LLC vs. Free Zone Company Formation in the UAE

There are 45 different free zones in the UAE, each offering a similar structure to an LLC. Choosing the right one depends on the nature of the business, the facilities provided, and how many visas are required. Limited liability company formations are most commonly performed on the mainland. When creating an LLC structure on the mainland, the business owner must transfer 51 percent of the ownership to a local sponsor and then hold 49 percent of the business for the foreign ex-pat. However, considering setting up business in Sharjah freezone SPC will be a wise decision.

Mainland vs. Free Zone Company:

*- There are several differences between a Mainland and a Free zone company. Firstly, the former is located onshore and is regulated by the Department of Economic Development (DECD). On the other hand, a Free Zone company is in a free zone and requires licensing and regulation from the Free Zone Authority. Whether registering a Free Zone or Mainland company depends on the type of business you plan to run and your personal preferences.

Another difference between mainland and a free zone company is that a free zone company is not limited to conducting business within the UAE. Moreover, you can own 100 percent of the company and conduct business from anywhere globally. While a mainland company may allow you to transfer ownership, the benefit of a free zone is only temporary, and it does not apply to all kinds of businesses. Furthermore, free zones are defined as tax-free zones that are independently administered by the emirate. As a result, companies in free zones can conduct business without paying any income tax for up to 50 years.

Generally, a free zone company is much easier to set up than a mainland business. Unlike mainland companies, a free zone company can trade internationally or with third-party distributors. Mainland companies are subject to a 9% corporate tax, while those in free zones can pay no tax. Therefore, a free zone company can save you money and avoid the hassles of dealing with DMCC or the local authorities.

Although the difference is small, each jurisdiction addresses these issues in its way. Therefore, when choosing a free zone company, ask yourself these questions and decide which is right for you. For example, it is important to consider if you want to work legally as a professional in the UAE. This is important because it allows you to operate legally without wasting your time and money.