If you're seeking to setup your business in Dubai, one of the main questions that occur is deciding the operating jurisdiction. Simply the choice to get a certain type totally depends after the type of your business and the sort of activities that you would like to handle through your business. For instance, if you are a trading company and want to operate within the UAE, go for mainland limited LLC. If you wish to own your business completely, take the benefits of Dubai's taxes exemptions, and have control over its functions, go for freezone business setup in UAE.
Here are some distinctions between both these kinds of company with each featuring its own benefits and constraints.
Mainland Company
It can be an onshore company qualified by DED. Mainland company is not geographically limited to perform its business procedures. It could work in local market segments as well as external the United Arab Emirates without the restrictions.
Free Zone Company
It is set up in another business jurisdiction called as freezone in Dubai. It really is another business entity using its own regulations. It is permitted to execute its business activities inside the freezone. This is actually the basic difference between the two that freezone company cannot work in the non-free area without the help of an area distributor or a realtor whereas a mainland company could work any place in the UAE. There are many free areas in Dubai. The primary reason that foreign traders go tax-free area establishment is to get ownership, make use of the world-class facilities, protect their resources and enjoy taxes exemptions.
Differences
Ownership Composition
Mainland Company restricts the possession of foreign trader to a maximum of 49% and it needs an area sponsor with possession of 51%. The local sponsor is an Emirati, whereas freezone establishment grants or loans complete business possession to foreign shareholders. The businessman has 100% possession and control of the business procedures.
Operational Framework
Mainland Company can conduct business any place in the UAE including freezone as well as outside the UAE. They are able to do all commercial, professional or professional activities except bank and insurance. Businesses of freezone company are limited to the specific area. If indeed they want to visit local market they must seek help from a local distributor or a realtor.
Work Area
The Mainland Company offers a certain minimum dependence on 200 sq. foot to be leased out yearly. From then on, the company will be granted a permit by DED. Alternatively, there is absolutely no requirement of a physical office for free zone companies. They could or might not exactly have physical office buildings depending after their work need. There's a special service called "flexi desks" which can save lots of money.
Time Frame To Create Business
For Mainland, enough time frame because of its setup depends after discovering the right local sponsor and freezone companies will depend after deciding on the best area for business. Usually, it requires between 3 to 6 weeks for both mainland and free zone setups.