# Mainland or free zone: choosing where to set up your UAE company

> How a mainland company and a free zone company differ in ownership, where they can trade, offices, visas and tax, and how to choose the right one for your business.

- Section: Business › Business setup
- Last updated: 2026-10-02
- Source: https://nuzan.ai/en/knowledge/mainland-vs-free-zone-company

## Overview

Every UAE company is licensed either on the **mainland**, by the economic department of an emirate, or in one of the country's **free zones**, each run by its own authority. The choice decides where you can sell, what office you need and how many visas you can get.

## How they compare

| | Mainland | Free zone |
| - | - | - |
| Licensing authority | The emirate's economic department (for example Dubai's Department of Economy and Tourism) | The free zone authority |
| Foreign ownership | Up to 100% for most activities | 100% |
| Where you can trade | Anywhere in the UAE and abroad | Inside the zone and abroad; selling into the mainland usually needs a local distributor or an extra permit |
| Office | A physical office or approved space in the emirate | Flexi-desk, shared or dedicated office in the zone |
| Government contracts | Eligible | Generally not eligible |
| Corporate tax | 9% above AED 375,000 of taxable income | The same, with 0% on qualifying income for a Qualifying Free Zone Person |

## Requirements

Both routes need a chosen business activity, a trade name, shareholder passports and, for residents, Emirates IDs. Some activities also need approval from a regulator, such as the Central Bank for financial services.

## Costs

Costs depend on the activity, the authority, the office and the number of visas. Free zones often sell packages that combine the licence, a flexi-desk and a set number of visas. Ask the authority for its current fee schedule before you commit.

## Timeline

A free zone licence can be issued within days once documents are complete. A mainland licence takes longer when an activity needs external approval.

## Recommended next step

List the customers you will serve. If most of them are in the UAE market, start with the mainland; if you trade internationally or serve other free zone companies, compare two or three free zones that license your activity.

## Frequently asked questions

### Can a free zone company sell to customers on the mainland?

Usually not directly. Most free zone companies sell into the mainland through a licensed local distributor, or obtain a permit or a mainland branch where the free zone and the emirate allow it.

### Do I need a local partner for a mainland company?

Not for most activities. Since 2021 foreign investors can own up to 100% of a mainland company, except in a short list of activities of strategic importance.

Arabic version: https://nuzan.ai/ar/knowledge/mainland-vs-free-zone-company