Mainland Company
A mainland company is an onshore company licensed by the Department of Economic Development (DED) of the related emirate which is allowed to do business in the local market as well as outside UAE without any restriction.
Free Zone Company
A free zone establishment is incorporated within a designated jurisdiction of the emirate where the company is allowed to do business inside the same free zone or outside UAE. For commercial licenses and trading of physical goods, the company cannot do local business directly because the government has posed a limitation. For trading in the local market free zone companies can go through a distributor or wholesale agent to continue their business.
Major comparisons details are given below.
1. Scope of Business
Mainland Company
It can freely do business in the local market, any free zone area and outside UAE. It applies to all commercial or professional licenses.
Free Zone Company
It can do business with in the same free zone or outside UAE. It is usually for the entrepreneurs who wish to setup a base in UAE (tax optimization) for their international imports/re-exports.
Restriction usually applies to the commercial licenses bringing in physical goods outside of a particular free zone into the local market, they need to go through distributor or agent to sell their product in the mainland.
Professional licenses can still have the liberty of providing the services without much hassle to the local market. People can reach to them through online and ask for the service
Marketing in Mainland area with printing templates and hoarding are not allowed for free Zone Company.
2. Ownership Structure
Mainland Company
Presence of a UAE National is mandatory in all Professional mainland licenses as a Local Service Agent.
Commercial License: LLC Structure
As per new UAE law, no UAE national required for commercial business license such as Food trading, garments trading, perfume trading, etc.
But for some commercial license they still have the UAE national requirement, such as Construction Company, etc. depend on business activity
In professional license: Sole owner/Civil Company
100% shares are held by foreign partner and UAE National is appointed as a Local Service Agent.
Local Partner/service agent is require ore for government transaction, documents is required for applying visa, amendment, etc.
Free Zone Company
Free Zone license is 100% owned by the expat partner. There is no need for UAE local National as partner or local service agent in the license
3. Office Space
Mainland Company
Mainland license don’t require Ejari/office space as Instant license are now possible which do not ask for Ejari and can start the business in one day.
Some big sector license still required and Office Ejari such as Real estate, Contracting, tourism, etc.
Mainland Company has the benefit of taking office or retail space inside the city and they can change the location any time
Free Zone Company
Free zone license can be issued without physical office and can have virtual office ejari provided by Free zone authority for easy bank account purpose.
They are not allowed to rent office outside the free zone authority legally on the license
Also, many free zone don’t ask shareholder presence and license can be issued without owner presence in UAE
4. Visas Facility
Mainland Company
There is no limitation of visas on the mainland license, An E-quota (electronic quota) is issued to every company in the mainland by Ministry of Labor which shows their visas eligibility and it can be increased if the company require more staff. Eligibility for visas depends on the office space. The more office space you have, the higher number of visas you may get.
Free Zone Company
Free Zone Company has the privilege to have a company without office Ejari but still get the visa whenever required, they need to amend the license every time increasing the visa which will increase the license cost. The best will be to get license with number of visa required at the realy stage to save additional cost
Taking an office in Free zone will save the amendment cost and you can apply the visa quota same like Mainland Company.
