The difference between mainland and free zone companies in UAE

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The difference between mainland and free zone
companies in UAE
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• The most frequently asked question by
  entrepreneurs looking to start a business in
  mainland Dubai or the Dubai Free Zone is, "What's
  the difference?"
• In this blog, we will discuss some basic
  differences so that you can make informed
  decisions about what is best for your company.

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1. What is the difference between Dubai Mainland
and Dubai Free Zone companies?

• Mainland Companies In Dubai, the mainland
  company is also referred to as the Onshore
  Company. It is licensed by the Dubai Department
  of Economic Development (DED) and allows
  companies to operate in the local market as well
  as outside the UAE without restrictions.
• Free Zone Companies Companies established in the
  free zone of any emirate of UAE are known as free
  zone companies. They are tax-free and have other
  benefits.

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2. What are the differences in ownership
structure?

• Mainland Business Foreign investors can own only
  49 of the company. To set up a business in Dubai
  Mainland requires a local sponsor, who must own
  51 percent of the company.
• It also refers to the type of license you are
  getting. If you have a commercial license, you
  own 49 percent of the company. If you have a
  professional license, you will own 100 of the
  company, with one UAE national serving as a Local
  Service Agent.
• Free Zone Companies If you set up a company in
  Dubai Free Zone, it belongs to you. You have
  complete control over your company's operations.
  It does not require a local investor.

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3. What are the operational structure
differences?

• Mainland Businesses If your company is based on
  the mainland of Dubai, you are permitted to
  conduct business anywhere in the UAE, including
  all free zones, as well as internationally.
  Commercial, professional, and industrial
  activities are all available. Banking and
  insurance are the only exceptions.
• Free Zone Companies If your business is
  established as a free zone company, you are only
  permitted to trade within the Dubai Free Zones or
  internationally. You are unable to access local
  markets. If you want to do so, you'll need to
  hire a local agent.

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4. What are the differences in the workplace?

• Mainland companies The minimum requirement for
  mainland businesses is 200 square feet per year.
  If you want to rent more than that, you need to
  get a license from the DED (Department of
  Economic Development).
• Free zone companies Since they do not have
  actual offices, free zone companies do not have
  to worry about the workplace. They have Flexi
  desks, which allow them to use the Common
  Business Center desk for at least 5 hours per
  week. This service is also known as 'Plug in and
  Go'.

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5. How is the visa service different?

• Mainland Companies One of the major advantages
  of the UAE mainland company is the unlimited visa
  availability. In addition, the Ministry of Labor
  issues e-quotas for mainland companies exhibiting
  visa eligibility. The more employees you have,
  the more space you can get. This excludes visas
  for outside vendors, PRO ad drivers, and
  messengers.
• Free Zone Companies In the smart office package,
  free zone licenses offer two types of visas. Some
  packages also allow for 3-6 visas. It is
  dependent on the emirate. If you require
  additional visas, you will need to rent a
  physical office space or a warehouse.

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• To choose the right type of jurisdiction for
  their business, new business owners and investors
  should seek advice from best business setup
  consultants in Dubai.