Location:

The main dissimilarity between these two categories of business are their location. Freezone businesses are purely situate in free zones such as Ajman Media City Freezone. There are more than 40 freezones in UAE, and all of them are ideal locations for businesses due to their business-friendly laws and regulations. On the other hand, offshore businesses can be set up only within some special jurisdictions. However, the reason they are called offshore companies is because their business should be conduct only outside the registrar jurisdiction.

Office Space:

It is a must for all Freezone companies to have a physical office, or at least a virtual office. On the other hand, it is not necessary for offshore company to have a physical office space in the UAE.

Visas

An offshore company is not entitle to employment or residence visas to employees or shareholder. Yet freezone businesses can do so freely, because they are UAE-based companies.

Business activity

Offshore companies are restrict from carrying out business activities in the UAE, but are free to do business or to sell their good or service in another country. However, freezone businesses are force to do business activities (manufacture and sale) within their respect freezone. However, they can sell their goods and services outside their freezone (local and international), with a local distributor. Like a business locate in Ajman Media City Freezone.

Privacy

Freezone businesses are require to provide information about their company to the general public, upon request. This, however, is not the case with offshore companies.this companies have the luxury to keep the identify of their owner, shareholders and directors private.

Taxes

While both freezone businesses and offshore company are exempt from paying taxes, this does not apply to VAT. Offshore companies are exempt from this. However, only the designate freezones are VAT free. In other words, not all freezone businesses are exempt form VAT.

Capital

Freezone businesses require an average amount of capital (not paid-up capital), but that is not the case with offshore company, which require very little capital. This is because offshore company will not exactly set operations or lay down roots in the region. However, freezone businesses do need to set up their office and carry out all their business-relate activities, which is why they need more initial capital, whether they are establishing a business in Ajman Media City Freezone, or anywhere else.

Both offshore businesses and freezone businesses enjoy 100% foreign ownership of their firms, which is by far one of the few similarities the two have. Regardless, offshore businesses and freezone businesses are both different from one another.

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Although, UAE has comparatively more relaxed rules when it comes to business, to attract foreign investment in the country. Nonetheless there is a set of requirements that needs to be fulfilled to establish a business. A lot of start ups are springing up in Ajman Media City Freezone which will have to follow the regulations not only in the country’s laws, but also those set forth by the freezone authority. This involves a lot of important decisions and extensive paperwork.

Procuring a license in UAE for any sort of business or trade activity, whether it is to open a coffee shop, a branch of an international bank, or an eCommerce store, is perhaps the most difficult step in establishing a business. Licenses in the UAE are issued on the basis of the type of company (LLC, joint venture, etc.) and the location of the office (i.e. mainland like on Burj Khalifa or freezone like Ajman Media City Freezone). In some cases, a license cannot be secured if there isn’t a local sponsor.

Regulations for Businesses on the Mainland

UAE Federal Law No. 2 of 2015 on Commercial Companies covers all economic entity which practices any commercial, industrial, financial, real estate, agricultural or any other kind of economic activity taking place on the mainland except:

• Companies that are excluded in the UAE Cabinet’s resolution
• Companies owned by local or federal governments
• Companies operating in the gas, power and oil sectors, 25% of the ownership of which is geld by the local or federal government

Regulations for Freezone Companies In UAE

The governance of such businesses falls under the free zone authority in and in some cases by some other government entity. Also, laws that are specific to the nature of your business might further affect your business activity.

Laws applicable to Freezone businesses

All general business/commercial laws, except for Federal Law No. 2 of 2015, which focuses on Commercial Companies in uae Law.

Other laws that might affect such businesses are those that are specific to your business activity such as QHSE compliance, property rights and freezone authority regulations.

Policies and laws for online businesses

Laws

• Federal Law No. 1 of 2006 of Electronic Commerce and Transactions
• Federal Law No. 5 of 2012 on Combatting Cybercrimes and its amendment by the Federal Law No. 12 of 2016
• Federal Decree Law No. 2 of 2015 on Combating Discrimination and Hatred
• UAE Cyber Law

Policies

• Internet Access Management – Regulatory Policy – TRA
• Internet guidelines
• UAE official advertising guide
• The UAE Social Media White Papers – TRA
• Internet media regulations

Laws for all businesses

General

• Electronic Transactions and Commerce Law
• Commercial Transactions Law
• The Federal Law No. 4 of 1979 on Combating Commercial Fraud

• Federal Law No 20 of 2016 on the mortgage of movable property to secure debt

• Business laws in the UAE – Abu Dhabi government portal
• Business offences law – Abu Dhabi government portal
• Common Customs Law of the GCC States
• Guidelines, specifications, laws and manuals for tenders – the official portal of Abu Dhabi Government
• Protection of Intellectual Property – Abu Dhabi government portal
• UAE Trademark Law – Abu Dhabi government portal
• Emirates Securities & Commodities Authority and Market Law – Abu Dhabi government portal
• Electronic Transactions and Commerce Law – Abu Dhabi government portal

Laws for recruitment and employment

• The UAE Labour Law – Ministry of Human Resources and Emiratisation
• Ministerial Decree 764 of 2015: Standard Employment Contracts
• Minister of Labour’s Decree 765 of 2015 on conditions and rules for the termination of employment relations
• Ministerial Decree 766 of 2015 on the conditions and rules for granting a permit to a worker for employment with a new employer
• Resolutions and circulars – Ministry of Human Resources and Emiratisation
• Emiratisation Laws – Ministry of Human Resources and Emiratisation
• International agreements – Ministry of Human Resources and Emiratisation

Free trade agreements – Ministry of Economy

• Free trade agreements GCC EFTA FATA
• Free trade agreement GCC-Singapore FTA (GSFTA)

Central Bank of the UAE

• Laws related to anti-Money laundering and suspicious cases Unit – AMLSCU
• Laws of Islamic banks
• Major selected notices and circulars issued by UAE Central Bank to all other banks and financial institutions

Laws for private security companies – Ministry of Interior

• Federal Law No. 37 of 2006 concerning private security companies
• Cabinet Resolution No. 33 of 2008 regarding the application licensing fees for private security companies
• Ministerial Resolution No. 557 of 2008 abo the executive regulations of private security companies law

Laws from Securities and Commodities Authority

• Federal Law No. 4 of 2000 about the Emirates Securities & Commodities Authority and market
• Decision No. 13 of 2000 about the regulations regarding the functioning of the Securities and Commodities Authority

Safety, health, and environment regulations

• Mid-day break rule – Ministry of Human Resources and Emiratisation
• International agreements – Ministry of Human Resources and Emiratisation
• Laws and legislations – Ministry of Climate Change and Environment
• Rules and regulations – Federal Authority for Nuclear Regulation
• Environment laws – Environment Agency, Abu Dhabi

 Taxation laws:

• Federal Decree Law No. 7 of 2017 on Excise Tax
• Federal Decree-Law No. (8) of 2017 on Value Added Tax
• Federal Law by Decree No. 13 of 2016 regarding the establishment of the Federal Tax Authority

These laws are what govern all businesses established in the UAE, be it somewhere like Ajman Media City Free Zone where the laws are lenient for businesses, or on the mainland.

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