Can a free zone company do business in Dubai?

dubai frame in the UAE

Dubai is an alluring destination for entrepreneurs. The United Arab Emirates (UAE) offers a zero-tax policy, business-friendly regulations, zero currency restrictions, an East-meets-West location in the Middle East, a world-class infrastructure, and high quality of living for residents.

Making Dubai even more attractive for foreign investors is its free zones. These are devised to boost international business by providing 100% ownership to entrepreneurs. Opening a free zone company is the first step to entering Dubai’s flourishing business hub. You might have many questions about free zone companies.

Let’s jump right in. In this article, we will look at:

  • Can a free zone company do business in Dubai Mainland?
  • What is the difference between free zone and mainland in Dubai?
  • Can a free zone company rent an office in Dubai?
  • What is a free zone company in Dubai, UAE?
  • What is a mainland company in Dubai?
  • Working with Trade License Zone

Can a free zone company do business in Dubai Mainland?

No, a free zone company cannot do business in Dubai Mainland. According to Law No 13 of 2011, no company can conduct business activities in Dubai outside the free zones unless through an authorised corporate entity. The only government agency authorised in Dubai to issue trade licenses for Dubai Mainland business structures is the Department of Economic Development (DED). Violation of this law can result in penalty fees of AED 100,000.

However, some free zone companies can do business in Dubai Mainland. Those businesses need to complete the necessary approvals from the free zone to allow them to open an office anywhere in Dubai Mainland.

As we have already stated, some free zones do not permit direct business in Dubai Mainland. These companies are only allowed to conduct business internationally or with other companies in the same free zone.

To trade in Dubai Mainland, a free zone company can do one of the following:

  • Find a Dubai Mainland logistics partner to sell products and services with the UAE on your behalf.
  • Free zone e-commerce businesses can partner with a courier or delivery company to deliver goods in the UAE.
  • Set up a branch of your free zone company in Dubai Mainland to allow you to trade with companies in Dubai.

Free zone companies looking to trade in Dubai Mainland need to directly apply with the Dubai DED. Trade License Zone can guide you on how to submit your application form, structure your company, align your business activities, and begin trading in Dubai Mainland as a free zone company.

What is the difference between free zone and mainland in Dubai?

The difference between a free zone and mainland company in Dubai can be summed up by these explanations:

  • Mainland companies have their trade licenses issued by the DED and are allowed to trade anywhere in the UAE and internationally and face no restrictions on their trade but incur a 5% customs duty on imported products.
  • Free zone companies are incorporated in one of the more than 40 free trade zones in Dubai, face 0% customs duty, 100% foreign ownership, and can trade within their free zone and internationally but not with customers in Dubai Mainland.

The first step in starting a free zone or a Dubai Mainland business is to partner with Trade License Zone. We’ll manage all aspects of your company registration and setup process and guide you on the various governmental and municipal trade regulations for an event management business in Dubai.

Can a free zone company rent an office in Dubai?

Yes, a free zone company can rent an office in Dubai. This can be achieved by applying for a permit from free zones such as Meydan Free Zone.

Various office space types are available within each of the over 40 free zones in Dubai – from virtual desks to conventional offices and even ‘flexi’ and ‘hot’ desk options. Free zone companies can apply for a branch office to rent in Dubai Mainland. Still, those company types may not trade in physical products but instead offer services such as project management, consulting, advertising, marketing, and more.

As we have mentioned, all businesses must obtain a business license to trade in the UAE legally. Dubai has established business zones, each with regulations to support specific industries. The two major categories of business zones are mainland companies and free zone companies. Each has benefits and differences. If you’re unsure which one is right for your business, consult with Trade License Zone’s specialist teams.

What is a free zone company in Dubai, UAE?

Free zone companies are business entities incorporated in Dubai’s specially-created free trade zones. These free trade zones make it easy for foreign investors to enter the Dubai business market. With over 40 free zones to choose from, each one is aligned to a specific industry and field, offering entrepreneurs targeted support to boost business activity and success. Free zones offer zero tax, 100% ownership for foreigners, and access to startup incubators, support structures, and more. Free zones are geographically part of Dubai but are regulated as offshore legal entities.

What is a mainland company in Dubai?

Dubai Mainland companies face fewer restrictions to trade within the UAE and internationally. These company types are licensed by the Dubai DED and are subject to a 5% tax rate. Mainland companies also require a UAE local partner to own 51% shares of the company to trade legally.

Working with Trade License Zone

Business setup in the UAE is straightforward when you partner with a team of experts such as Trade License Zone. Starting a free zone company in Dubai can be a tricky process with applying for the trading license and company structure. When you partner with Trade License Zone, we will save you from unnecessary delays or rejections and streamline the entire process.

The experts at Trade License Zone can get started once you simply provide us with some basic documentation and a little information about the nature of your company and business activities. Then, please sit back and let our team take care of the rest. We’ll manage your trade license and visa applications, communicate with all relevant local departments and authorities and report when you’re ready to trade. It really is that simple.

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