The UAE has become a prime location for global economic activity. There are multiple choices when it comes to setting up a business here. You can opt for a mainland limited liability company or a free zone company. The general rule of thumb is that we search for an operating jurisdiction depending on your business type and kind of activities you want to take up in UAE. For e.g. if you are trading company then and want to trade within the UAE you can opt to setup a in the Mainland and if you are an e-commerce company with online sales then a freezone jurisdiction maybe more suitable for you.
The differences between a Mainland Company and a Freezone Company are:
Mainland : A Mainland Company in UAE is an onshore company licensed by Department of Economic Development (DED).
Freezone :A Free Zone Company in the UAE is a company licensed by the Free zone. This is a designated zone with its own individual rules and regulations and a separate business jurisdiction.
Mainland :: A Mainland company is not geographically limited to carry out its business operations. It can work in local markets as well as outside United Arab Emirates without any restrictions. You can do all commercial, professional or industrial activities except banking and insurance. (Under DED Licenses)
Freezone : : A Free Zone Company can conduct its business activities inside the free zone or outside UAE. If you want to conduct business in the local market then you will have to seek help from a local distributor or an agent.
Mainland : Some activities in a Mainland Company requires a local partner / sponsor or a local service agent. The local sponsor will be a UAE national.
Freezone :Free zone establishment grants complete business ownership. Entrepreneur has 100% ownership and control of his business operations.
Mainland : : Mainland companies have no limitation for issuance of visas for employees. Ministry of Labor issues an E-quota for mainland company which shows its visa eligibility. It depends on the size of your office space. A larger work space can accommodate more staff which will be allocated a higher visa quota.
Freezone : : With most Free zone licenses, there are packages available from 2-6 visas. These are offered for Flexi desk office packages and are most economical and useful for small businesses. In case your business requires more visas then you can lease out physical office space in the freezone to fulfill visa your requirements.