct your operations just like any other local business in Dubai. This would be the right choice for you if you are really aiming to cater to the local residents and market of Dubai.

 

Time frame for Setting up your Company

There are also differences between free trade zones and mainland business set up when it comes to the time frame of the actual process.

For free zone companies, the length of the entire company formation process will also depend on what free zone area you choose to establish your business. That’s because each free zone also has its own set of requirements and procedures.

For mainland companies, the time frame of your company set up will also depend a great deal on finding the right local partner to become your business sponsor. There are also different documents and licenses connected to establishing your office in the mainland so it will all depend on how diligent you are in completing those requirements.

For both free zone and mainland, you should between 3 to 6 weeks for the entire company formation process.

These are just some of the important differences of choosing to establish your company in a free trade zone or in a mainland location in Dubai. For more details, Chambers Dubai is always available to give you the information you need. Please contact one of our experienced consultants today.