6 differences between Offshore and Free zone business setup in UAE | Offshore & Free zone

Differences between Offshore and Free zone business setup in UAE

Investors have the liberty to choose from the mainland, free zone and also offshore business setups in UAE. Although, businesses/companies in the mainland jurisdictions may not be incentivized like free zone and offshore.

Similarities between offshore and free zone:

  • Complete foreign ownership of an entrepreneur
  • Complete repatriation of profits

Differences between offshore and free zone business setup in UAE:

   1. VAT and other related taxes
  • VAT and also other taxes are still not applicable to offshore companies.
  •  After the recent implementation of value-added tax (VAT) in UAE; Nearly 20 free zones are exempted from the VAT .
    2. Office space
  • It is not mandatory for an offshore company to rent an office or office-space in the county
  • Office space is mandatory for companies in any of the free zones
    3. Employment visas’
  • No employment permits/visas granted
  • Employees and also Shareholders of a free zone company can easily get UAE residence visa
   4. Privacy and Secrecy
  • Names and identities of owners, directors, and also  shareholders of offshore companies are not made public
  • No advantage of secrecy in the free zones


   5. Business activity
  • Not permitted to execute any kind of business activity in UAE. However, they can execute business activities outside the UAE
  • Import & export of products and also goods are permitted in UAE. Nonetheless, restrictions are laid on carrying out business in the UAE local market


   6. Minimum share capital
  • There is no minimum share capital requirement
  • Minimum share capital should be deposited in the bank