The United Arab Emirates (UAE) is well-known for its dynamic economy and business-friendly environment. It offers entrepreneurs varied options for setting up the business. The UAE’s business areas are divided into three economic zones: mainland, free zone and offshore. In this blog post, let's understand the UAE mainland and free zone company set-ups. Additionally, we will also address some critical questions, such as whether a free zone company is permitted to conduct business on the mainland.
Businesses operating onshore in the Emirates referred to as the UAE mainland companies, abide by state laws. Depending on factors such as business type, liability, ownership and registration, entrepreneurs can choose to establish a mainland business as a limited liability company with up to 50 shareholders or as a sole proprietorship. Licences and registrations for mainland businesses are issued by the Department of Economic Development (DED), facilitating integration into the local economy. This set-up offers strategic advantages for businesses looking to operate within the UAE mainland, leveraging its robust economic framework.
In contrast, free zone companies benefit from tax exemptions, full foreign ownership rights and seamless profit repatriation. These zones, such as the Ras Al Khaimah (RAK) free zone, are strategically located near key logistics hubs, facilitating efficient business operations and global connectivity. With nearly 45 specialised free zones across the UAE, entrepreneurs can capitalise on tailored environments that support various business activities. Wondering if a free zone company can operate on the mainland? Let's explore the possibilities of business set-up in the UAE.
Free zone companies operate under specific regulations set by the local government in each emirate, including the RAK free zone. Each free zone, such as the RAK free zone, imposes its own procedures and limitations. Typically, businesses established within a free zone are restricted from conducting operations outside their designated zone, specifically on the mainland. However, if the company wishes to extend its business to cover the mainland, it has to get initial permission from the respective free zone authority. Then, the company must approach the local Department of Economic Development (DED) in the respective emirate to fulfil licensing requirements.
The RAKEZ Dual Licence has the provision to combine commercial and professional activities under one business licence. With this, entrepreneurs can seamlessly operate their businesses in the UAE on the mainland as well as in free zones. The RAKEZ dual business licence includes a UAE free zone licence as well as a UAE free zone company branch business licence. Furthermore, RAKEZ, through its collaborations with various service providers, offers value-added services such as financial management assistance, banking facilities and networking opportunities with businesses in related sectors, including potential distributors and clients. This support extends to those exploring the benefits of free zone companies and how they might conduct business on the mainland. Book a business set-up consultation with our experts in the UAE. You can contact us at +971 7 204 111 or send an email with your enquiry to info@rakez.com.
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