Key Differences Between Dubai Mainland And Freezone Licenses

When choosing where to establish a business in the UAE, entrepreneurs must decide between setting up on the mainland or in a freezone. Both options offer distinct benefits tailored to various business needs. However, understanding the differences between these licenses is key to making an informed decision. For those considering business expansion, the flexibility and opportunities of a mainland license Dubai stand out among the available options.

Ownership and operational scope:

An important distinction lies in ownership and operational scope. Freezone businesses often offer 100% foreign ownership but are generally restricted to operating within their designated zones or internationally. In contrast, mainland businesses can operate freely across all emirates and engage directly with UAE markets. Recent changes in UAE laws also allow 100% foreign ownership in specific mainland sectors, making it a competitive option.

Office location requirements:

Mainland businesses are required to have a physical office space on the mainland, with the size of the premises impacting visa quotas. Instead, freezone companies typically operate from shared or dedicated office spaces within their specific zones. This requirement allows businesses to align their location choices with their operational needs.

Access to government tenders:

Another significant difference is access to government tenders. Mainland businesses can bid for government contracts, opening doors to lucrative opportunities in various sectors such as infrastructure, healthcare, and technology. Freezone companies are generally excluded from such contracts unless they establish a mainland branch or appoint a local distributor.

Taxation and customs:

Freezones often provide tax exemptions, including corporate and personal income tax benefits, for a set period. Additionally, freezone companies enjoy 100% customs duty exemption on imports and exports. Mainland businesses, while subject to VAT and customs duties, gain unrestricted access to UAE markets and customers, which balances the cost for many entrepreneurs.

Visa flexibility:

Mainland licenses offer flexibility in applying for employee visas, with the number depending on office size and business requirements. Freezones also allow visa applications but may impose limitations based on the chosen facility. Mainland licenses are ideal for businesses that require larger workforces.

Both options provide unique advantages depending on business goals. For enterprises requiring market reach and operational freedom, a mainland license Dubai is often the preferred choice.