Free Zone vs. Mainland UAE: Differences Explained
Description
In the United Arab Emirates (UAE), businesses can be established either on the mainland or within designated free zones, each offering distinct advantages and limitations. The difference between mainland and freezone lies in their licensing, ownership rules, and operational scope. Mainland companies are licensed by the Department of Economic Development (DED) of the respective emirate, allowing them to operate freely across the UAE market and internationally. Notably, recent legal reforms permit 100% foreign ownership in mainland companies, eliminating the earlier mandate for a local partner to hold 51% ownership.
Conversely, free zone companies are situated within specific economic zones that provide incentives such as complete foreign ownership, tax exemptions, and simplified setup procedures. However, these companies are generally restricted from conducting business directly in the UAE mainland without engaging a local distributor or agent.
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