Freezone Vs Mainland: Which Is Better for International Trade?

Freezone Vs Mainland

Dreaming your business setup in the UAE helps you stand as one passionate, responsible and reputed entrepreneur. In the UAE, it feels like becoming an inspiration for other emerging entrepreneurs in the competition. The ultimate competition that can keep you ahead of other performers is the idea of where to establish your business setup in the UAE.

Often, entrepreneurs are confused about their business set up suitability

Would it be either in the mainland or in the freezone?

This question comes with a challenge but a proper setup focus giving clear pathways to the entrepreneurs.

A common fact known by all, the free zone provides tax benefits and 100% foreign ownership whereas the mainland offers unlimited market access with support of local sponsors. Just to explore the market it’s enough but being an entrepreneur it’s your right to learn more about freezone or mainland business setup in depth.

Understanding UAE business landscape 

The developing and developed nations are full of opportunities and growing day by day but entrepreneurs have found only UAE as their favorite place.

Do you know why?

Geographically, UAE is positioned at the crossroads of the major three continents Europe, Africa and Asia. With this positioning, UAE offers a suitable international trade powerhouse with unmatched opportunity and connectivity globally.

It’s not over yet! UAE provides extensive free trade agreements, tax friendly business regulations and logistic infrastructure that provide a strong environment for cross-border commerce. 

These many opportunities and resources might become complex in terms of handling and positioning. To minimize that transactional complexity UAE has come up with 3 particular jurisdictions.

These are mainland, freezone and offshore depending on the market reach and ownership goals required. Here comes the responsibility to understand the UAE business landscape that appears to be the most crucial and initial step towards successful global expansion. 

Visit the official page to learn about company registration and landscape acknowledgement.

What is a Mainland company in the UAE? 

Imagine your business provides you an entire market accessibility of a country and beyond. Do you know, is it really possible in the UAE?

Here comes the definition of mainland company when you seek such market accessibility. For entire market accessibility, mainland companies are an ideal choice supporting your business registration under the Department of Economic Development (DED). Mainland companies provide free trade within UAE and also globally safeguarding the company operations from any restrictions, achieving national and international customer base. 

Mainland facilitates direct operations with government entities which is very ideal for achieving huge public contracts providing your business with physical office space assuring support from local sponsors. With recent regulatory reforms many sectors have been included under 100% foreign ownership and global entrepreneurship opportunities. 

If your vision is to grow your business locally and globally, then visit the official page of mainland company setup process and get the complete guidance.

What is a freezone company in UAE? 

Learning about mainland companies might not align with all the requirements of your business. Or you might be searching for more flexibility, am I right?

Here is another side of the UAE known as free zone companies, where you get global flexibility, zero taxes, 100% profit repatriation and full ownership of your business setup without any local intervention. UAE freezone emerges as one specialized economic area that supports promotion of global trade with simplified regulations, world-class infrastructure and tax exemptions.

Main advantages of freezone company establishment are the outcomes like 0% import-export duty, 100% foreign ownership and complete profit repatriation that motivates entrepreneurs to seek free zones for the most complete control of their business.

However, there is only one limitation regarding free zone companies and that is limits to trade directly in the UAE mainland without a DED license or local distributor. 

Famous free zones regarding trading business comprises DMCC, Sharjah Airport Free Zone, Fujairah free zone and JAFZA Dubai. Each of these free zones are responsible for catering diverse industries with specific budgets and requirements. 

Visit the official page of freezone business setup to choose your perfect trading business in the UAE. 

Freezone Vs Mainland: Major differences of international trade in the UAE

Possibly, you are at the verge of curiosity where you actually require a proper differentiation between mainland and freezone. This can support you to start making decisions about your jurisdiction selection for business setup in the UAE. Let’s get it clear in a breakdown. 

Aspect	Mainland	Free Zone
Ownership	Up to 100% foreign ownership in most sectors except oil & gas and defence.	100% foreign ownership guaranteed.
Trading scope	Can trade across UAE and globally.	Trading scope is limited to Free zone areas where mainland intervention requires mandatory distributors and DED license.
Office requirement	Local office space is mandatory.	A physical office and flexi-desk is required for the free zone.
Taxation	In the mainland, UAE corporate tax above threshold is observed.	0% corporate tax in the freezone area.
Customs & import	Custom duties are normally applied in the mainland.	Exemption in the freezone territory.
Reputation for global trade	Global trade reputation is stronger for both UAE and global based trade.	Its international trade reputation is excellent for import-export, global logistics and re-export activities.
Regulatory authority	Department of economic development (DED) is responsible regulatory authority	Freezone companies are supervised under the Freezone Authority.

Here you find that freezone is ideal for trade efficiency whereas the mainland offers unrestricted accessibility across UAE and globally. 

Pro tips: Opting for perfect jurisdiction will help you target your exact client and achieve your business targets effectively. 

Which is better for international trade – Freezone Vs Mainland? 

Again, a question — which setup will suit my international trade game?

And the answer will take you to the biggest business breakthrough in the UAE. Perhaps you understood the difference and now it is clear that specific business and their categories align your jurisdiction selection whether to be in the freezone or in the mainland.

Freezone company is suitable if you carry the business vision of import-export powerhouse that can support you to connect markets internationally with full ownership, 0% tax and access to logistic-ready hubs such as in DMCC and JAFZA. In the freezone, you can operate efficiently achieving import-export for tech startups across Asia and also you can transition raw materials to Africa. 

On the other hand, you can opt for the mainland if you emerge with a business idea to attract international buyers, government projects and serve UAE retailers with a scope of local credibility and unrestricted market accessibility across UAE and globally. 

In short, if you are focusing on regional dominance then mainland is a great build up for you and if you want to gain global reach then freezone can fuel it. 

Visit the official page of business setup in the UAE for more details. 

Visa and Employment benefits 

Conclusion

Now you have the idea which is preferable for your business setup whether free zone or mainland. Here you can make one ideal choice regarding business model, trade routes and the target market. If you are focusing on free zones you can go with cost efficiency and global logistics.

What if you dream of something big? — You should go for Mainland companies where you can get business scalability and unlimited market accessibility in the UAE and internationally.

Still getting overwhelmed?

Just relax and let’s simplify it for you — you heard it right. We are not only your information partner but we are here to support you with all the guidance from growth planning to licensing and legal compliance your business setup in the UAE will require. Let’s build it together. Contact Us Today!

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