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 continues to be mandatory in the UAE mainland to appoint an Emirati majority shareholder in most cases (so-called sponsor). However, this requirement was generally abolished by a recent reform of the UAE Commercial Companies Law, albeit a practical implementation of the new rules will not be possible until spring 2021 at the earliest.

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