UAE Mainland vs Free Zone Company
The choice between mainland and free zone depends on your target market. If you need to sell directly to UAE consumers, pursue government contracts, or open retail locations, mainland is usually the right choice. Free zones excel for international trade, e-commerce, consulting, and businesses that don't need direct UAE market access. Many companies eventually set up in both jurisdictions as they grow.
| Dimension | Mainland | Free Zone |
|---|---|---|
| Foreign Ownership | 100% allowed (since 2021 Commercial Companies Law amendment) | 100% foreign ownership — always been the default |
| Market Access | Can trade freely anywhere in the UAE — no restrictions on local market | Primarily for international trade; selling into UAE mainland may require a distributor or dual licence |
| Office Requirement | Physical office with Ejari lease required (co-working spaces accepted) | Flexi-desk, shared, or dedicated office within the free zone |
| Licence Cost (typical) | AED 15,000–50,000+ depending on activities | AED 7,500–50,000 depending on free zone and package |
| Government Contracts | Eligible to bid on UAE government contracts | Generally not eligible for government tenders directly |
| Visa Allocation | Based on office space size (approx. 1 visa per 9 sqm) | Fixed allocation based on package (1–6+ visas) |
| Corporate Tax | 9% on profits above AED 375,000 | 9% applies (free zone companies may qualify for 0% on qualifying income) |
| Setup Speed | 5–15 business days (varies by activity) | 2–10 business days (most free zones are faster) |
| Legal Framework | UAE Federal Law (Civil Law) | Free zone regulations (some use Common Law, e.g. DIFC, ADGM) |
| Best For | Companies targeting UAE consumers, government contracts, retail, or F&B | International businesses, e-commerce, consulting, tech, and holding companies |
Foreign Ownership
Mainland
100% allowed (since 2021 Commercial Companies Law amendment)
Free Zone
100% foreign ownership — always been the default
Market Access
Mainland
Can trade freely anywhere in the UAE — no restrictions on local market
Free Zone
Primarily for international trade; selling into UAE mainland may require a distributor or dual licence
Office Requirement
Mainland
Physical office with Ejari lease required (co-working spaces accepted)
Free Zone
Flexi-desk, shared, or dedicated office within the free zone
Licence Cost (typical)
Mainland
AED 15,000–50,000+ depending on activities
Free Zone
AED 7,500–50,000 depending on free zone and package
Government Contracts
Mainland
Eligible to bid on UAE government contracts
Free Zone
Generally not eligible for government tenders directly
Visa Allocation
Mainland
Based on office space size (approx. 1 visa per 9 sqm)
Free Zone
Fixed allocation based on package (1–6+ visas)
Corporate Tax
Mainland
9% on profits above AED 375,000
Free Zone
9% applies (free zone companies may qualify for 0% on qualifying income)
Setup Speed
Mainland
5–15 business days (varies by activity)
Free Zone
2–10 business days (most free zones are faster)
Legal Framework
Mainland
UAE Federal Law (Civil Law)
Free Zone
Free zone regulations (some use Common Law, e.g. DIFC, ADGM)
Best For
Mainland
Companies targeting UAE consumers, government contracts, retail, or F&B
Free Zone
International businesses, e-commerce, consulting, tech, and holding companies
Frequently Asked Questions
Can a free zone company sell to UAE customers?
Is 100% foreign ownership really possible on the mainland now?
Which is cheaper to set up?
Can I switch from free zone to mainland later?
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