For users of Dubai FZCOs engaged in ecommerce, have you been able to receive payments from a mainland UAE company without issues?
A business partner says that there will be no issue with paying for an ecommerce service from his mainland company to my client's Dubai FZCO. However I wanted to check this because I thought that this would get my client's Dubai FZCO's bank account frozen. I thought banks check that payments are in line with the FZCO licence and that payments from mainland LLC to FZCO was a red flag for the bank?
Of course a FZCO can receive and send payments to a Mainland Company - and of course the FZCO Business Bank Account DOESN'T get frozen.
I think I need to start some extra Topics to cover this - unbelievable how much confusing information is out there that @discussionor comes to such a conclusion.
I recommend in that particular case to register the FZCO for VAT otherwise you endup paying all the time 5% VAT the Mainland Company has to issue by default.
Thank you for your message @Fred. Am I not correct in thinking that a FZCO cannot sell to a mainland UAE company?
Like here it says that the scope of business is limited to trade within the free zone or international and distinguishes this vs a mainland company which can trade on the mainland. I just picked this as the first search result but many websites say the same thing. Differences Between UAE Mainland vs. Free Zone Company
Just coming back to see if anyone can clarify - why are payments in from a mainland company OK per @Fred's comment but per licence conditions, FZCOs cannot engage in mainland trading without a registered office/local agent?
Were you talking about a non-trade related payment like an equity infusion from a mainland company or something Fred?
