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Valuable Information for Starting a Business

What Types of Business Entities Are There?

The UAE offers entrepreneurs different options for establishing a business. The two main variants are the Mainland Company (within the territory of the UAE) and the Freezone Company (in one of the approximately 45 Free Zones). The difference lies in the scope of operations: a Mainland Company is based within the country, while a Freezone Company offers tax advantages in Dubai but does not allow for direct business relations within the UAE. Specifically, these variants are reflected in the following business forms:

  1. Mainland Limited Liability Company (LLC): The LLC within the territory of the UAE is a popular business form in the UAE. It allows foreign investors to establish a company within the country. Today, the formation of such a company is usually possible without a local partner, meaning "100% foreign ownership." In some cases (depending on the specific business activity), a local partner (shareholder/sponsor) must be involved. In this (exceptional) case, the foreign investor can hold only up to 49% of the company shares. This business form is suitable for companies that wish to operate locally (e.g., in construction projects) to benefit from local market opportunities.

  2.  Free Zone CompanySetting up a Free Zone Company in one of the approximately 45 business locations allows foreign investors to hold 100% of the company shares. The Free Zones (including Jafza, Dafza, DIFC, or RAKEZ) are specifically designed for certain industries and business activities and offer tax advantages and a straightforward setup process. Each Free Zone has its own regulations and requirements, which may vary.

  3.  Offshore CompanyAn Offshore Company is a popular option for firms engaged in international business and those managing real estate or other assets. This business form offers tax benefits but is generally not allowed to conduct business in the local UAE market.

  4.  Joint VentureA Joint Venture is a collaboration between a foreign company and a local partner or company. This form of partnership allows both parties to benefit from their respective strengths and resources. Profit and risk sharing are outlined in a mutual agreement.

The specific regulations and requirements for international investors vary for each business form. It is recommended to consult professionals to choose the best business form for your company in the UAE. Our agency has the necessary expertise to facilitate your business setup in the Emirates. We offer market entry consulting, company formation, fiduciary management, administrative support (compliance), legal advice (labor law, corporate law, tax law, real estate law, etc.), accounting and bookkeeping, import, export, and administrative work, processing of residence permits (visas), and much more. Consult with specialists.

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