What is the difference between a business setup in a Dubai Free Zone and a Non Free Zone?

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(Lora Johnstone) #1

What is the difference between a free zone and any other territory of the United Arab Emirates (UAE) for business setup?

(Abdullah Al Khalaf) #2

The territory of the United Arab Emirates is defined as the area of each individual Emirate with the exception of the free zones . Depending on where you wish to incorporate your company, you must comply with rules and regulations of the respective Emirate or free zone. Both areas especially differ when establishing a company with limited liability. In the territory, it is mandatory to appoint an Emirati majority shareholder (so-called sponsor). In free zones on the other hand, 100% of the shares can be held by foreigners.

(Daniel Mc Queen) #3

A Free Zone license will give you 100% ownership of your company and complete control of your business. Incorporating your business in a Free Zone also tends to be a cheaper and easier process.

An advantage of a Non Free Zone setup, a local DED (Department of Economic Development) Mainland license, is that this type of license allows you to freely operate in any area of the UAE. Even though a local Emirati sponsor who would have 51% ownership of your company, certain businesses simply work better with a Non Free Zone license. In other words, when you have a Free Zone license, you are allowed to operate only within that Free Zone but with a Non Free Zone license, you will not be restricted to one area.