The different types of UAE business licenses

Investors wishing to build a business in the UAE have two main license options when it comes to company license types: Mainland and free zone. To take most of the mystery out of the process right upfront here, the chances are you will be setting up a free zone company – the vast majority of new company setups in the country are of this type. And while Company Setup UAE only focuses on free zone licenses, let’s take a quick look at both mainland and free zone below.

UAE mainland company setup

A mainland company license generally gives you more flexibility on the business front, but initially would only be required if you are in a certain industry or if you require more visas than a free zone company would allow for.

 

The flexibility that comes with a mainland license includes the freedom to have an office anywhere in the country, the ability to trade anywhere in the UAE or outside of it, and more possibilities in terms of business activities.

 

Since 2021, a local sponsor is no longer needed to retain 100% ownership of your mainland business. There are thousands of business activities that allow full foreign ownership across the professional, commercial and industrial sectors.

 

Should you be heading down the mainland company setup route, be sure to ask your company setup provider if your intended activity is on the list.

UAE free zone company setup

Why go free zone? We can give many reasons, but a few key ones include:

 

  • Foreign owners can retain 100% ownership in all cases and control of their businesses without the need for a local partner
  • You can get set up and operational very quickly – within a week or two.
  • The cost point can be fairly attractive and generally speaking more or less transparent at all times.
  • There are no income taxes and no customs duties levied on imports or exports.
  • You can repatriate 100% of the profits from the business at any time.

 

So just what is a free zone? They are economic areas where goods and services can be traded, usually at preferential tax and customs rates. They were originally rolled out to boost international business in the region by offering benefits that are not found in the mainland. There are currently about 45 free zones across the UAE.

 

Over the years, the UAE’s free zones have evolved to offer ever-increasing advantages to the businesses within them. Many free zones cater to specific industries or business types – for example, Dubai Healthcare City serves those in the healthcare industry while Jebel Ali Free Zone Authority is directly linked to the largest port in the region and is therefore favoured by those in import and export.