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What's the difference between a free zone company and a mainland company?

If you're an entrepreneur looking for a way to make your business more successful, then you might be considering establishing your business in a free zone. But what is the difference between Freezone and Mainland companies?


The fundamental difference between mainland and free zone is that Free Zone Company cannot conduct its operation in the non-free zone without the support of a local agent whereas a mainland company freely operates its business activities anywhere in UAE.



What is a Mainland Company?


A Mainland company is a company that is registered on the mainland of a country. The mainland is the main landmass of a country, as opposed to its islands or territories. The company is authorized to trade in the UAE local market as well as outside UAE. Mainland companies are subject to the laws and regulations of the country in which they are registered. They also have to pay taxes in accordance with UAE law, while free zone companies may be exempt from tax or have reduced rates.




What is a Free Zone Company?


A free zone company is a company that is registered in a special economic zone. These zones are designed to encourage investment and economic activity. Free zone companies enjoy certain benefits, such as tax breaks and relaxed regulations. As of now, there are over 40 Free Zones operating in the UAE as a whole. Free trade zones are usually located near ports or airports, in order to encourage foreign trade.




Which company is better for you?


So, which type of company is better for you? It depends on your business needs and objectives. If you are looking to promote foreign trade, then a free zone company would be a good option. However, if you are looking to be subject to the same tariffs and taxes as other businesses in the country, then a mainland company would be a better choice.


If you are interested in setting up a business in Dubai, contact us today to learn more about the different types of company setups that we offer.