Why Mainland – LLC Company is always better than Free Zone Companies in UAE
Dubai has become a fast growing city over the last decade and starting a company in Dubai is easier than ever. The Department of Economic development has a goal to make the process of setting up businesses smooth and time effective.
If one intends to trade directly in the Mainland or acquire government contracts then setting up a business in the Mainland is more advisable in the long run.
Benefits to have a Mainland Company Setup.
1. Target to trade with other Mainland companies
One of the most important reasons to set up a UAE Mainland company is to be allowed to trade with other Mainland companies. Whereas with free zone companies there is a strict restriction of trading only within the same jurisdiction and in case they want to trade with any Mainland Company they have to go through a local registered distributor and pay customs duty. Mainland companies however have access within UAE and beyond without any restrictions.
2. Wider Scope of Business
UAE free zones have a restriction when it comes to scope of businesses they cater to. For example, companies in Dubai Knowledge Village should only work in education or similar businesses. They do not allow any trading activities. The same goes for Dubai Healthcare City where healthcare related businesses are only allowed. Similarly RAK Maritime city is only for Maritime businesses. Also it should be noted that expansion of a Free Zone Company’s Activities beyond their Free Zone licensed areas of the UAE market is not allowed.
3. Work along with government bodies
Government projects in UAE are huge business propositions. These projects are high on investment as well as return. These projects need specialized companies to be their contractors. Its clear that being able to take up on such projects can be extremely profitable, and the only way to get such opportunity is having a Mainland business license. As it stands, free zone companies are not allowed to pitch for such Government opportunities, Free Zone Companies can only work with Private Commercial Companies. Any business that intends to get contracts with UAE governmental bodies therefore must go ahead with Mainland Company formation.
4. Market Presence
The biggest and most important advantage of setting up a UAE Mainland Company is to allow one to open an office anywhere in UAE. This being the ideal way to trade in local market also allows you to open offices anywhere in UAE and thus have an enhanced presence all over the country. Whereas companies set up in Free Zones are generally not permitted to operate outside of the Free Zone they are registered in. Therefore, for businesses looking for a strong presence and long lasting future in the market, a Mainland setup is a more suitable option.
5. Financially viable
There is that no minimum capital requirement is required in Mainland Company formation- thus making them an affordable way of doing business.