Difference between Mainland, Free Zone and Offshore Company Formation in Dubai

Dubai offers plenty of options when it comes to business set up. Your first step to setting up a business must be to understand the difference between free zone, offshore, and mainland company formation in Dubai. Opt for mainland LLC if you want to trade within UAE. Choose free zone if you’re going to trade out of UAE, and select offshore if you don’t want to set up a company in UAE but want to protect your wealth. Given below is the brief description of each company formation in Dubai.

 Mainland

A mainland company formation in Dubai must be sponsored by a UAE national. It is registered with the government body of that particular Emirate. Every emirate has its own economic development department. This department issues business licenses to mainland LLCs (Limited Liability Company). Mainland companies can get better deals on services such as office rents and are not limited geographically to free zone districts. You can evenhave international clients along with your UAE clients if you have a Dubai mainland LLC license. A local business solution such as Flyingcolor can help enormously in the mainland company Formation in Dubai by getting government approvals, trade licenses, and taking care of the immigration and visa needs.

Free zone

Free zones allow 100 percent ownership to expats. It is a separate physical entity which has its own set of rules and regulations. International companies are offered asset protection, excellent infrastructure, and tax exemptions by free zones. As each free zone has its own rules and regulations, you need to go through each of their rules to decide where you want to set up a free zone company. These rules come with certain pros and cons, and you need to understand which free zone can cater to your business needs the best. But as a free zone establishment, you are not licensed to operate anywhere else in UAE and have to conduct trade within that free zone. But limitations are negligible in front of the tax exemptions. A business set up can help you form business set up in the UAE free zone easily by offering cost-effective and quick service packages; from registering the company to handling all the business formation requirements.

Offshore

If you want to trade privately and protect your asses, offshore company formation is the best company formation. UAE offshore companies are non-resident companies and cannot conduct business in the emirates. They can only get a certification of incorporation. Emirates do not enter into the financial information sharing treaties with other countries, and therefore guarantees company protection. In short, offshore company formation reduces tax burdens, set up cost, maintenance cost, helps in succession planning, protects wealth and assets. But to prevent abuses of the system, these companies are subject to intense legal scrutiny. Therefore, a business set up solution can help in ensuring that the company gets formed in accordance with the UAE’s legal system.

After choosing the operating jurisdiction, you can select the license based on the activities you wish to engage in. You can then proceed to prepare legal documents, open bank account, and start the visa process. These process can be simplified tremendously with the help of a business set up solution.

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