When thinking about company formation in the heart of Dubai, there are two of the most sought-after free zones: DMCC (Dubai Multi Commodities Centre) and DIFC (Dubai International Financial Centre). Both are known globally as benchmarks of excellence.
Like other free zones, the DMCC and DIFC Free Zones,haveis much to offer – tax exemptions, world-class infrastructure, vibrant community, and a great strategic location for doing business in Dubai. However, the difference between DMCC and DIFC Free Zones is the focus they offer, which contributes to the cost structure and legal framework.
In this guide, you will learn in detail about each zone to make an informed decision that finally satisfies your business setup. Let’s continue to read:
What Is a DMCC Free Zone In Dubai, UAE?
Dubai Multi Commodities Centre-based was established in 2002 by the government of Dubai to support the world commodities trade. Today, it’s a global hub for trade of over 22,000 businesses from different industries. The DMCC is based in the dynamic Jumeirah Lakes Towers (JLT) area, where you can find a perfect business landscape for trading, logistics and operations.
The following are the features that DMCC provides:
- Wide Industry Reach: Nowadays, DMCC has focused on state-of-the-art technology, e-commerce and a range of industries, making it one of the best choices for startups.
- Flexibility for Small and Large Businesses: From multinational corporations to startups, DMCC offers a range of licensing and office options for business development.
What Is a DIFC Free Zone In Dubai, UAE?
Dubai International Financial Centre is a leading financial hub in the region of Dubai. Free zones in the UAE were launched in 2004 to make it a global financial hub. Dubai free zones have independent legal systems based on English common law, world-class infrastructures, and high-profile locations.
The following are the features of DIFC free zone in Dubai:
- Focus on Finance and Fintech: The DIFC is designed for financial institutions, insurance companies, fintech startups and professional financial services firms.
- Access to Global Markets: The industries free trade zones serve are attracted by its business-friendly environment and legal framework.
- Premium Office Spaces: The most prestigious office towers and coworking spaces are within the UAE’s free zones.
DMCC vs DIFC Comparison: Choosing the Right Free Zone
The difference between DMCC and DIFC free zones is their targeted industries, legal system, license cost, and target audience. While DIFC works best for financial institutions and fintech startups, DMCC is preferred for trading, logistics and tech-focused business needs.
Let’s discuss the differences in detail:
- Legal Frameworks
One of the critical differences between DMCC and DIFC is their legal structure:
- DMCC Legal Framework: Dubai’s federal laws under which businesses in DMCC function are simple and easy. DMCC, therefore, makes a great destination to set up a company or multiple range of businesses in Dubai.
- DIFC Legal Framework: English common law makes up the legal and regulatory framework of DIFC, independent of the UAE. However, one of the key features of such a system is that it comes with an internationally recognised structure that largely attracts financial institutions and global investors.
This makes a difference in what most, but not all, businesses prefer. In contrast, DMCC is known for its flexibility, and DIFC is known for its sophisticated legal setup.
- License and Cost Comparison
Another large component that you must consider while setting up a business is the licensing costs and fees.
DMCC Licensing Costs
The cost-effective licensing solutions make DMCC a top destination to start a business. The business activity entails additional costs such as visa and office requirements, which also determine the licensing fees.
DIFC Licensing Costs
Licensing in DIFC is considerably pricier than DMCC as it is located in the heart of Dubai and is known for its premium financial hub positioning. Companies within the free zone must be prepared for higher operational costs beyond premium office leases.
- Strategic Location
Both DMCC and DIFC are located in strategic areas and close to the many countries where they provide a wide range of services:
DMCC Location
In Jumeirah Lakes Towers (JLT), a buzzing community, DMCC is close to the Dubai Metro and easily accessible. It also sits on top of residential and commercial properties, which are convenient for employees and business owners.
DIFC Location
DIFC is a financial hub in the middle east that is positioned in the centre of Dubai, close to famous landmarks such as Burj Khalifa and Dubai Mall. In turn, this central positioning is ideal for free zone companies always interacting with top clients and investors.
- Office Space and Infrastructure Offers
When it comes to office space, the needs of businesses can vary greatly, and both DMCC and DIFC cater to these requirements differently:
DMCC Office Solutions
DMCC has shared desks, private offices and coworking spaces available. This makes it an ideal place for startups and SMEs who prefer affordable office solutions.
DIFC Office Solutions
DIFC free zones provide luxurious office spaces throughout state of art towers. If you’re a multinational corporation’s financial professionals, you find these offices equipped to align with your business goals and working needs.
- Networking Opportunities and Community
Both free zones offer excellent networking opportunities, though their focus differs:
Networking at DMCC
DMCC organises continuous trade fairs and industry-specific activities such as the Dubai Diamond Exchange and the DMCC Coffee Centre. On these platforms, businesses can interact with world giants in commodities and trading.
Networking at DIFC
DIFC free zone authority holds high-level conferences, fintech forums and financial industry meetups. Banking leaders, investors and policymakers collaborate or partner on these events.
- Business Owner Tax Benefits
Both DMCC and DIFC offer attractive tax benefits, but there are slight variations in terms of ownership and other incentives:
DMCC
- Offers 100 percent foreign ownership
- No corporate or personal income taxes
- No duty on imports or exports
- Simple mechanisms for the repatriation of profit.
DIFC
- Similar tax benefits as DMCC in addition
- Foreign Exchange without limitations
- A strong framework for world financial transactions
- Residence Visas and Employee Support
Both DMCC and DIFC provide residency visas for business owners and employees, but their processes vary slightly:
DMCC Residency Visa
The residence visas of their employees are easily applied for by businesses in DMCC. The cost-effective visa packages support startups and SMEs in the zone.
DIFC Residency Visa
The visa process is more formal in DIFC free zones for business because it’s aimed toward financial institutions. However, it is focused on easing global professionals relocating to Dubai.
Final Words
Both free zones are known for their world-class benefits, whether you choose DMCC for its cost-effective flexibility or to get prestige status in the financial sector in DIFC. Ultimately, the difference Between DMCC and DIFC Free Zones comes down to which industry you are in, your business operations needs, and your long-term business goals.
At Xpert Advisory, we help you make the right choice in choosing the right free zone for your business. We help you achieve your industry needs, operational requirements and long-term objectives. Contact us today for expert advice that’s specific to your business ambitions and pave the way towards your success!
FAQs
Is DIFC Tax Free?
Businesses operating in the DIFC Free Zone are subject to a zero percent corporate tax rate on the income defined by the relevant corporate tax cabinet and ministerial decisions.
Does DIFC Have a Metro?
There are two metro stations on the Red Line which serve DIFC, Emirates Tower station and Financial Centre station.
Can You Live In DIFC?
If you invest in DIFC Living, you become eligible for a 2 years residence visa or a 10 years Golden visa depending on the acquisition sum. The benefit of these visas is that you can apply for a spouse and children, which allows everyone you love to be able to live there at the same highest standards.
