The first decision when setting up in the UAE is where your company is licensed. The two common routes are a mainland licence, issued by the economic department of an emirate, and a free zone licence, issued by a free zone authority. Neither is better for everyone. The right one depends on who your customers are and how you plan to work.
The short answer
- Choose mainland if you want to sell directly to customers across the UAE, bid for local contracts or open shops and offices in the emirate.
- Choose a free zone if you serve international clients, work remotely or operate mainly inside the zone, and want a simpler package.
Side-by-side comparison
| Point | Mainland | Free zone |
|---|---|---|
| Trading in the UAE market | Direct, across the UAE | Usually through a distributor or a separate arrangement, depending on the zone |
| Foreign ownership | Many activities now allow 100% | Commonly 100% |
| Office | Usually required | Flexi-desk, shared or dedicated options |
| Visas | Linked to office size and approvals | Linked to the zone package |
| Government contracts | Generally possible | Often restricted |
| Setup style | Several approvals | Packaged, often faster |
Questions that decide it
Who will you sell to?
If most customers are in the UAE and you invoice them directly, mainland is usually the natural fit. If most customers are overseas, a free zone often works well.
Do you need a physical presence?
Retail, restaurants and many service businesses need premises in the emirate. Consultants, online businesses and trading companies can often work from a flexi-desk.
How many visas do you need?
Both routes give residency visas, but the number depends on your office space and the zone package. Plan your team size before choosing.
Corporate tax in brief
The UAE applies a 9% corporate tax on taxable profit above AED 375,000, with a 0% rate available on qualifying income for qualifying free zone companies. Whether you qualify depends on your activity and structure, so confirm this with your tax adviser.
Can you have both?
Some free zones now offer a dual licence that lets a company trade on the mainland, and some founders set up a free zone company plus a mainland branch. We compare these options with prices so you can decide with numbers.
Read our service pages for mainland company licence and free zone company licence.
This article is general information, not legal or tax advice. Rules, fees and thresholds change, so we confirm current requirements with the licensing authority before you commit.
Talk to our team
Tell us about your plan and we reply with the recommended route, an itemised proposal and the next steps.
