Quick summary

• Mainland companies are permitted to operate freely across the UAE and access government contracts.
• Many Free Zone companies offer faster setup, and cost savings.
• Free zone companies offer 100% foreign ownership in sector-specific zones.
• The mainland is ideal for scalable, UAE-facing businesses; Free Zones suit remote, global, or niche startups.
• Key differences lie in ownership flexibility, visa quotas, office requirements, and client reach.
• The right choice depends on your business goals, budget, and expansion plans.

Dubai business setup: Mainland vs free zone explained

If you’re planning to start a business in Dubai, one of the most important decisions you’ll make is choosing between a Mainland and Free Zone setup. Both offer unique advantages—but the right choice depends on your goals, target market, and operational model.

In this guide, we’ll help you compare Dubai Mainland and Free Zones side-by-side. You’ll learn about the key differences, benefits, costs, and licensing rules, enabling you to decide which option best suits your business vision.

What is a mainland company in Dubai?

A Mainland company is registered with the Dubai Department of Economic Development and Tourism (DED). It allows you to operate freely across the entire UAE and internationally, with no restrictions on location or client type.

Recent reforms now permit 100% foreign ownership in most mainland business activities, eliminating the requirement for a local sponsor.

What Is a free zone company in Dubai?

A Free Zone company is established in a designated economic area, governed by its regulations, offering 100% foreign ownership, tax benefits, and simplified licensing procedures. Dubai has more than 30 Free Zones, each tailored to specific industries, including technology, media, finance, healthcare, and logistics.

Mainland vs Free Zone: A side-by-side comparison

Here’s a quick overview of how Mainland and Free Zone setups compare:

Factor	Mainland	Freezone
Ownership	100% foreign ownership (for most activities)	100% foreign ownership
Business Scope	Anywhere in the UAE + internationally	Within Free Zone or internationally only + UAE subject to certain licensing requirements amended from time to time
Client Access	Can work with UAE government & private sector	Cannot directly deal with UAE mainland clients (without agent)
Office Requirement	Mandatory physical office (Ejari)	Flexi-desk or virtual office allowed
Setup Time	7–10 working days	3–5 working days
License Cost	Moderate to high (depends on activity and office size)	Starting from AED 5,500 (depends on Free Zone)
Visa Quota	Based on office size (no upper limit)	Limited; usually 1–6 visas per package
Regulating Authority	Dubai DET	Individual Free Zone Authority
Flexibility	High (expand, hire, operate anywhere in UAE)	Limited to Free Zone regulations

When to choose a mainland setup

A Mainland license is better suited for businesses that:

• Want to trade directly with UAE clients.
• Plan to open a retail store, restaurant, or office in Dubai.
• Need unlimited employee visas.
• Require government contracts or tenders.
• Want long-term scalability and freedom to expand across the UAE.

Example businesses:

• Consulting firms.
• Construction companies.
• Retail outlets.
• Cafes and restaurants.
• Logistics and transportation providers.

When to choose a free zone setup

A Free Zone license is ideal for businesses that:

• Plan to export goods or services internationally.
• Want low-cost setup options with shared workspaces.
• Don’t need to serve local UAE customers directly.
• Operate primarily online or remotely.
• Require fast and paperless registration.

Example businesses:

• E-commerce startups.
• IT and tech companies.
• Content creators and media firms.
• Freelancers and consultants.
• Import/export businesses.

Business activities allowed

Both setups offer a wide range of business activities, but the Mainland has broader flexibility.

Mainland

• Retail.
• Manufacturing.
• General trading.
• Legal services.
• Health & education.
• Government supply.

Free Zone

• Tech and software.
• Media and content creation.
• Financial consultancy.
• Logistics and warehousing.
• E-commerce.

Note: Some Free Zones are industry-specific, like Dubai Media City or Dubai Healthcare City.

Visa eligibility & office space

• Mainland: The visa quota depends on office size (e.g., one visa per 80 sq. ft.).
• Free Zone: Packages often include 1–6 visas with shared desks or virtual offices

If you plan to scale quickly and hire a large number of employees, Mainland offers more flexibility.

License renewal & compliance

Factor	Mainland	Free Zone
Renewal	Annual	Annual
Ejari Needed	Yes	Often not required
Audit Report	Depends on activity	Not required for small firms
Compliance	Moderate	Simplified

Frequently asked questions (FAQs)

1. Can I convert my Free Zone company to a Mainland company?
Yes, but it involves restructuring, relocation, and new licensing.

2. Can I run an e-commerce business from the Mainland?
Absolutely. Mainland licenses now support e-commerce activities.

3. Do Free Zones and Mainland businesses pay taxes?
Yes. Businesses with profits above AED 375,000 are subject to 9% corporate tax unless exempted.

4. Which is faster to set up — Free Zone or Mainland?
Free Zones are generally faster.

5. Do I need a local sponsor for a Mainland company?
No. Most business activities now allow full foreign ownership.

6. Can I obtain additional visas under the Free Zone?
Visa limits are fixed per package. Mainland allows for unlimited visas, depending on the office size.

7. Which one is better for freelancers?
Free Zones offers packages specifically for freelancers and solo entrepreneurs.

Which one is right for You?

Choose Mainland if:	Choose Free Zone if:
You want to serve UAE clients	You serve international clients
You need unlimited employee visas	You’re starting solo or small
You need a physical office/store	You work remotely or online
You plan long-term UAE expansion	You want a quick, low-cost setup

Let experts help you choose the right setup

Still not sure which setup suits your business best? Let the experts at Kanoony help you assess your goals and select the ideal structure for you.

Book your free consultation today and start your journey the smart way — with clarity, compliance, and confidence.