Setting up a business in Dubai UAE can be tricky for some and unfair to others. The most basic reason for this is that new startups on mainland Dubai need a sponsor, who will get 51% ownership rights of your business.
For any company formation in Dubai, it is natural to worry about the risk of losing ownership, which is why multiple entrepreneurs are now setting up their businesses in the free zone. Without further ado, let us see if it’s any better to have a free zone business over a mainland business.
Table of Contents
For someone looking to set up a new business in Dubai, the choice between Mainland and a Free Zone can be a confusing one. According to a leading insurance authority Dubai, both come with their own pros and cons. Depending upon what suits your business the best, you can opt for either of the options. To help businesses, let us look at some of the major differences below.
Licensed by the Department of Economic Development, a mainland in Dubai is considered as a business operating onshore. A company carrying out operations onshore can carry out business transactions within the local market and out of UAE without unnecessary restrictions.
A free zone is an economic zone that offers tax concessions to business setup in Dubai. The free zone also provides less of a customs duty on a business. Currently, there are more than forty free zone sites within Dubai.
It can be stated that both mentioned zones are almost the opposites of one another. Let us see a few key differences between them
Since the activities of a free zone business setup are limited to its designated area, it is safe to say that free zones were designed to cater to international businesses from across the globe. Foreign entrepreneurs prefer free zones as a setting up a business there is more comfortable, quick, and cheaper.
Each free zone acts as a separate entity and is governed by the law of its respected zone authorities. The Government of the United Arab Emirates can also be seen promoting its free zones by offering various benefits to startups that establish there.
By now, you must have a hint on how free zones are beneficial to your business. They not only help your business ease into its operational state, but they also provide you with multiple opportunities to interact with various investors from the planet.
With so much flexibility and transparency in the free zone areas of Dubai, one cannot help but wonder if it is a reality or just every entrepreneur’s fantasy. Some might argue that the UAE market is cordoned off for free zone businesses, but they should consider that the global market is still accessible to those businesses, with lower taxes and hurdles.
If you are a young entrepreneur and you need some breathing room to carry out your operations, then a free zone business setup in Dubai is where you should be aiming at. Your costs of running and establishing the business would be lower than those on the mainland and you will be surrounded by other international companies in your vicinity to work it.
The best thing for you would be to interact with other international businesses next to you and learn from them. The wisdom of their losses and successes, how they ensure profits, and how they keep operational in troubling times.
Originally posted 2020-06-15 06:12:24.
Hello, I am a professional writer and blogger at Adclays.com. I love to explore the latest topics and write on those topics. I spend the maximum of my time on reading and writing interesting topics which provide valuable piece of information to my readers whether it comes to the latest fashion, technology, healthy lifestyle, business information, etc. Explore my writings by visiting the website.
The importance of localization in today's global market The globalized business scenario has drastically changed…
A business that sells industrial equipment is booming because of its sales. Therefore, as your…
Many of us consider the visible things in our home to be the most important…
Technology has come a long way in recent years, and one area that has seen…
Motorcycle riding is an adventurous experience for everyone. However, new motorcycle riders are way too…
Enterprise content management (ECM) is a system for managing and controlling the types of content…