Mainland vs free zone in the UAE
The choice mostly depends on where your customers are. A mainland company can trade anywhere in the UAE. A free zone company suits clients abroad and costs less to start. The table and the four questions below cover the rest.
| Mainland | Free zone | |
|---|---|---|
| Market access | Anywhere in the UAE and abroad | Inside the zone and abroad; mainland sales through a distributor, a branch or a dual licence |
| Foreign ownership | 100% for most activities since 2021 | 100% |
| Corporate tax | 0% up to AED 375,000, 9% above | Qualifying Free Zone Person: 0% on qualifying income, 9% on the rest. Without QFZP status, the same as mainland |
| Office | Registered lease required (Ejari in Dubai) | Often not required on entry packages (flexi‑desk) |
| Visa quota | Depends on the office size | Set by the package or the office; differs by zone |
| Government customers | Can bid for government tenders | Generally not |
| Typical first year | About AED 25,000–40,000 with a small office | About AED 13,000–15,000 in a budget zone, AED 20,000–24,000 in a Dubai zone (one visa) |
Four questions to decide
Do you sell to consumers or companies in the UAE?
Choose the mainland. A free zone company generally cannot trade directly with customers on the mainland, and the workarounds (a local distributor, a branch or a dual licence) usually cost more than the difference in licence fees.
Do you sell abroad: services, e-commerce, consulting?
A free zone usually fits. Ownership is 100%, the entry cost is lower, and a Qualifying Free Zone Person pays 0% on qualifying income as long as it keeps real substance in the zone.
Do you need government tenders or a shop open to the public?
Choose the mainland. Government tenders and most retail premises require a mainland licence.
Do you mostly need residence visas and a holding company?
A free zone usually fits. Before choosing a zone by its name, compare the visa allocation and the cost per visa in the Free Zone Index.
This is general information on UAE rules. It is not legal, tax or immigration advice for your situation. Rules and government fees change; we confirm the position for your facts in writing before you act.