Free zone vs mainland in Dubai: which one fits you.
Both routes give you a legal UAE company. The difference is where you can trade, what you pay and what you need. Here is how to choose without paying for the wrong licence.
The main differences
| Free zone | Dubai mainland | |
|---|---|---|
| Licence cost | From AED 4,499 | From about AED 12,999 |
| Foreign ownership | 100% allowed | 100% allowed for most activities |
| Trading in the UAE market | Limited without an extra arrangement | Direct, with no restriction |
| Office | Flexi desk or office in the zone | Usually a registered office address in Dubai |
| Residence visas | Based on your package and office | Based on your office size |
| Corporate tax | Registration and filing required; a 0% rate can apply to qualifying income | Registration and filing required; 0% up to AED 375,000, then 9% |
Starting prices are Algomeda package prices, November 2026. Rules depend on the free zone and the activity.
When a free zone fits
- You work with clients abroad or online and do not need to sell face to face in the UAE.
- You run consulting, trading between countries, e-commerce or another service business.
- You want the lowest set-up cost, or a holding or investment company.
- You want a simple set-up with the licence, office and visas in one place.
When mainland fits
- Most of your customers are in the UAE and you want to invoice them directly.
- You need a shop, restaurant, clinic or other business that deals with the public.
- You plan to work with UAE government bodies or large local companies, which often prefer a mainland licence.
- You need a Dubai address and the freedom to operate anywhere in the emirate.
Can a free zone company sell in the UAE?
Free zone companies can usually sell to other free zone companies and abroad. To sell to customers on the mainland they generally need a distributor, or a separate mainland licence, and some free zones offer an option for this. The rules vary by free zone, so check before you choose, not after.
Cost over the first two years
A mainland licence costs more up front, but if you would otherwise need both a free zone licence and a mainland arrangement, the total can come out closer than the headline price suggests. Add the visa, office, banking and renewal cost to both options before you compare.
How to decide
Write down where your customers are, which activity you need, how many visas you want and what office you need. If they are mostly abroad or online, start with free zones. If they are mostly in the UAE, start with the mainland. We then send an itemised quote for the one that fits.
Your questions, answered.
Is a free zone or mainland company better in Dubai?
Neither is better in every case. A free zone is usually cheaper and suits service and international businesses. The mainland suits businesses that sell directly inside the UAE. The right one depends on your customers and activity.
Which is cheaper, free zone or mainland?
A free zone is cheaper to start, from AED 4,499 against about AED 12,999 for a Dubai mainland licence. Compare the full first-year cost, including visas, office and renewal.
Can I own 100% of a company in both?
In a free zone, yes. On the mainland, 100% foreign ownership is allowed for most activities, though some activities still have conditions. We check yours.
Can a free zone company work with UAE customers?
Often through a distributor or an extra licence, but not directly in the same way as a mainland company. The rules differ by free zone, so confirm them first.
Do both need corporate tax registration?
Yes. Both must register for UAE corporate tax and file a return. Free zone companies may qualify for a 0% rate on qualifying income if they meet the conditions.
Can I move from a free zone to the mainland later?
Yes, but it usually means a new mainland licence and new visas, so it is cheaper to choose correctly at the start.
Not sure which route fits?
A 15-minute intake call. Tell us your plan and we tell you which one makes sense.