Given the tax benefits offered to foreign investors in the UAE free zones, you may wonder why some choose to set up a local company instead? In fact, in some situations, foreign entrepreneurs have no choice but to go through the LLC or DED.
The major difference? While a free-zone company in Dubai cannot carry out certain activities, especially those related to individuals, this is not the case for a local company. A non-free zone company is free to choose its activity (provided that it is legal in the country and that the necessary authorizations are granted) and can even deal directly with individuals. Thus, a foreign entrepreneur who wants to start a restaurant in Dubai is obliged to choose the LLC.
Similarly, while a non-free zone company is restricted to certain geographical areas, this is not the case for the DED, whose location is free.
Finally, some advantages granted in free-zone are also granted to local companies. Indeed, in the United Arab Emirates, there is no corporate tax and no income tax. Also, with a local company, it is possible to obtain a residence and work visa.
