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Dubai Company Formation

When establishing a business in Dubai, entrepreneurs have two main options: setting up in a Free Zone or on the Mainland. Each option comes with its own unique advantages and regulatory requirements, making it crucial to understand their differences before making a decision.

What is a Dubai Freezone?

A Free Zone (or Free Trade Zone) in Dubai is a special economic area that offers unique advantages to businesses. The main purpose of these zones is to attract foreign investment and promote business growth.

Each Free Zone in Dubai typically specializes in specific industries. For example, Dubai Internet City focuses on technology companies, while Dubai Media City is designed for media enterprises. A prominent example is the International Free Zone Authority (IFZA), which offers a more flexible approach by accommodating various business activities under one license.

Most Free Zones provide complete business solutions, including office space, warehousing, and logistical support. IFZA particularly stands out by offering modern smart office solutions and flexible workspace options, along with premium business support services and a digitalized license application process. They act as "one-stop shops" where companies can handle all their business setup and operational needs through a single authority, making it much easier to establish and run a business.

The zones also offer strategic locations - many are situated near key transportation hubs like ports and airports, facilitating international trade and business operations. IFZA, located in Dubai Silicon Oasis, provides excellent connectivity to major business districts and Dubai International Airport.

In a Free Zone, companies can benefit from several key advantages:

100% foreign ownership allowed (unlike mainland Dubai, where a local partner is typically required)

No restrictions on capital and profit repatriation

Streamlined administrative processes and faster approvals

Access to modern facilities and infrastructure

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What Is a Dubai Mainland Company?

A Mainland company in Dubai is a business entity established in the regular territory of Dubai (outside of Free Zones) and operates under the jurisdiction of the Dubai Department of Economic Development (DED).

The key characteristics of Mainland companies include:

Ability to conduct business throughout the UAE without geographical restrictions

Freedom to trade directly with the local UAE market

Option to bid for government contracts and tenders

Requirement for local sponsorship - UAE nationals must own 51% of the company shares (with some exceptions in certain sectors as of recent regulations)ern facilities and infrastructure

Flexibility to open multiple branches across the UAE

No restrictions on the number of visas that can be applied for (subject to office space)

Mainland companies are particularly suitable for businesses that:

Want to deal directly with the local market

Plan to have multiple locations across the UAE

Need to work with government entities

Require a large number of employee visas

Want to establish a long-term presence in the UAE market

The setup process involves more steps compared to Free Zones, including obtaining approvals from various government departments and finding a local sponsor. However, the broader business scope and unlimited access to the UAE market often make this format attractive for companies looking to fully integrate into the local economy.

Currently, Foundster specializes in company formations in the IFZA Freezone, where we offer our clients comprehensive support for their business setup. However, we are working intensively to expand our services. Soon, we will facilitate company formations in additional Free Zones as well as in Dubai Mainland. This expansion will allow us to offer our clients even more options for their individual business ventures in Dubai.