The United Arab Emirates provides a number of options when it comes to setting up a business. You can opt for a mainland limited liability company, free zone company or offshore company. The right operating jurisdiction will depend on your business type and the kind of activities you will be undertaking.
If you want to trade within the UAE, one option is to set up a mainland LLC. If you would still like to benefit from the UAE’s tax-free environment but require complete control over your business, a free zone company may be preferable. (The difference between an LLC and a free zone company is that a free zone company cannot conduct its business in a non-free zone area without a local distributor or agent.) If you do not want to have an office in the UAE but want to safeguard your assets and have confidentiality over your business affairs and profits, an offshore company might be the best option.
To find out more about the difference between a mainland, free zone and offshore company, continue reading.
Mainland Company
A mainland company allows you to engage in trade or commercial activities onshore without being geographically limited to free zone districts – you can have clients from anywhere in UAE, as well as international clients. A mainland company is registered with the government body of that particular Emirate. If you want to set up an LLC, you’ll need to find a UAE sponsor, who must own a minimum of 51% of the company’s shares. Therefore, you are not able to have full ownership of the business. Charterhouse can provide a local individual or corporate sponsor.
Free Zone Company
A free zone is an independent physical entity with its own set of rules and regulations. There are more than 37 free zones operating in the UAE, each with their own special tax, customs and import regimes. The main benefit of setting up a business in UAE free zones is that it allows for 100% foreign ownership, in addition to excellent infrastructure, asset protection and tax exemptions. However, free zone companies can only conduct business within that free zone and are not licensed to operate elsewhere in the UAE. Each free zone is unique and has its own advantages. Charterhouse Lombard can help establish the right free zone for your individual business and activities.
Offshore
UAE Offshore Company formation is the best option if you want to conduct your business privately, while protecting your wealth and assets. UAE offshore companies cannot conduct business in the Emirates. However, such companies come with many benefits including 100% foreign ownership, confidentiality and tax benefits.
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