Why Mainland not Free Zone?

Mainland or Free zone

Establishing a business in UAE is way more than implementing the appropriate brand and marketing strategies. This is especially true when it comes to what kind of a company you are choosing to setup.

A Mainland structure is one in which limited liabilities are considered for companies that can be established with a set number of shareholders. These companies hold a major advantage with prompt access to the UAE Market. On the other hand, a free zone company is established in isolated areas different from Mainland areas. These are primarily for expatriate company setups without shedding any shares.

Mainland or Free zone
Mainland vs Free Zone

While one might argue there are pros and cons to both, there are major benefits of choosing a Mainland region over a Free Zone, and here’s why. Listed below are a few reasons you should opt for mainland and not free zone for your UAE’s business setup:

  1. Business Overview Strategies

While the business operations in a free zone are limited to a specific zone, a mainland company can carry out business activities throughout the extended UAE market. In addition to this, work collaborations with any party inside or outside of the UAE are permitted in Mainland areas. This presents an excellent business platform that remains absent for Free Zone companies. There are other restrictions to free zone companies based on local businesses in the district and distributor regulations.

  • Employment Eligibility

The employment eligibility factor clearly presents wider opportunities in the mainland region. There are no limitations on visa eligibility, along with the permission to employ offshore staff concerned with sales and other departments. A single visa can be allocated for every eighty square feet of office space. These options become scarce in the case of a free zone. Here, a limited number of visas can be allotted, and any expansion in staffing needs can prove to be a costly affair.

  • Ownership

An LLC and an NSA define the ownership of business under the mainland. These activities are under a license that permits to allot a hundred percent of the shares to the expatriate partner. A robust distribution of shares can be seen under LLC, where fifty-one percent shares are held by a UAE National and forty-nine percent by the partner. This balance isn’t structured under a free zone license, wherein the expatriate owns a hundred percent of the shares.

  • Space Factor

The regulations regarding the office space also come into play when different types of areas are considered. Under a Mainland license, a minimum requirement of 140 square feet of office space is listed. A free zone, on the other hand, does not follow any such standardization. A free zone license can be rendered with or without any actual physical office space. However, this space is subject to various restrictions of use and visa allocations in case of a free zone.

  • Legal Aspects

Dealing with the legal aspects is definitely much easier under a mainland region. No standard approvals are deemed necessary for licensing. The same convenience is not seen in free zone companies where approvals by external authorities are often implemented for the import and export of goods. The convenience of approvals under such governing bodies makes operating legally within a mainland region much easier.

Conclusion These are a few reasons why it is good to go for a mainland region over a free zone. What do you think? Do these advantages play well to your business needs? Consider these factors before you can get starting with setting up your business venture in the UAE.

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