Choosing Between Dubai Mainland and Free Zone for Your Business
Ownership Structure
Mainland: With recent changes to commercial company law, 100% foreign ownership is now possible in most mainland business activities, eliminating the previous requirement for a 51% UAE national partner for most sectors.
Free Zone: Offers 100% foreign ownership without exception. This has traditionally been one of the main advantages of free zones, though the distinction is now less pronounced with mainland ownership reforms.
Business Activity Scope
Mainland: Allows you to conduct business throughout the UAE and deal directly with the local market without restrictions. You can also bid for government contracts, which is a significant advantage.
Free Zone: Generally restricts your ability to conduct business in the UAE local market without appointing a local service agent or establishing a branch. Free zone companies typically need a local distributor to sell in the UAE mainland.
Location and Physical Space
Mainland: Offers flexibility to set up offices anywhere in Dubai. You can choose prime locations based on your target market and budget.
Free Zone: Requires you to establish your office within the specific free zone. This can be advantageous if the zone specializes in your industry, creating a cluster of similar businesses and support services.
Visa Allocation
Mainland: Generally offers more flexibility with visa quotas, which are typically based on your office space size and business activity.
Free Zone: Usually has predetermined visa quotas based on the package you select, which might be more limiting for growing businesses.
Cost Considerations
Mainland: Often involves higher initial setup costs and potentially more complex administrative procedures. However, the ability to operate freely throughout the UAE can offset these costs for certain business types.
Free Zone: Generally offers more cost-effective startup packages and easier setup procedures. Many free zones offer "flexi-desk" or virtual office options that can significantly reduce initial expenses.
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