Difference between Mainland and Freezone in UAE

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UAE is always one of the most sought after destination for all the entrepreneurs around the world to start or expand their business. The strategic location of UAE, infrastructure, currency stability, support of the Govt. authorities has made UAE a haven for the entrepreneurs. An entrepreneurs can form a business in UAE either in mainland or free zone or offshore depending on their requirement. Considering UAE’s seven emirates with their seven main land jurisdictions and multiple number of free zones in each emirates makes it overwhelming for an entrepreneur to select the right one. OneClik business setup services LLC FZ assists numerous client to find the right option to select from this enormous options of jurisdictions. We will mainly discuss here the striking differences in between mainland and free zone.

What is a main land company?

A mainland license is issued by the Department of Economic Development (DED) from an emirate. All the seven emirates has their own DED. Mainly when a client needs a physical presence of the business like a shop or retail outlet then it requires a mainland license. This license allows local market transactions as well as outside country transactions.

What is a Free zone company?

A free zone company license is mainly formed where a physical presence or an office or shop is not required. Mainly trading companies who intend to do import and export out of UAE or only inside the designated free zone forms such license. In case a free zone licensed company looking for local market business the same can be done through a distributor registered in the mainland.

Major differences between a Mainland and a Free zone license

	Mainland	Freezone
Ownership	Mainland companies needed a UAE national as a shareholder previously. Now, except for a few activities, expats can enjoy 100% ownership.	Freezone companies have always enjoyed 100% ownership.
Presence of Shareholders	Shareholders must be present to sign documents during company formation.	Verification is done online; presence not required for license formation.
Laws and Regulations	Requires approval from DED and possibly other authorities for regulated activities.	Governed by specific freezone rules; external approvals needed only in some cases.
Taxation	Subject to 9% corporate tax on profit above AED 375,000 annually.	Freezones in designated zones with sufficient substance can be tax-exempt.
Visa	Unlimited visas allowed, proportional to office size. A 200 sq. ft. office allows 4–5 visas.	Comes with 6 visas for a coworking space; can increase with office upgrade.
Office or Shop	Requires Ejari (office/shop rental contract); instant license exempts office in first year.	Includes coworking space; no extra cost unless required for business/client.
Business Activities	Allows 7–10 related activities under one license; can't mix commercial with professional.	Can mix commercial and professional activities; 3–5 activities per license with option to add more.
Cost	Starts at AED 9,000 excluding office rent unless instant license applies.	Starts at AED 6,000 for someone with a valid UAE visa.

It completely depends on the person to select which jurisdiction suits him best. There are several free zones which focus on media or publishing or finance or commodity trading etc. Experienced business setup service providers like OneClik business setup services LLC FZ helps the clients to navigate through different option to find the right one to start the business.

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