What are the differences between mainland and free zones in Dubai?
What do ‘mainland’ and free zone’ mean in Dubai’s business landscape?
In Dubai, ‘mainland’ refers to the areas outside the free zones. Companies established on the mainland are issued licences by the Department of Economy and Tourism.
On the other hand, ‘free zones’ in Dubai are specially designated areas, often sector-specific. Each free zone operates under its own rules and regulations for licensing and registration.
What are the jurisdictions for conducting business in Dubai’s mainland and free zones?
In Dubai’s mainland, there are no territorial restrictions on business activities. Companies here can operate both within and outside the UAE, including the broader GCC region. This includes the free zones.
Meanwhile, free zones in Dubai primarily focus on business activities outside the UAE. However, six specific free zones offer dual licences, which allow businesses to engage in both onshore and offshore activities.
What are the ownership options when comparing mainland and free zones in Dubai?
In the mainland, foreign investors are permitted full ownership, according to the Federal Decree-Law No. 26 of 2020, which amended Federal Law No. 2 of 2015 on Commercial Companies. This means that foreign investors can have 100% ownership in more than 1,000 commercial and industrial activities. However, this excludes economic activities with a strategic impact, which relate to certain specific sectors.
In free zones, foreign investors can have 100% ownership of all companies.
Do mainland and free zone companies in Dubai differ in their Emiratisation requirements?
Yes, it is mandatory for mainland companies that a minimum of 2% of their skilled workforce consists of Emirati nationals.
Conversely, businesses operating within free zones have no Emiratisation requirements.
On the other hand, ‘free zones’ in Dubai are specially designated areas, often sector-specific. Each free zone operates under its own rules and regulations for licensing and registration.
What are the jurisdictions for conducting business in Dubai’s mainland and free zones?
Businesses setting up on the mainland have a diverse range of legal forms to choose from, aligning with their intended business activities. These options include General Partnerships, Limited Partnerships, Limited Liability Companies, Single Owner Limited Liability Companies, Private Joint Stock Companies, Single Owner Private Joint Stock Companies, Public Joint Stock Companies, Civil Companies, and Sole Proprietorships.
In Dubai’s mainland, there are no territorial restrictions on business activities. Companies here can operate both within and outside the UAE, including the broader GCC region. This includes the free zones.
Meanwhile, free zones in Dubai primarily focus on business activities outside the UAE. However, six specific free zones offer dual licences, which allow businesses to engage in both onshore and offshore activities.
What are the requirements related to a physical office or presence for businesses, depending on where they set up?
In Dubai’s mainland, businesses are required to have a physical workspace with a minimum size of 100 sq. ft. There are no restrictions on the location where the company can rent or buy office premises.
Conversely, there are no compulsory physical office space requirements for free zone companies. Free zones provide the option of virtual and flexible desk solutions for business licences. However, if businesses choose to lease office space, it must be within their free zone.