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Switching from Freezone to Mainland issues

MillionCents

Mentor Group Gold Premium
Aug 22, 2024
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I currently own a freezone company in Dubai but am planning to expand with employees and office space. To achieve this, transitioning to a mainland company is necessary. After extensive discussions with my freezone authority, including visits and multiple phone calls, I’ve confirmed that it's not possible to switch my existing freezone company to a mainland entity.

As a result, I plan to establish a mainland company and have my clients transfer payments to the new mainland bank account. This will lead to the cessation of income in the freezone account, as I will no longer engage in business activities there, with the eventual goal of liquidating the freezone company. However, the freezone bank account holds a low seven-figure amount (AED), and I’m exploring the best way to handle these funds.

Would selling the company and receiving the funds in my personal account be a viable and legal option? What are the alternatives? Ideally, I could transfer the funds directly from the freezone account to the mainland account, but this may create complications with bookkeeping and auditing. What are your thoughts?