Business Ownership
Free Zone:
- 100% foreign ownership is allowed.
Mainland:
- 100% foreign ownership is permitted for most commercial and professional activities (subject to DED regulations).
Business Scope & Market Access
Free Zone:
- Can operate within the Free Zone
- Can conduct international business
- Direct trading in the UAE mainland requires a local distributor or branch
Mainland:
- Can operate anywhere in the UAE
- Can trade directly with government and private entities
- No geographical restrictions
Office Requirements
Free Zone:
- Flexi-desk or virtual office options available
- Lower initial setup cost
Mainland:
- Physical office or Ejari is mandatory
- Suitable for businesses requiring local presence
- Licensing & Setup Cost
Free Zone:
- Faster setup process
- Lower startup and renewal costs in most cases
- Packages often include visa quotas
Mainland:
- Slightly higher setup cost
- More approvals depending on activity
- Greater operational flexibility
- Visas & Employment
Free Zone:
- Visa eligibility depends on office size and Free Zone rules
- Limited flexibility in increasing visas
Mainland:
- No fixed visa cap (subject to MOHRE rules and office size)
- Easier expansion of workforce
Tax & Compliance
Corporate Tax:
- Both Free Zone and Mainland companies are subject to UAE Corporate Tax
- Qualifying Free Zone Persons may benefit from 0% Corporate Tax on qualifying income (subject to conditions)
VAT:
- VAT registration applies to both if turnover exceeds the threshold
Which Option Is Right for You?
Choose Free Zone if:
- You operate internationally
- You need lower setup costs
- You don’t require direct mainland trading
Choose Mainland if:
- You want full access to the UAE market
- You plan to work with government entities
- You expect rapid local expansion
There is no one-size-fits-all solution. The best structure depends on your business activity, budget, and long-term plans. Seeking professional advice before company setup can help avoid costly changes later.
Not sure whether Free Zone or Mainland is right for your business?
Contact us for consultation to evaluate your activity, tax position, and compliance requirements.
