Difference between mainland and freezone jurisdictions in the UAE
As we previously said there are two main jurisdictions, which issue a business licence in the UAE: mainland (licence issued by local Department of Economic Development) and freezone.
As we previously said there are two main jurisdictions, which issue a business licence in the UAE: mainland (licence issued by local Department of Economic Development) and freezone. Mainland companies have the flexibility to conduct business anywhere within the UAE, including in the local market, without restrictions. They can also engage in contracts directly with clients within the UAE and are not confined to specific geographic areas. In order to open a mainland company, it is compulsory to rent an office, which means that in order to finalise the process and to issue the licence, you need to provide a rent contract to the authority. Majority of the activity allows 100% foreign ownership. You can combine up to 6 activities from the same category in one licence, the combination of business activities from different groups is not allowed (only if you take special approval from the DED) for example you cannot combine cloths trading with consultancy services, you will need a separate licence for each.
On the other hand, freezone companies have simpler application processes. However, they are limited to conducting business within the free zone itself and overseas only, with restricted access to the local UAE market. Freezone companies also generally require a physical office space within the free zone premises, but unlike in mainland, renting an office is not compulsory, you can issue the licence without having premises. Also, some freezone may allow a combination of the activities from different categories, depending on the freezone you can add up to 3 business activities in one licence.
Ultimately, the choice between mainland and freezone depends on factors such as the nature of the business, target market, and long term plans.