In the last ten years starting a new company setup is very easy in Dubai. It has become one of the fast-growing cities in the world. Moreover, there has been a lot of expectations in the Dubai 2020 Expo. The main aim of the department of Economic Development in Dubai is to make the process of starting a new company set up easy and quick. The mainland and free zone are the two types of jurisdiction in Dubai. There are both advantage and disadvantage for the two jurisdictions.
Free zones are very cost-effective but it is not the only option to start a company in the UAE for overseas entrepreneurs. On a long run starting a business in Mainland is more beneficial if one wishes to get government contracts or trading directly with the Mainland.
If you have plans to start a company in UAE, you should definitely check companysetup.ae. Starting a company set up in UAE depends on various factors like the type of business they are going to start or the target of the customer for that business. Here are some of the advantages of starting a company in Dubai Mainland.
Mainland Company – Target
If your target company is other mainland companies then it is beneficial to set up your company in mainland jurisdiction because they are allowed to have trade with other mainland companies. There is no restriction for mainland companies to have access within UAE and outside whereas free zone should trade only within their jurisdiction and they do not have access to trade with mainland companies. If free zone companies like to trade with other jurisdiction then they need a local distributor and they should pay tax to them.
Scope of Business:
There is lot of restriction in the scope of business for the free zone companies. Example: In UAE the companies located in knowledge village must work only in education or some business related to education. The same is followed in Dubai healthcare city and maritime city.
The huge business in the UAE is government projects. UAE government need specialized contractors for their projects since the investment is very high. If we get an opportunity to work in government projects then we can get more profit in our business. Mainland license is required to get government projects. Free zone companies can work only with private companies. So, if you want to work in government projects then you should start your company in mainland jurisdiction.
Mainland companies can open their branch anywhere in UAE but this is not the case with the free zone companies they have a restriction. The free zone can be open only within their zone. So, if you need your business set up in many areas then choose mainland jurisdiction.
For mainland companies, there is no need for capital. So, starting in Mainland is affordable. When it comes to taxes the free zone have very low tax rate but there are many incentives provided for the mainland companies.