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What are the differences between a Freezone and Mainland company?

What are the differences between a Freezone and Mainland company?

All the global investors are looking UAE with bright eyes owing to its investment friendly policies and other incentives. The investors have their own aims and aspirations, and most of them want to set up a business in UAE. In UAE, there are various options for the investors, and the most popular among all of them is either setting up a Mainland or a Free Zone company. In this article, we will discuss the difference between a Mainland and a Freezone company with the assistance of best company formation lawyers of Dubai.Mainland Company
It is an inland company operating in the local market as well as outside the UAE. With respect to commercial and professional license, it offers complete flexibility. For setting up a Mainland company, a local service agent is required. A Mainland company is registered with the Department of Economic Development (DED). It is responsible for all the core incorporation activities, such as charge of registration, licensing, and issuance of trade license.The standard shareholding agreement involves that a UAE national sponsor holds 51% equity and the foreign shareholder holds 49%. (For drafting shareholding agreement or service agent agreement, you can contact our top lawyers of UAE.

Freezone Company
It is a separate legal body having its own sets of rules and regulations. All the Freezones companies are permitted to carry on their business within or outside the UAE. However, a major distinction between a Mainland and a Freezone company is that a Freezone company cannot operate in a non-Free zone without the assistance of a local agent, whereas a Mainland company can operate anywhere in the UAE. Setting up a Freezone company is a lucrative option for the investors, owing to its benefits such as world class infrastructure, tax incentives, and asset protection.

Difference between Freezone and Mainland Company

  1. With regards to ownership, a Freezone company can be fully owned and controlled by a foreign investor. However, in case of a Mainland company, it is essential to appoint a local service agent. (For drafting a service agent agreement, contact our best law firms of UAE)
  2. Mainland companies can operate anywhere in the UAE, whereas a Freezone company can only operate in the specified area designated to the free zone.
  3. The operation of a Free zone company is very simple and cost effective. It is not required to have a physical office space, and can be operated virtually. However, in the case of a Mainland company, it is essential to have a minimum annual leased out space of 200 square feet
  4. There is no visa limitation for a Mainland license whereas each Free zone license are offered 2 visas on the package of smart offices.
  5. For setting up a Freezone company, there is no need of seeking approval from an external entity before issuance of a license, whereas, in case of a Mainland company, it is essential to obtain the necessary government approvals beforehand. (For getting information regarding compliances and approval, consult our best company formation lawyers of UAE

How can we help you?
Both the Freezone as well as the Mainland companies have their own benefits and restrictions. BSB Legal is a top company formation law firm of Dubai with best lawyers having wide range of experience in setting up of both the Free zone and the Mainland companies. To register your company with BSB Legal, contact us below

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