A lot of people from across the globe come to Dubai to start their business there. Dubai is considered to be the capital of investment and business in the world and remains a major one. The advantages offered by the location are enormous and inspire people to choose the Emirate to establish their business.
One thing that people are unsure about is whether they should opt for a mainland or freezone-based business setup. Both have advantages and drawbacks. This blog focuses on the distinctions between an open zone and a mainland business set-up.
What is an open zone?
The term “free zone” refers to a zone that provides a variety of tax advantages. They are utilized for economic purposes and are controlled by the respective authorities for free zones.
What is the Mainland?
Mainland is the part of the emirate, which is excluding the free zones. It’s sometimes referred to as the offshore area. This is where the majority of the commercial activities are carried out.
What are the advantages of establishing your business in a free zone?
There are many advantages to Dubai Free Zone companies being formed.
These are as follows
- 100 percent control of the business, even as an expat
- 100% repatriation of funds to the original place of residence
- Affordable prices
- There are many options available for picking the right business activities
- There are many free zones available to choose from
- A diverse business environment
- The ease of doing business
- Simple business set-up procedures
- Benefits and tax exemptions
What are the drawbacks of establishing a business in a free zone?
There are a few drawbacks that come with business establishment in the Dubai free zone.
These are listed below:
- Freezone businesses have only limited access to the local market
- The trade can be restricted by the boundaries. The only way to trade is within zones of no cost, as opposed to mainland businesses.
- They aren’t allowed to conduct trade with foreign countries.
- The office space available is ssmalland therefore it might be costly.
- More stringent regulations and fewer flexibilities are available.
What are the benefits of establishing a business within the Dubai mainland?
Business set-up in Dubai mainland has a lot of advantages for those looking to get their company established in this region.
These include:
- Access to the local market indefinitely.
- There are more offices in the area.
- You can sponsor several visas in thsame licenseeee
- No restrictions on trade boundaries
- The commercial activities that are available offer a wider range of business activities.
- 100% ownership of expatriates
- 100% repatriation of 100% of funds is permitted
- There is a lot of possibility of flexibility for entrepreneurs.
- Business-friendly ease
- Simple business set-up procedures
- You could also collaborate with the government and other governmental organizations.
- Modern technology
What are the negatives of setting up a business within the Dubai Mainland?
There are a lot of advantages of having a business establishment in the Dubai Mainland. However, some disadvantages come with the similar.
The following are the disadvantages:
- Certain activities don’t allow expats to be the sole owners of their business
- The setup costs are more expensive
- The tax rate is comparatively higher in this area.
- The competition here is abysmal
- There’s a lot more bureaucracy
How much does it cost to establish a business to operate in Dubai mainland and the free zone?
The expenses of setting up a company in mainland Dubai are greater than in a free zone. But, they are based on a myriad of factors and variables that determine the price of establishing a business in the continental region or within a free area. To find out the exact cost and to plan your budget, input your information into RadiantBiz’s RadiantBiz Cost Calculator and receive the details on the price required.
Which is the most appropriate option?
Both have advantages as well as disadvantages. So, the most appropriate choice for you will be based on the type of business you run budget, your needs, and many other aspects. It is therefore recommended to talk with a professional before making a decision.
RadiantBiz is among the most well-known experts in business setup within Dubai. We have assisted over 100+ clients over our 12+ years of experience in the field. Our experts are dedicated so that you are able to focus on the areas of your business that you enjoy. We will assist you right from the beginning and trust that your business is distinctive. Our customized strategies will assist your business in reaching its full potential of your business. Contact our experts and start today.