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Can Freezone Companies Do Business in Dubai
Are you considering establishing a free zone company in the United Arab Emirates (UAE)? One common question that entrepreneurs often ponder is, “Can freezone companies do business in Dubai mainland?” The answer isn’t a simple ‘yes’ or ‘no’ as it depends on the type of business you’re operating. Free zones are distinctive economic zones in the UAE where foreign investors can hold 100% ownership of their businesses, enjoy tax advantages, a streamlined registration process, and the ease of doing business. However, conducting business within Dubai’s mainland as a free zone company comes with certain limitations. Here’s what you need to know.
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Can Freezone Companies Do Business in Dubai
Business Operations in the Dubai Mainland
According to UAE law, free zone companies are mainly permitted to do business within their registered free zone or internationally. If a free zone company wishes to conduct business in the Dubai mainland, it would typically require collaboration with a local distributor.
A local distributor is either a UAE national or a company fully owned by UAE nationals, and they hold exclusive rights to distribute, sell, and promote a free zone company’s products or services within the UAE mainland. They take on the responsibility of managing all necessary processes and formalities associated with importing goods into mainland Dubai.
Digital Services in the Dubai Mainland
Although free zone companies that trade physical goods or services are restricted from operating within the mainland, there’s an exception for certain types of businesses. Specifically, free zone companies providing digital services such as IT, marketing, and consultancy services can conduct business in the Dubai mainland. It’s a beneficial provision that allows these types of businesses to serve a wider clientele and capitalize on opportunities in the thriving mainland market.
The Dual Licensing Option
There’s also the option for free zone companies to obtain a dual license, which allows them to operate outside their free zones without the need for a local agent or distributor. However, this involves certain conditions and requires permission from both the free zone authority and the Department of Economic Development (DED).
Conclusion
While free zone companies in Dubai face some restrictions, they are not entirely excluded from operating within the mainland. With the correct service type or the acquisition of a dual license, free zone companies can extend their business operations to reach the wider mainland market.
For entrepreneurs considering setting up a business in Dubai, understanding these dynamics is crucial. You’ll need to evaluate your business goals, target market, and operational needs to decide whether a free zone, mainland, or dual licensed company is the optimal choice for you.
How Can Choose UAE Help
At Choose UAE, we comprehend the intricacies of setting up a business in the UAE, and we’re committed to making this process as straightforward as possible for you. Whether you’re looking to establish a free zone company, a mainland company, or aiming for a dual license, our team of experienced professionals can provide you with the necessary guidance and assistance. We can help you understand the legal nuances, manage the paperwork, and liaise with the necessary government bodies to kickstart your business. Contact Choose UAE today, and take the first step towards realizing your business aspirations in Dubai.
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