UAE, Mainland or Free zone?

The United Arab Emirates has recently made significant changes to its business landscape, narrowing the gap between Mainland and Free Zone business structures. The key difference between the two was once ownership, with Free Zones allowing 100% foreign ownership and Mainland businesses requiring a local sponsor to hold 51%. However, recent regulations now permit full foreign ownership for most business activities in the Mainland, reshaping the decision-making process for investors.

One major change is the flexibility of ownership and business scope. Mainland businesses can now enjoy 100% foreign ownership and operate anywhere within the UAE, engaging directly with the local market. Free Zone companies, on the other hand, can operate within their designated zones and internationally but need a local distributor for direct UAE market trade.

Another difference lies in office and visa requirements. Mainland companies must have physical office space, which influences the number of visas they can sponsor. Free Zones offer more flexibility with various office solutions, including virtual offices, and visa quotas are linked to office size.

Regulatory and compliance frameworks also vary between the two structures. Mainland businesses adhere to the UAE Commercial Companies Law and are regulated by the Department of Economic Development (DED) of the respective Emirate. Each Free Zone operates under its own authority, with distinct rules and regulations.

Tax and customs are other areas of differentiation. While Mainland businesses are subject to standard UAE taxation and customs duties, Free Zones often provide tax exemptions and streamlined customs procedures, enhancing their appeal for certain types of businesses.

The choice between Mainland and Free Zone structures ultimately depends on a company's specific business needs, including the desired level of market access, regulatory environment, and operational flexibility. With the recent changes, the UAE has created a more level playing field for foreign investors, providing them with greater choice and opportunities in this dynamic business environment.

We will help you make the right choice depending on your business needs.

Book brainstorming session with our team to go through the details.