Major differences between a Mainland, Free zone, and Offshore company in UAE.

UAE business advisory services

Key features

Mainland Company

Free Zone Company

Offshore company

Ownership of Business

The UAE government has allowed for 100% foreign ownership for some specific businesses located on the mainland.
Earlier, the expat business owners were only allowed to own a maximum of 49% ownership of their business while the remaining 50% share belonged to the Emirati sponsor.

The foreign investor enjoys complete ownership of the company. Assigning the shares to a UAE local sponsor is not required. Therefore, the role of a local sponsor is irrelevant here.

The foreign investor enjoys 100% ownership of the company.

Scope of business

A business concern incorporated in the UAE mainland is free to do business anywhere in the UAE market. This means that the company is allowed to do business within the UAE, free zones and offshore. Have ability to trade and do business without restrictions.

There are certain restrictions on the company incorporated in any of the UAE free zones. Free zone companies are allowed to do business within the jurisdiction of the free zone and outside UAE. Although free zone companies are not allowed to trade outside their free zone, you can work with a distributor who can put your goods or services into the local market.

Permitted to trade outside of UAE only

Office space

When it comes to physical office space, a minimum office space requirement of 140 sq. Ft is obligatory for a UAE mainland company.

A physical office space requirement is not obligatory for a Free zone company. Free zone company formation is possible with or without premises. In the case of the UAE free zone, virtual offices/flex offices are allowed.

Not required

Visa Eligibility

UAE mainland companies do not have any kind of restrictions connected with visa eligibility. The area of the workspace determines the number of visas issued. This means that, if the owner of the company requires more visas, he/she should have bigger work premises

Free zone companies have certain restrictions connected with visa eligibility. In ordinary cases, the number of visas issued ranges from 1 to 6. The UAE visa packages vary with the free zone jurisdiction. Issuance of more visas demands leasing out additional work premises.

Not eligible for visa

Company Audit

A Financial Audit is mandatory for a UAE mainland company.

Preparing a Financial audit for a free zone company varies with the Free zone jurisdiction. Certain Free zone jurisdictions are exempted from Audit preparation. Certain Free zone entities like FZE and FZCO should prepare a year-end audit.

Not a requirement

Capital prerequisite

The minimum capital prerequisite of a UAE mainland company is determined by its legal structure;

The minimum capital prerequisite of a free zone company is determined by the Emirate in which the company is formed

No minimum

Leave a Reply

Your email address will not be published. Required fields are marked *