What is the difference between a free zone and the mainland?

The mainland of the United Arab Emirates (UAE) is defined as the area of each individual Emirate with the exception of its free zones. Depending on where you wish to incorporate your company, you must comply with the rules and regulations of the respective Emirate or free zone. Mainland and free zones differ in particular when establishing a company with limited liability. In free zones, 100% of the shares can at all times be held by foreigners. In contrast, it depends on the activities to be conducted by a UAE mainland company whether 100% foreign ownership is permissible or whether an Emirati majority shareholder (so-called sponsor) needs to be appointed.

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