CHOOSE THE RIGHT TYPE OF COMPANY REGISTRATION IN UAE
Our research based advisory provides most suitable solutions relevant to your business plan

SHOULD I REGISTER A MAINLAND, FREEZONE OR AN OFFSHORE COMPANY?


Registering a company with the appropriate authority creates a smooth and seamless path to enter the UAE market and later to grow the business without encountering any operational and legal issues.

Choice of an authority with which a license has to be registered entirely depends on your business plan, business activity, target market and financial goals to be achieved along with the initial budget.

Following are carefully designed questions and answers to provide in-depth knowledge.

Question:
Under which circumstances, one should register company on mainland?
Answer:

  • Whenever the customer has a business plan whereby his/her majority of the customers and operations are on mainland, it is highly advisable to register company on mainland.
  • Whenever the customer wants to rent or buy an office or shop within mainland geographical areas, then the company must be registered on mainland. For an example to open a restaurant, customer choose the shop location in Karama or business bay or Sheikh Zayed Road or AL Barsha or Dubai Marina or Motor City or any other such mainland location, then company also must be registered as mainland company.
  • If the customer has choose the activity of business which is only approved by Government authorities as mainland activity then the company must be registered as a mainland company. For an example real estate brokerage company (RERA) or custom clearing agent (CUSTOM) or tourism activity (DTCM) etc. However once the mainland company is registered, it can open a branch company in freezone.
  • If the customer wants to import goods and store it in a warehouse located on mainland then the trading company also must be registered on mainland.
  • If the customer wants to participate in a government tenders related to his business activities, more than likely the Government will for a mainland company registered in an Emirate where the tender is announced.

Question:
Under which circumstances, one should register company in freezone?
Answer:

  • Whenever customer wants to import goods and store it in a warehouse in freezone and re-exports it out of UAE then free zone is the best option to register trading company.
  • When customer wants to open a manufacturing unit and then wants finished goods to be exported out of UAE or been sold on mainland through distributor on mainland then free zone is the best option.
  • When customer wants to conduct commercial activity and wants to own 100% shares of the company then free zone is the best option. However he/she cannot conduct operation directly on mainland.
  • Special note: Free zone companies are not directly allowed to operate on mainland.

Question:
Which is legal jurisdiction for any company to operate its business?
Answer:

Company is allowed to conduct its business in the jurisdiction of an authority under which it is registered. It means that real estate Brokerage Company registered with DED Dubai cannot do brokerage business for Abudhabi or Ajman properties or a transportation company registered with RTA Dubai cannot conduct its business with Abudhabi or Ras Al Khaimah. An approval or a permit or a trade license from local authority will be required or must to register a branch company or must to appoint a registered agency having its license in that particular jurisdiction.

Question:
Under which business plan, an offshore company should be formed?
Answer:

  • An offshore company should be formed when business activity to be operated entirely out of UAE.
  • For structuring purpose to own shares or real estate or trademark or any asset outside or inside UAE.
  • Under an offshore company, residence visas are not allowed. Offshore company cannot even rent an office in UAE.

Question:
Who is the registration Government authority for mainland companies?
Answer:

United Arab Emirates has seven emirates namely Abudhabi, Dubai, Sharjah, Ajman, Umm al Quwain, Ras al khaimah and Fujairah. Each one has a separate Department of Economic Development (DED). Mainland companies are registered with DED of an Emirate where customer is looking to open a business.

Question:
Who is registration Government authority for free zone companies?
Answer:

There are several free zones across UAE. Each free zone has a specific advantage associated with it. Each free zone has its own governing authority who is registering the licenses.

Question:
Who is registration Government authority for offshore companies?
Answer:

There are three jurisdictions in UAE where offshore companies can be registered. JAFZA offshore company is registered with JAFZA offshore authority which is part of JAFZA free zone. RAKEZ offshore company is registered with RAKEZ offshore authority which is part of RAKEZ free zone. Ajman offshore company is registered with Ajman offshore authority which is part of Ajman free zone.

Question:
What all are restrictions on share holding in mainland, freezone and offshore company?
Answer:

  • In mainland company is it mandatory to own 51% shares by UAE national if it a commercial LLC (Limited Liability Company). However practically customer will have 51% share holder UAE national with fixed annual fees regardless of its share in profit, loss, asset or liability as an internal understanding supported by an internal agreement signed with two witnesses.
  • However, an expat can own 100% shares in a professional company on mainland. In this case UAE national will act as a service agent of the company and has nothing do with share holding in the company.
  • Expat customer can own 100% shares in a free zone company regardless of nature of the business.
  • Expat customer can own 100% shares in an offshore company regardless of nature of the business.

Question:
Where can I get more detailed information on company registration for many different types of business activities / industries?
Answer:

We have made a detailed information section on different business activities licenses from different industries. For more information click here

Flyingcolour® assists in all types of Company registration on Mainland, Free zones and Offshore jurisdictions all over United Arab Emirates.

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