The different types of UAE business licenses

Investors wishing to build a business in the UAE have two main license options (there are others, but these are the two key ones) 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. Let’s take a quick look now at each.

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.

 

One of the key things to note, however, is that with a mainland company you are required to have a local partner or service agent. The first question that usually follows is ͞How much ownership will this individual have?͟ Not to worry, the issue of ownership is not the concern – you will more or less be having full ownership unless you choose otherwise. What is, however, important to take note of is that the right local partner or service agent is often key to ensuring certain very important administrative issues do not hold up your business. Should you be heading down the mainland company setup route, be sure to ask your company setup provider for full details on this issue.

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 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 al times; there are no corporate or income taxes; there are no customs duties levied on imports or exports; and one 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 such as 100% foreign company ownership. 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 the import/export trade.