Starting a business in Dubai? One of the first things you’ll need to decide is where to set it up: Mainland or Free Zone. Both options are great, but they work in different ways. Your choice will depend on how and where you want to run your business.
Let’s break it down in a super simple way.
What Is a Mainland Company?
A Mainland company is registered with the Dubai Department of Economic Development (DED). This means you can do business anywhere in the UAE, onshore, offshore, or with government bodies.
Key Benefits:
- No business location limits – Work all across the UAE
- Can work with UAE government clients
- Can open branches anywhere in the country
- No limit on visas (based on office size)
A Mainland company is perfect if you want to open a shop, offer services to local clients, or grow big in the UAE.
What Is a Free Zone Company?
A Free Zone company is set up in a special area known as a Free Zone. These areas are made to support certain types of businesses like tech, media, trade, or logistics.
Each Free Zone has its own rules, but most of them offer:
Key Benefits:
- 100% foreign ownership (no local partner needed)
- No import/export tax within the Free Zone
- Quick setup and lower costs
- Special support for startups
Free Zone companies usually can’t work directly with the UAE mainland market unless they use a local agent or distributor.
Mainland vs Free Zone: Easy Comparison
Here’s a quick side-by-side look at the key differences:
| Feature | Mainland | Free Zone |
|---|---|---|
| Ownership | Up to 100% foreign (in most cases) | 100% foreign allowed |
| Work Area | Anywhere in UAE & beyond | Inside Free Zone only (or via agent) |
| Clients | Local + International | Mainly international or Free Zone |
| Government Work | Allowed | Not allowed directly |
| Office Space | Must rent physical space | Shared desks or virtual options |
| Visa Limit | Based on office size | Limited (but can be upgraded) |
| Startup Costs | Slightly higher | More budget-friendly |
| Flexibility | High (can grow fast) | Great for focused small businesses |
Which One Is Right for You?
It depends on your goals.
- If you want to open a store, work with UAE clients, or take government contracts, the Mainland is better.
- If you’re a freelancer, small trader, or want to test the waters, a Free Zone setup is easier and cheaper.
Still not sure? That’s okay! Keep reading.
What About Taxes?
Good news. The UAE has no personal income tax. But there are some things to keep in mind:
- Corporate tax: 9% applies to profits above AED 375,000 (both Free Zone and Mainland)
- Free Zones may offer tax relief if you only trade inside the zone or outside the UAE
Smart Zone can help you understand how this works for your business.
Can I Switch Later?
Yes, you can. You’re not stuck with your first choice forever.
- Some Free Zones let you upgrade or shift to Mainland later
- Mainland companies can open Free Zone branches and vice versa
Just remember, switching can cost money and take time—so it’s smart to pick the right setup from the start.
How Smart Zone Can Help
Feeling confused? Don’t worry, we’ve helped thousands of business owners pick the best setup.
At Smart Zone, we:
- Listen to your business idea
- Help you pick Mainland or Free Zone
- Handle all the paperwork for you
- Make sure your setup is fast, smooth, and budget-friendly
Call +971 58 541 7444 or book your FREE call today.
We’ll help you set up your dream business in Dubai the easy way.
