UAE Mainland vs Freezone Comparison

UAE Mainland Vs Freezone

Sovereign PPG provides a complete range of company set up solutions to help entrepreneurs turn business ideas into fully-ﬂedged companies. We combine our in-depth knowledge of government regulations and international standards with experience of the Middle East market to accelerate the company formation process and deliver valuable services that beneﬁt our clients.

Sovereign PPG has formed over a thousand companies in the UAE Mainland and Freezone jurisdictions. Our clients are always particularly interested in the key differences between Freezone and Mainland company set up. With our expert knowledge of the market, we help advise our clients on the best jurisdiction based on the company’s business activities and target market.

Free Zones:

There are over 40 free zones in the UAE. Typically, free zones have been established to accommodate specific industries with technology and infrastructure in place to support certain business activities. For example, Dubai Airport Free Zone Authority (DAFZA) has a core focus on logistics and aviation sectors.

Mainland:

A mainland company is an onshore company licensed by Department of Economic Development (DED). Mainland companies can conduct business in a majority of industrial, commercial, trading, professional or tourism activities. Mainland companies are known for their less restrictive trading opportunities.

Free Zones:

Mainland:

Posted 03/03/2023

Considerations	Mainland	Freezone
Conduct Business	No geographical restrictions Inside or outside the UAE Allows more business activities Bid for UAE government contracts Year-end audit required Can apply for ADNOC access	Within the registered freezone and internationally No services or products can be sold into Mainland UAE Limited access to government contracts Work with ADNOC generally not possible
Ownership Structure	Can be 100% foreign owned (for majority of business activities) Abu Dhabi Activities List Dubai Activities List May require or elect to have local corporate nominee partner	Full foreign ownership and control
Office Space	Minimum requirement of 140-200 sqft office space Choice of office location in the emirate and can establish multiple branches Virtual office space options available for 1-2 visas For certain activities in Abu Dhabi – no office space requirement	Office space not always required Generally office costs are higher Lower cost ‘virtual office’ space options available for 1-2 visas
Visas	No visa restrictions (subject to workspace and labour quota) Visa process direct with immigration Must be registered with Ministry of Labour, pay staff through WPS and provide Health Insurance	Some visa restrictions depending on the freezone (ranging from 1-6) Visa process through freezone authority Special permissions may be required for staff
Governing Bodies	Department of Economic Development Dubai Municipality Ministry of Labour	FreeZone Authority – each freezone has its own regulations and government regulatory body
Tax	No personal income tax 9% Corporate Tax from June 2023 on net profits exceeding AED375,000	No personal income tax ‘Tax Holidays’ offered for each freezone Exempt from Corporate Tax (June 2023) assuming trade is based outside of UAE or net profits less that AED375,000
Cost	May initially be a larger fee, but provide a more inexpensive path to growth – PPG experts can provide guidance best suited to your business Abu Dhabi gov fee have been reduced by 50%	May initially be less expensive to establish, but be mindful of company growth as further costs may be required for staff office space, etc. – PPG experts can provide guidance best suited to your business
Import/Export	Can import and trade within in the UAE – within their activity range	Exempt from import and export duties Cannot import or trade in the UAE or with UAE counterparties – must use an onshore agent

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