The side-by-side
| Factor | Free zone | Mainland |
|---|---|---|
| Published starting scenario | licence-only from AED 4,888 | typically AED 15,000–25,000+ once office and approvals are scoped |
| Foreign ownership | 100%, always | 100% for most activities (since 2021); some strategic activities excluded |
| Office requirement | None — flexi-desk included in most packages | Mandatory physical office/Ejari, drives the cost |
| UAE onshore market access | Via a local distributor or by opening a branch | Direct — sell anywhere in the UAE |
| Government contracts | Generally not eligible | Eligible |
| Visa capacity | Package-based (0–10+ visas) | Tied to office size (~1 visa per 9 sqm) |
| Corporate tax | Standard 0%/9% bands; a QFZP is 0% on qualifying income and 9% on taxable income that is not qualifying | Standard 0% up to AED 375k, then 9% |
| Setup speed | 3–8 working days, fully remote | 1–3 weeks; office lease needed first |
Choose a free zone if…
Your clients are abroad, online, or other businesses; you want the lowest published entry scenario (licence-only from AED 4,888); you need visas without renting an office; or you want to start remotely this week. This covers most consultants, e-commerce sellers, freelancers, agencies and holding setups.
Choose mainland if…
You are opening a shop, restaurant, clinic or any walk-in premises; you will sell directly to UAE consumers or supply onshore companies at scale; or you plan to bid for government work. The office requirement is the real cost driver — budget for rent before the licence.
The hybrid route most people miss
Many founders start in a free zone for the cheap licence and visas, then add a mainland branch or distributor once onshore revenue justifies it. The reverse (downgrading mainland to free zone) is messier — starting lean is usually the smarter sequence.
Common questions
Should I choose mainland or a free zone?
Free zone if you serve clients remotely, online or internationally. Mainland if you need direct onshore trade, a physical premises, or government contracts.
Can foreigners own 100% of a mainland company?
Yes, for most commercial and industrial activities since the 2021 reform. A short strategic list still requires Emirati participation. Free zones have always been 100%.
Is the corporate tax different?
A standard Taxable Person is 0% up to AED 375,000 of taxable income and 9% above it. A QFZP follows a separate path: 0% on qualifying income and 9% on taxable income that is not qualifying, without the AED 375,000 standard band. Qualification is fact-specific; geography alone does not decide it. See our free-zone corporate tax guide.
Can a free-zone company sell in the UAE mainland?
Indirectly — through a registered distributor, or by opening a mainland branch later. Some zones also offer dual-licence arrangements with their emirate.
Decided on a free zone? Compare published scenarios.
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