Dubai has grown into a fast-growing city over the past decade, and starting a business in Dubai is easier than ever. The Department of Economic Development strives to set up a business smooth and efficient over time. There are two types of jurisdiction in Dubai. Land and free zone. Each jurisdiction has its advantages and disadvantages.
Although external free zones look more attractive with cheap proposals and all the titles on offer. If you do thorough market research, you will understand that free zones are not the only option for overseas countries—entrepreneurs who wish to start a UAE business. They may not even be the most profitable business structures. For example, if a person intends to trade directly on the continent or get a government contract, in the long term, it is more advisable to start a business on the continent.
What are The Benefits of Business Setup in Dubai Mainland?
Starting a business in mainland Dubai is considered a land business, and the government allows you to trade in the local market, in the UAE, and even around the world. However, this facility is a suggestion to both commercial and professional license holders.
The Dubai government is proposing better revenue-sharing arrangements. The sponsor has to pay a fixed annual fee and sometimes a percentage of the profits. Most of the time, overseas investors consider a fixed yearly fee that will help them maintain 100% control of their business until the sponsor joins the company and works as a silent partner.
Freedom To Trade with Other Mainland Companies
One of the main reasons for starting a continental company in the UAE is trading with other continental companies. Companies with free zones are only subject to strict trade restrictions within the same jurisdiction. If they wish to deal with a continental company, they will need to contact a locally registered merchant and pay customs duties. However, continental companies have unrestricted access to the UAE and beyond.
Work With government Bodies
The government project in the UAE is a big business proposal. These projects have high investment and returns. This project requires a particular company as a contractor. It was clear that being able to undertake such a project could be very lucrative, and the only way to get such an opportunity was to have a business license on the continent. In this case, companies with free zones cannot offer such opportunities; they can only work with private trading companies. Therefore, any company wishing to enter into contracts with government entities in the UAE must continue to include continental companies.
Free zones have always been in the headlines regarding low taxes and taxation, but that doesn’t mean companies across continents aren’t responding with significant incentives.
Note that no minimum capital requirement is required to make it available for business operations when setting up a continental company.
Wider Business Scope
In the UAE Free Zone, the number of businesses they are interested in is limited. For example, companies in Dubai Knowledge Village may only work for educational companies or similar companies. They do not allow any commercial activity. The same is true for the healthcare city Dubai, where only healthcare is permitted. Likewise, for RAK’s marine business, a coastal town is the best choice. Note that expanding the company’s activities in the free zone goes beyond the licensed free zone operation in other areas of the UAE market.
You Are Allowed To Open Office Anywhere
The most significant and foremost benefit of LLC company formation in Dubai is that you can open an office anywhere in the United Arab Emirates. It is the ideal way to trade in the local market. You can also open offices anywhere in the UAE for a more significant presence across the country.
Whereas companies based in free zones are usually not allowed to operate outside the free zone where they are registered. As mentioned earlier, these companies need distributors to provide services on the continent, which absorb their profits. Therefore, for companies looking for a strong presence and a long-term future in the market, setting up a continent is a more appropriate choice.
After all, starting a continental business in Dubai is easier. So your next step is to analyze your business plan for the next three years and determine if registering in mainland Dubai is the right choice for you.