Difference in Mainland, Freezone and Offshore

by Instaco UAE Business Setup in UAE

UAE is considered as the most stable and reliable country in Arab. It's now a leading commercial and trading hub trusted by experts. Before initiating any business, it's important to be familiar regarding all the edges of it. For starting a business in the United Arab Emirates, how far have you asked yourself the pros and cons of it? How much you're drenched in particular knowledge regarding it? For business setup in Dubai, one must be clear of all the queries and doubts regarding it for making proper and productive decisions. Let's have some discussion over these jurisdictions.

Mainland UAE

Mainland is also known as the on shore company. It is actually licensed by the Department of Economic Development which allows it to conduct business in the local market and outside of the UAE without interruption. If an expatriate is willing to set up a startup in Dubai, then they have the right to acquire only 49% of shares and the other 51 must be acquired by a local sponsor. These companies have to prepare an audit at the end of the financial year. Companies on the mainland are allowed to do business anywhere in the Emirates. They are permitted to do business inside any free zone. Capital requirement for mainland company formation is minimum and it varies according to legal form of business. In terms of government authorities for company setup, entrepreneurs are liable to take permission from DED, Ministry of labor, Dubai municipality, Ministry of interior (MOI) etc. Cost of setting up a business in Mainland is usually higher than others.

Free Zone Company

Free zone companies do not have as many restrictions as the mainland. Here the expatriate can acquire 100% shares of the company. Service agents and local partners aren't required to start a company. These companies may have virtual offices. No such office space is required. In a free zone it's not allowed to conduct business outside its free zone. In terms of audit, not all the freezone companies are bound to auditing, only a few entities have to take care of audits. That includes free zone companies and free zone establishments. The residence visa depends on the size of work premises. Depending on the emirate it belongs to, this company formation has minimum capital. For approval they have their own rules inside their jurisdiction. They do not require any other authority for approvals outside of the free zone. The cost of this business setup is medium.

Off shore

An expatriate can have full ownership of a company unless it is located outside the UAE. An offshore company can't have any physical presence or office in the UAE and they are not issued with residency visas. They can have it outside the UAE. They cannot do business inside the UAE. They can conduct it from outside. It's not mandatory for them to maintain an audit. It depends whether they want to maintain their finances this way or the other. This company in UAE does not have any minimum capital requirement. Their information can never be public. The free zone authorities of that location are responsible for their approval. Cost of this company setup is usually low.

These three are somehow similar to each other in some way and differ in many aspects. One must choose the location according to one's business purpose. For guidance and interactions you can reach out to Instaco.