When starting a business in Dubai, one of the most important decisions you must make is whether to form a Free Zone company or a Mainland (LLC) company. Both come with their own advantages depending on your business goals.
This guide breaks down the key differences to help you make the best choice.
1. Ownership Structure
Free Zone Company
- 100% foreign ownership
- No UAE national needed
- Ideal for expatriates and international entrepreneurs
Mainland Company
- Some activities may require a UAE national
- Full access to Dubai and UAE market
2. Business Activities & Market Access
Free Zone
- Allowed to operate within the Free Zone and internationally
- Cannot trade directly in the UAE mainland without a local distributor
Mainland
- Can operate anywhere in the UAE without restrictions
- Perfect for retail, restaurants, trading companies, and service providers targeting Dubai customers
3. Taxation
Free Zone
- 0% corporate tax for qualifying income
- No import/export duties
- Lower ongoing costs
Mainland
- Subject to UAE corporate tax based on activity and income
- VAT applies normally
Learn about Corporate Tax Filing in Dubai.
4. Cost of Setup
Free Zone Company
- Lower setup fees
- Flexi-desk and shared office options
- Cheaper visa quotas
Mainland Company
- Higher licensing costs
- Office tenancy often mandatory
- Ideal for those needing a physical presence
5. Licensing & Office Requirements
Free Zone
- No mandatory office for some zones
- Quick digital processing
Mainland
- Physical office required
- More compliance steps
- Wider approval requirements
Which One Should You Choose?
Choose Free Zone if you:
✔ Want 100% ownership
✔ Trade internationally
✔ Want lower setup costs
✔ Need fast setup
Choose Mainland if you:
✔ Want to trade anywhere in UAE
✔ Run a customer-facing business
✔ Need unlimited visa quotas
✔ Want more business flexibility
Final Thoughts
Both Free Zone and Mainland setups are excellent options depending on your business model. Dubai provides strong support to entrepreneurs in both sectors. Explore how Profits Plus can assist you here:
Business Setup in Dubai
