Are you planning to set up a business in the UAE? Here's a quick guide to help you make an informed decision

Are you planning to set up a business in the UAE? Here's a quick guide to help you make an informed decision.

Forming a company in the UAE is a relatively straightforward process, but it requires careful planning and research. The first step is to choose the right type of company, mainland or a free zone based on your business objectives, ownership structure, and tax liability. Once you have decided on the type of company, you need to obtain a trade license, visa, and other permits. The registration process can take a few days to several weeks, depending on the type of company and the authority involved. It is crucial to seek professional guidance and support to ensure compliance with local laws and regulations to minimize any delays or complications.

Ownership Structure:

Mainland companies no longer require a UAE national as a sponsor to establish a company. From 1st June 2020 – 100% Foreign Ownership came into effect. On the other hand, free zones allow 100% foreign ownership, providing businesses with complete control over their operations.

Tax Rates:

Mainland companies are subject to corporate tax, value-added tax (VAT), and customs duty. The corporate tax rate is 9%. In contrast, free zones offer a tax-free environment, with no corporate or personal income tax, VAT, or customs duty for international business.

Timeframe:

The process of setting up a mainland company is more time-consuming than a free zone company. It can take up to a few weeks to months to complete the registration process, including obtaining a trade license, visa, and other permits. However, free zones have a streamlined registration process and can be established within a few days to a week.

Minimum Sharecapital:

Mainland requires no paid-up capital while some freezone requires no paid-up capital, some have paid-up capital, depending upon the business activity 

The UAE offers ease of doing business between freezone and mainland companies. Corporate entities registered in free zones can operate in the mainland with the help of a local distributor or through local logistic support, with only 5% custom duty.

In conclusion, the decision to choose between a mainland or a free zone largely depends on your business objectives, ownership structure, tax liability, and timeline. Mainland companies offer access to the local market and lower setup costs, while free zones provide 100% foreign ownership and a tax-free environment.

For further assistance and guidance in setting up your business in the UAE, please visit our website at www.micapitalservices.com