Mainland or free zone? Setting up a company in the UAE
How the two main routes differ on ownership, where you can trade, visas, office rules and corporate tax.
In short
Free zone companies allow 100% foreign ownership and are quick to set up, but trade mainly inside the free zone or abroad. Mainland companies can trade anywhere in the UAE and now also allow full foreign ownership for most activities.
- Ownership
- 100% foreign (most activities)
- Corporate tax
- 9% above AED 375,000 profit
- Free zone setup
- From approx. AED 12,000–20,000
- Time
- 1–4 weeks
Step by step
Tick each step as you finish it. Open a step to see what to do.
Your licence must list every activity.
Day 1
Documents checklist
Do’s and don’ts
Do
- Register for corporate tax and VAT if required
- Renew the licence yearly
Don’t
- Don’t trade outside your licensed activities
- Don’t miss annual audit requirements
Cost estimator
Untick what doesn't apply to you. These are rough figures and fees change often, so check with the authority.
Watch out
- Banks need substance – a real business plan and local presence – to open accounts.
Common questions
Can a free zone company sell in Dubai?
Usually through a distributor or with a mainland branch/permit.
Official links
Background and more detail
Two routes, one decision
Almost every new UAE company is either a mainland company licensed by the emirate's economic department (Dubai Department of Economy and Tourism, Abu Dhabi ADDED, and so on) or a free zone company licensed by one of the 40+ free zone authorities such as DMCC, IFZA, RAKEZ or Meydan.
Ownership
Since the 2021 amendments to the Commercial Companies Law, most mainland activities allow 100% foreign ownership. A small list of strategic activities still needs a local partner or special approval. Free zones have always allowed full foreign ownership.
Where you can trade
- Mainland: trade anywhere in the UAE, bid for government contracts, open a shop or office anywhere.
- Free zone: trade inside the zone and abroad. Selling directly to customers on the mainland usually needs a local distributor or an additional permit.
Office and visas
Mainland licences require a registered lease (Ejari in Dubai), and your visa quota depends on office size. Many free zones offer flexi-desk packages that include a set number of residence visas, which is why consultants and e-commerce founders often start there.
Tax
Corporate tax is 9% on taxable profit above AED 375,000 for financial years starting on or after 1 June 2023. Qualifying free zone persons can get 0% on qualifying income if they meet substance rules. VAT is 5%, and registration is mandatory above AED 375,000 annual taxable supplies.
Typical steps
- Choose activity codes and jurisdiction
- Reserve a trade name and get initial approval
- Sign the memorandum of association
- Lease an office or desk
- Receive the licence, then the establishment card
- Apply for investor and employee visas
- Open a corporate bank account (allow 2–6 weeks)
Get at least two quotes from licensed setup agents before committing; package prices vary widely for the same result.
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