Freezone or mainland Dubai license?

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This is often the first question people have when looking set up a business in Dubai, and it is important to get right because the consequences of getting it wrong can be significant. Let’s go through some of the key factors that need to be considered and dispel with some of the misconceptions.

The first question to ask is where exactly your business will be providing goods or services. If the answer is mainland Dubai, then the simple is answer is that the business should be licensed by the Department of Economic Development (DED) in Dubai. The exception to this rule may be in the case of services that are specifically covered by Dubai’s various “themed” free zones. These often offer benefits like being amongst like-minded businesses although one must carefully examine the costs, particularly real estate and visa requirements, which are often linked.

In the case of professional services licensed by the DED, foreign owners benefit from 100% ownership, contrary to what most people seem to think. The requirement for minimum 51% Emirati ownership only applies to Limited Liability Companies. In most cases, these would be businesses engaged in trading, contracting or other non-service industries. Businesses licensed by the DED often have more freedom when it comes to choice of office location and the ability to provide services to local government entities.

Where one needs to be particularly cautious is when considering free zones in other emirates. These are often promoted as being cost-effective and flexible although they may come with restrictions when operating in Dubai. It is also important to note that a business cannot change jurisdiction, and must start the entire process again from scratch if required to do so. The costs involved include licensing, office, visas, bank accounts, and others and can result in loss of trade name and associated brand value.

A common misconception is that setting up a business in mainland Dubai is expensive when compared to free zones, particularly those in other emirates. This is simply not true. There are many options that allow businesses to set up in a very cost effective manner. Service providers such as Sentinel Business Centres provide turnkey DED licensing solutions that include office space and ongoing business support.

The best way to navigate this seemingly complex landscape is to the seek advice from a professional service provider. Established in 2007, Sentinel Business Centres has helped hundreds of business owners make the right decision. If you would like free, impartial advice for your business, contact Sentinel Business Centres.