Beginning in Dubai necessitates several significant considerations. For a Business setup in Dubai, you need to know about the appropriate legal entities for your business, which jurisdiction meets your needs the best, and much more. For this, have two fundamental options: Mainland and the Free Zone.
Mainland businesses may register in any location within the UAE. Mainland businesses, usually known as onshore companies, are overseen by the appropriate government authorities. This is the Department of Economic Development in Dubai (DED).
Similarly, Free Zones are another jurisdiction within the UAE. Free Zones are often known as free trade zones. This region in the UAE facilitates rapid, inexpensive business establishment and commerce.
Setting up in the Free Zones is one of the simplest and most cost-effective methods in Dubai and UAE. Here’s why.
Free Zones Offer Several Advantages
Businesses operating in a Free Zone have access to various benefits. These advantages include the flexibility to repatriate money and earnings, 100% foreign ownership without needing extra approvals, 100% exemption from customs duty, and zero limits on currency use.
As a result of the fact that many Free Zone can cater to specific fields of work and occupations, businesses operating inside Free Zone have access to a wealth of excellent prospects for professional networking, as well as possibilities for mentoring and venture to finance. Most Free Zone also provides onsite office, co-working space, virtual office, and Flexi-desk licensing options for those renting their spaces.
A conventional Free Zone can only do business within its own Free Zone and other Free Zones in the country. On the other hand, they can engage in commerce with the regional market using a branch firm, distributor, or local service agency.
Mainland Vs. Free Zone: What is the Difference?
Most enterprises in Dubai opt to operate from either the Mainland or a Free Zone. But, what is the difference between these two jurisdictions?
Dubai Mainland business
A business in the Dubai Mainland is simply an onshore corporation licensed by the Department of Economic Development (DED). All enterprises in Dubai’s Mainland can trade anywhere in the United Arab Emirates as well as worldwide and are not subject to any trade restrictions. Additionally, you must pay a 5% customs fee on imported products.
Free Zone Businesses in Dubai
There are several reputable Free Zones in Dubai where investors may take advantage of the unique benefits they offer. These include a 0% income tax and customs duty, along with 100% foreign ownership without needing a local partner. One striking restriction of setting up a Free Zone business is that they can only deal with business in their Free Zone or ones in other Free Zones – not with the Dubai Mainland or globally.
Is it possible for Free Zone Businesses to do Business on the Mainland?
Yes, certain Free Zone enterprises can do business on Dubai’s Mainland, but they must first get the proper permissions from the concerned Free Zone authority. However, Free Zone businesses may trade with the Mainland via various channels if they so choose. These consist of:
- Identify a Mainland logistics partner who can transport your products inside the UAE.
- E-commerce businesses in Free Zone may utilize a courier or delivery partner to ship products to the UAE.
- You may also establish a branch office on the Mainland via which you can do the business setup in Dubai.
If you want a Free Zone company setup and want to trade with the Mainland, you must contact the Department of Economic Development, submit an application form, and pay costs. Your business manager in the Free Zone will advise you on the most effective means for your organization to commerce with Dubai’s Mainland.
Steps for a Dubai Free Zone Company Setup in Dubai:
Getting in touch with business setup consultants is the first step in launching a business in the UAE. After a brief meeting to determine your needs, they can effectively assist you in launching your business.
The Steps for the Same are:
Business Activities
Before formally initiating your business setup in Dubai process, you must first finalize your business activities from a list of activities that are approved for use within the UAE.
You may only engage in the activities that are written on your license. You may choose as many as 10 activities within your business license provided, that they relate to the main business sector.
Your Company’s Name
Choosing a company name is a crucial step in starting a business in the UAE. There are many factors to consider before making this choice. One of these is to ensure your trade name does not hurt the sentiments of any section of society, as the UAE holds morality in the highest regard. In short, insulting or profane words should be avoided.
Another factor to consider is to avoid using any sort of abbreviations within your trade name. You must also ensure that the name is accessible for registration.
License Application
We will then handle your license application, communicating with Free Zone authorities and other necessary entities.
We will submit your application to the Free Zone of your choice. Depending on the nature of your business, you may have Free Zone permits in a couple of days. At this point, you need to provide the following information and documentation:
- A filled-out application form
- Copy of the potential owner’s or owners’ passports
- Two passport-size photographs in color.
Applying for Visas
To work in the UAE, a residence visa is also required. The visa application procedure includes biometric scanning, a blood test, a medical examination, and a chest x-ray.
As the bearer of a UAE commercial license, you may also sponsor visas for others. This might be your spouse, your parent, or your child, as well as a housekeeper or domestic worker.
Can Free Zone Business Sell Goods in the UAE?
Yes, a Free Zone corporation may sell directly in the UAE. A service-based corporation, for instance, may offer its services now in the UAE. However, a Free Zone business cannot collaborate with government agencies. A Free Zone corporation cannot sell items directly in the UAE; however, this is a gray issue, and many methods exist to circumvent this. You may start trading with the Mainland while continuing to operate from a Free Zone by:
- Seeking a Mainland logistics partner to deliver your products in the United Arab Emirates.
- If you own an e-commerce business, collaborate with a courier or delivery partner that can deliver packages on your behalf.
- A second alternative entails establishing a branch office on the Mainland.
Hopefully, this article will help you understand that business setup in Dubai is not complex. Professional guidance can help you establish your business in a fraction of the cost and time.
However, it does need some previous understanding of the procedure. In addition, it is crucial to remember that the application procedure is only simple if your license application is complete and error-free at the time of submission.
We are a team of company registration experts passionate about bringing the aspirations of budding entrepreneurs and SME owners to reality. In managing your application for a license, we can help establish corporate bank accounts and recommend the most suitable financial institution for your requirements.
In addition, consultants in Dubai can manage all government procedures, approvals, work permits, and visa applications in the UAE. Also, these professionals can help you with the Free Zone company setup and handle all administrative tasks on your behalf.