Mainland, Offshore and Freezone
Applicable rules differ significantly among different constituents of the UAE. Choosing the right location / legal regime for your business will be one of the initial important tasks when considering a relocation
There are three main options as to the local jurisdictions witin UAE: Mainland, Free Zone and Offshore, each with its own advantages and considerations
Mainland companies are registered and operate within the UAE’s jurisdiction. They have no restrictions on geographic location and can trade freely within the UAE and internationally. Originally, Mainland companies needed to have a local Emirati partner or sponsor with at least 51% owneship but that has changed with many activities not requiring a local partner/sponsor.
Free zones are designated areas where foreign investors can own 100% of their companies without the need for a local partner. They offer various incentives, such as tax exemptions, customs benefits, and simplified incorporation processes. Free zones are geographically restricted, meaning companies can only operate within their respective zones or conduct limited business outside. However, they provide a business-friendly environment with streamlined regulations and excellent infrastructure.
Offshore companies, also known as international business companies (IBCs), are registered in offshore jurisdictions such as Ras Al Khaimah International Corporate Centre (RAK ICC) or Jebel Ali Offshore Company (JAFZA Offshore) in the UAE. These companies are primarily used for holding assets, investments, or conducting international business. Offshore companies enjoy tax advantages, privacy, and simplified reporting requirements. They are not allowed to operate within the UAE and cannot engage in local business activities.
And so mainland companies allow broader market access but may require a local partner, free zones offer 100% foreign ownership and special incentives but have geographic limitations, and offshore companies provide tax benefits and privacy but cannot operate within the UAE.
The choice depends on the nature of your business, target market, and specific requirements. Consulting with a business advisor or lawyer is recommended to determine the most suitable option for your needs.
Choosing the right Jurisdiction for your business is the first and the most essential step of starting your business here in the UAE and our team is here to help you with their expertise in making the right decision.
