Mainland or free zone: how to choose
Where you register your company decides who you can sell to, what office you need and how many visas you can get. Here is how the options compare.
Two ways to set up a company in the UAE
A mainland company is licensed by the government of an emirate, such as the Department of Economy and Tourism in Dubai. A free zone company is licensed by a free zone authority, which runs a designated business area with its own rules.
Both let you own 100% of your company in most cases, and both can sponsor residence visas. The real differences are where you can trade, what office you need and how tax applies. The table below sets them side by side.
| Topic | Mainland | Free zone |
|---|---|---|
| Ownership | 100% foreign ownership for most activities since 2021. A few activities have specific conditions. | 100% foreign ownership. |
| Where you can trade | Anywhere in the UAE, directly with any customer, and internationally. | Within the free zone and internationally. Selling directly to UAE mainland customers usually needs a distributor, a mainland branch or a specific permit. |
| Office requirement | A physical office with a registered tenancy contract (Ejari in Dubai) is generally required. | Flexi-desk and shared office options are common. Larger offices or warehouses are available as you grow. |
| Visas | Visa quota is usually linked to office size. Work permits go through MOHRE. | Visa allocation depends on your package and office. Visas are processed through the free zone. |
| Corporate tax | 9% on taxable income above AED 375,000, from June 2023. | The same rules apply, but a qualifying free zone company may pay 0% on qualifying income if it meets the conditions. |
| Government contracts | Can bid for government contracts. | Generally not eligible directly. A mainland company or branch is usually needed. |
| Cost structure | Licence fees plus an office lease and any extra approvals. Usually higher running costs. | Packages often bundle the licence, a desk and a visa allocation. Usually a lower starting cost, varying by zone. |
| Setup speed | Usually longer, especially when another authority must approve the activity. | Often a few working days once documents are complete. |
General guidance only. Rules differ by free zone and activity, and fees, packages and visa quotas change often; we confirm current figures in your consultation.
How to choose
Five questions settle most decisions. Answer them before you compare prices.
- Who are your customers?
- If you will sell directly to shops, consumers or companies inside the UAE, a mainland company usually fits. If most clients are abroad, or are other free zone companies, a free zone is often simpler.
- Do you need a physical office, shop or warehouse?
- A mainland company generally needs a real office. A free zone lets you start with a flexi-desk. If you need storage or manufacturing space, look at zones with warehouses and industrial land.
- How many visas will you need, now and in two years?
- Visa allocation is tied to your office or package. Plan for the team you expect, not only the team you have, so you are not forced to move early.
- Is your activity regulated?
- Financial services, virtual assets, healthcare, education and food businesses need approval from a specific authority. This can narrow your choice of jurisdiction before cost comes into it.
- Does a Dubai address matter to your clients or bank?
- Free zones in Sharjah and Ras Al Khaimah work well for many businesses. If your clients or partners expect a Dubai address, choose a Dubai free zone or the mainland.
Jurisdiction guides
What each option is good for, the trade-offs, and the questions founders ask us most.
- Dubai MainlandDubaiAn onshore company licensed by Dubai's Department of Economy and Tourism, able to trade directly anywhere in the UAE.
- IFZADubaiA Dubai free zone in the Dubai Silicon Oasis area, popular with consultancies and small businesses for its broad activity list and flexible office options.
- DMCCDubaiA Government of Dubai free zone in Jumeirah Lakes Towers, known for commodities trading, a wide range of services and a crypto and Web3 community.
- Meydan Free ZoneDubaiA Dubai free zone at Meydan in Nad Al Sheba, with a largely digital setup process and a wide range of activities.
- SPC Free ZoneSharjahA Sharjah free zone that began as a hub for publishing and media and now licenses a broad range of business activities.
- RAKEZRas Al KhaimahRas Al Khaimah's economic zone, offering industrial land and warehouses as well as business licences for trading and services.
Guides on choosing a jurisdiction
Comparisons, package costs and what free zone companies can do on the mainland.
- Free zone vs mainland: which is right for your business?How free zone and mainland companies in Dubai differ on ownership, where you can trade, office space, visas and corporate tax, and how to choose.
- Cheap free zone packages: what the headline price leaves outWhy the cheapest free zone package in the UAE is rarely the cheapest company to run: visas, establishment card, office upgrades and renewal prices.
- DMCC vs IFZA: which free zone suits your business?DMCC vs IFZA compared from each zone's own information: who runs them, location, office and visa options, how setup works, banking, tax and who each suits.
- Freelance permits in Dubai and the UAE: your options comparedFreelance visa options in Dubai compared: free zone permits, the MOHRE permit with a Green Visa, when a company fits better, and banking and tax.
- How to choose a UAE free zone: the questions to answer firstWhich free zone is best in the UAE? It depends on your activity, customers, visas, office, bank and tax position. These are the questions to answer first.
- Can a free zone company do business in mainland Dubai?Can a free zone company work with mainland clients? The general rule, the routes that work, Dubai's DET permit for free zone firms and the tax impact.
Common questions
Can a free zone company work with clients on the UAE mainland?
It depends on the activity and the client. Many free zone companies work with mainland clients through a distributor or agent, or set up a mainland branch. In some cases a specific permit is available. We confirm what applies to your activity.
Do free zone companies pay corporate tax?
All UAE companies must register for corporate tax. The standard rate is 9% on taxable income above AED 375,000. A qualifying free zone company may pay 0% on qualifying income if it meets the conditions, which include keeping real substance in the free zone and preparing audited financial statements.
Can I get a residence visa through my company?
Company owners are generally eligible for a UAE residence visa, and you can usually sponsor family if you meet the income requirements. You need a medical fitness test and an Emirates ID. The number of visas depends on your jurisdiction, package and office.
Can I move from a free zone to the mainland later?
Yes, but it usually means registering a new mainland company or branch and moving visas across, rather than a simple transfer. It is worth choosing carefully at the start.
Do I need to be in the UAE to set up?
Much of a free zone setup can usually be done remotely. For a residence visa you need to be in the UAE for the medical test and Emirates ID biometrics, and banks usually want to meet you in person.
Not sure which fits?
Tell us what you sell, who to and how many people you plan to hire. We recommend a jurisdiction and confirm current fees and visa quotas.
Or call +971 52 210 4014 (Mon–Fri, 9 AM – 6 PM)