Mainland VS Freezone

Difference between Mainland and Freezone companies

#1. What is Mainland company?

It's important to note that mainland companies in the UAE, registered with the Ministry of Economy, enjoy the flexibility of conducting business both within and outside the country. The Department of Economic Development (DED) issues their trade licenses, offering extensive business activity options.

A mainland company, registered with the Ministry of Economy, conducts business within and outside the UAE, in contrast, a Free Zone company operates within a specific free zone

#2. What is Free Zone Companies?

A Free Zone company is an entity registered in a free zone; an autonomous jurisdiction area located within each emirate. The Free Zone Authority (FZA) is the regulatory body that operates free zones and regulates their functions. Currently, there are over 45 free zones across the country that offer 100% ownership and many other unique features.

#3. Mainland vs free zone: What are the differences?

A mainland company, registered with the Ministry of Economy, conducts business within and outside the UAE. Trade licenses are issued by the DED, with some activities requiring a local sponsor. In contrast, a Free Zone company operates within a specific free zone, offering 100% ownership and unique features regulated by the Free Zone Authority (FZA) across over 45 zones.

Main Differences:

1. Ownership
   • • Mainland: May require a local sponsor; recently allows 100% foreign ownership for moat of activities.
   • • Free Zone: Offers 100% ownership without a local sponsor.
2. Location
   • • Mainland: Can be located anywhere in the country.
   • • Free Zone: Located within the designated free zone across the UAE.
3. Workspace
   • • Mainland: Requires a physical office.
   • • Free zones often allow virtual workplaces.
4. Business Scope
   • • Mainland: Can trade anywhere in the UAE.
   • • Free zone: May require distributors.
5. Approvals
   • • Mainland: Requires approvals from various government entities.
   • • Free Zone: Governed by free zone regulations; no approval from non-free zone authorities.
6. Visas
   • • Mainland: No visa restrictions; number depends on workspace.
   • • Free Zone: Restrictions on visas based on free zone regulations.
7. Capital Prerequisite
   • • Mainland: Determined by legal structure.
   • • Free Zone: Determined by the emirate of establishment.

#4. Comparison of advantages

As you plan to establish your company in the UAE, consider the advantages of both mainland and free zone companies

1. Advantages of Mainland Companies:
   • • Geographic Freedom: Conduct business anywhere in the UAE.
   • • Capital Repatriation: 100% repatriation of profits and capital for most activities.
   • • Visa Flexibility: No restrictions on the number of visas.
   • • Market Access: Unrestricted access to local and global markets.
   • • Diverse Business Activities: Offers a broader range of business activities compared to free zone companies.
   • • Banking Convenience: Ease of obtaining a corporate bank account.
2. Advantages of Free Zone Companies:
   • • Foreign Ownership: Enjoy 100% foreign ownership without a local sponsor.
   • • Quick Formation: Easy and fast company formation process.
   • • Capital and Profit Repatriation: 100% repatriation of capital and profits.
   • • Recruitment Ease: Easier recruitment policies.
   • • Infrastructure Excellence: Benefit from advanced infrastructure and work facilities.