Why you should choose free zone over mainland for your company setup

UAE free zones offer a lot.

Fast, affordable setup. Quick and easy visas. 0% corporate and personal tax. The list goes on.

But why not look to find the perfect UAE free zone for your new business? You can still enjoy a strategic location with great road and air links while saving on labour costs and having a lower cost of living. A smaller, progressive emirate with an open investment climate could be a great way to get your free zone company off to a great start.

So let’s look at these advantages in more detail.

1. Fast incorporation, easy setup

Mainland companies need to meet certain requirements like UAE national partner or agent, identify the real estate facilities by yourself and provide approvals from various departments depending on the type of activities to confirm that you can set up a business on UAE mainland.

How can a free zone setup help you overcome this?

Free zones, on the other hand, rarely make such demands. All approvals come from a single window and free zones assist to meet all the requirements.

Some free zones even allow potential founders to incorporate their ventures remotely. That’s to say, so long as you have visited the UAE once before, even as a tourist, a company shareholder is not required in person to set up a business provided you can supply a scanned copy of your entry stamp into the UAE. Physical attendance is mandatory if you want to set up a visa-eligible company, but if no visas are needed, the entire process can be completed remotely.

In addition, some free zones do not stipulate an annual audit – taking a lot of pressure off new founders. Some also accept a variety of languages on application forms, thus removing the expensive and time-consuming task of translating all relevant documents into Arabic.

2. Easy visa acquisition

Mainland UAE setup – with Limited Liability Company (LLC) formation being the most popular type – generally requires rented office or warehouse space in line with the number of visas you require. As a general guide, you’ll need to rent anything from 100 square feet up to 200 square feet of office or warehouse space per visa.

How can a free zone setup help you overcome this?

Most free zones have no such requirement for office space. There are some restrictions on the number of visas a free zone company can obtain, but most free zones offer two visas per licence, although there are some that offer up to six.

In some cases, there is no obligation to apply for a visa, giving low-budget ventures quicker and more affordable options for setup. In many cases, with a flexi desk providing your minimum physical presence, you don’t need any dedicated office space if you don’t need a visa.

3. No need for multiple approvals for licences

For business setup on the mainland, trade or business licences (commercial, professional, industrial and tourism) are issued by the Economic Department. All companies, regardless of sector, must at the very least have a trade licence. The application usually requires your memorandum of association, depending on the legal form of your business, certificate of incorporation and shareholder passport copies.

Further approvals are needed from the Ministry of Labor (MOL) and Ministry of Interior (MOI), and if you plan to operate in sectors such as health, education or tourism, you’ll need either additional approval or additional licences from the relevant authorities.

How can a free zone setup help you overcome this?

UAE free zones are governed and regulated by their own free zone authorities, which are responsible for licensing and approval. This removes the need to apply for additional licences or approvals from federal or emirate-specific mainland authorities.

This means quicker and less costly free zone setup.

4. More affordable setup

For UAE mainland company formation such as an LLC entity, licences can cost up to AED 100,000. depending on the nature of your business.

How can a free zone setup help you overcome this?

Across the UAE’s free zones, there are multiple possible combinations for new business setup.

For example, many offer the choice between single-shareholder or multiple-shareholder business entities such as a Free Zone Establishment (FZE) for one shareholder, Free Zone Company (FZC) for up to fifty shareholders, or as a branch office.

You also have a wide choice between commercial, consultancy, freelance or service licences, opening many free zones up to almost any sector.

The cost of setting up a free zone license can start from as little as AED13,500.

Quick and affordable free zone setup

It’s always wise to seek advice on company formation from trusted experts. Deciding which regulatory environment might be best for your company setup could be the difference between success and failure.

But if you’re looking for a quick startup process that is aligned to your business needs in the early days, free zones are the solution. Offering flexibility for growth and allowing you to retain 100% ownership and profits, free zone setups have something to suit every entrepreneur.

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