Mainland vs Free Zone Business Setup in UAE: What’s Best for You?

Setting up a business in the UAE? One of the first decisions you’ll face is choosing between a Mainland and Free Zone company setup. Both have unique benefits but the right one depends on your goals, operations, and budget.

In this Guide, we’ll break down the key differences, costs, visa options, and help you decide which structure fits your business best in 2025.

What is a Mainland Business Setup?

A Mainland company is licensed by the Department of Economic Development (DED) and allows you to operate anywhere in the UAE without restriction.

Key benefits:

• 100% foreign ownership (no local sponsor required for most activities)
• Can do business across UAE and with government clients
• Unlimited visas (depending on office size)
• Ideal for retail, contracting, logistics, hospitality, and B2B services

What is a Free Zone Business Setup?

A Free Zone company is registered in one of the UAE’s designated economic zones. It’s popular for startups, freelancers, and e-commerce businesses.

Key benefits:

• Fast, cost-effective setup
• 100% foreign ownership
• No corporate tax (in compliant Free Zones)
• Ideal for online businesses, consulting, design, and international trade

Mainland vs Free Zone: Key Differences

Here’s a quick comparison of Free Zone and Mainland setups in the UAE:

Feature	Mainland Company	Free Zone Company
Ownership	100% foreign ownership (most cases)	100% foreign ownership
Business Scope	Anywhere in UAE	Within Free Zone or via distributors
Government Projects	Eligible	Not eligible
Visa Eligibility	Unlimited (based on office size)	Limited (depends on Free Zone)
Office Requirement	Physical office required	Flexi-desk available in some zones
Approval Authorities	DED + other government departments	Free Zone Authority only
Setup Speed	5–10 working days	2–5 working days
Setup Cost (Starting)	AED 15,000+	AED 5,750+

Which One Should You Choose?

Ask yourself these questions:

• Do you want to operate across the UAE? → Choose Mainland
• Do you want the fastest, cheapest setup? → Choose Free Zone
• Planning to work with government entities? → Go for Mainland
• Starting solo as a consultant or designer? → Free Zone is great

Still unsure? Book a free consultation and we’ll guide you based on your business activity, goals, and budget.

Cost Breakdown: Mainland vs Free Zone

Mainland Setup (DED License):

• License: AED 10,000 – AED 20,000+
• Office: AED 8,000 – AED 50,000+
• Visa (Investor): AED 3,500 – AED 5,000

Free Zone Setup:

• License + Flexi Desk: AED 5,750 – AED 15,000
• Visa (if included): AED 3,000 – AED 4,000

Note: Some Free Zones offer zero visa packages for remote or online entrepreneurs.

Frequently Asked Questions

Can I upgrade my Free Zone license to Mainland later?
Yes, but you’ll need to cancel the Free Zone license and apply for a new Mainland license.

Can a Free Zone company sell in Dubai Mainland?
Only through a local distributor or by opening a branch in the Mainland.

Is there a tax difference?
Corporate tax applies if your business income exceeds AED 375,000 — regardless of Mainland or Free Zone (unless your Free Zone qualifies for exemption).