DED License vs Free Zone License in Dubai
Which Dubai license is better for your business, a DED license or a free zone license?
A license from the Department of Economic Development (DED) or one of the various free zones in the city is needed to start a business in Dubai. Although each choice has advantages, it’s crucial to take your company’s needs and long-term objectives into account when selecting the licensing type that will work best for you.
Before entering the market, it is necessary to be aware of the different criteria. The advantages and disadvantages of DED vs. Free Zone licenses are covered in this article along with things to think about before forming a free zone company.
DED License in Dubai
Advantages of Dubai’s DED License
• No limitations on where your business can be located
• Less expensive than free zone licenses
• Availability of regional markets and clientele
• The ability to apply for contracts with the government
• Possibility of sponsoring work permits
Things to Think About Before Obtaining Your DED License
• Limited alternatives for international investors to own
• Greater capital needs in comparison to permits granted in free zones
• Stricter rules and criteria for compliance
• Limited tax breaks and incentives in comparison to permits for free zones
Free Zone License in Dubai
There are more than 30 free zones in Dubai, each with its own rules and advantages. Foreign investors can obtain 100% ownership of their company through free zone licenses, along with several tax perks. The following advantages and things to think about are listed while thinking about a free zone license:
Advantages of Dubai’s Freezone License
• Allows for 100% foreign ownership
• No limitations on capital and profit repatriation
• Tax breaks and incentives, such as 0% personal income tax and just 9% corporation tax
• Simple business setup with little documentation
• Availability of specific markets and industries
Things to Think About Before Obtaining a Freezone License
• Limitations on where your company can be located
• More expensive than DED licenses
• Limited availability of local clients and markets
• Limited ways to submit an application for a government contract
• Limited capacity to support visas for employees
The license that best suits your business will depend on a number of factors, including your budget, long-term objectives, and type of operation.
Some things to think about when choosing are covered in the following discussion:
1. Business activities: Take into account your company’s needs and the kinds of activities you want to carry out. A DED license can be the best option if you intend to conduct business in Dubai and other regions. In the event that you intend to concentrate on a certain sector or market, a free zone license can provide the tailored assistance and rewards you require.
2. Ownership: A free zone license can be your best bet if you’re looking for total control over your company. A DED license, however, can provide additional flexibility if you’re ready to split ownership with a local partner.
3. Location: A DED license can be a better option if you intend to conduct business in Dubai since it enables you to do so anywhere in the city. A free zone license, however, might provide access to a specialized business hub and specialist support if your goal is to concentrate on a certain market or industry.
4. Costs: Take into account the price of acquiring and preserving a license. Although they may require more money up front, DED licenses are typically more cheap. Although free zone licenses are often more expensive, they come with tax breaks and other advantages that could make them worthwhile.
5. Compliance: Each type of license, including free zone and DED licenses, has its own rules and specifications for compliance. Select the license that provides the right amount of help and direction based on the amount of regulation and compliance that your company can manage.
Make the Best Choice for Your Company With Professional Advice
In conclusion, thorough analysis of your business activities, ownership choices, location, expenses, and compliance requirements is necessary when deciding between a DED license and a free zone license in Dubai. Each alternative has advantages and disadvantages, and the best decision will rely on your particular business needs and long-term objectives.
IBR Group provides a range of services, from license application and setup to continuing compliance and support, to assist you in making the best decision for your company. In order to help you through the process and make sure you have all the information you need to make an informed decision, our team of the top business setup consultants in Dubai is available. Reach out to us right now to find out more about our offerings and how we can support the launch and expansion of your company in Dubai.