Dubai Mainland vs Free Zone: Which Should You Choose?
Choosing between mainland vs freezone Dubai? Here's what matters for dubai company registration:
What is a Dubai Mainland Company?
A mainland company (also called onshore or local company) is registered with the Department of Economic Development (DED) and can trade anywhere within the UAE without restrictions. It's the only option for businesses requiring physical retail presence, government contracts, or multiple branches across Emirates.
Key characteristics:
- Trade anywhere in UAE without special permits
- Unlimited visa quota based on office size
- Required physical office (no virtual options)
- Higher banking success (85% vs 65% for free zones)
- Setup time: 7-12 working days
- Minimum cost: AED 28,750 all-inclusive
Best for: Restaurants, retail shops, businesses targeting UAE residents, government contractors, and companies needing multiple UAE locations.
What is a Dubai Free Zone Company?
A free zone company operates within designated economic zones offering special incentives including potential 0% corporate tax (as QFZP), simplified setup, and flexible office options. Dubai has 30+ free zones including established zones like DIFC, DMCC, JAFZA, Meydan Free Zone, and specialized zones for different industries.
Key advantages:
- 3-5 day setup (fastest option)
- Virtual office allowed (from AED 2,500/year)
- 0% corporate tax if qualifying (QFZP status)
- 100% profit repatriation
- No minimum capital in most zones
- Starting from AED 10,890 total cost
Industry specializations:
Commodities trading, e-commerce, technology, healthcare, logistics, media, and general business activities.
New 2025: Free zone companies can now obtain DET permits to trade in mainland Dubai, eliminating previous restrictions.
What is an Offshore Company in Dubai?
An offshore company (also called non-resident company) is designed for international business, asset holding, and tax planning. It cannot trade within the UAE but offers maximum privacy and minimal compliance.
Characteristics:
- No physical office required
- No UAE trading allowed
- Minimal accounting requirements
- High privacy (limited public records)
- From AED 8,900 setup cost
- No visa eligibility typically
Best for: Holding companies, international trading, intellectual property management, asset protection, and businesses not requiring UAE presence.
Which Option Costs Less: Mainland or Free Zone?
| Feature | Free Zone | Mainland | Best For |
|---|---|---|---|
| Setup Cost | AED 12,290 | AED 28,750 | Free Zone wins |
| Setup Time | 3-5 days | 7-12 days | Free Zone wins |
| Renewal Cost | AED 8,500/year | AED 15,000/year | Free Zone wins |
| Office Required | Virtual OK | Physical required | Free Zone wins |
| Banking Success | 65% | 85% | Mainland wins |
| UAE Trading | Restricted * | Unlimited | Mainland wins |
| Visa Quota | Limited | Unlimited | Mainland wins |
| 100% Ownership | Yes | Yes (new law) | Both equal |
*New 2025: Free zone companies can now get DET permits for mainland operations.
What Changed in 2025 for Free Zone Companies?
Free Zone Companies Can Now Access Dubai Mainland (New March 2025)
What Changed:
Sheikh Hamdan's Executive Council Resolution No. 11 means free zone businesses can now expand into mainland Dubai with just a permit from the Department of Economy and Tourism (DET) - eliminating the previous requirement to set up a costly separate company.
Key Benefits:
- Save AED 15,000+ - No need for duplicate company setup
- Expand immediately - DET permits issued in 2-3 days
- Keep your free zone benefits - Maintain tax advantages while accessing mainland
- One company, two markets - Operate in both free zone and mainland
Requirements:
- Obtain DET permit or branch license
- Maintain separate accounting for mainland operations
- Comply with mainland regulations for those activities
- Free zone must be in Dubai (DIFC excluded)
What This Means For You:
Previously, if you wanted to sell to Dubai customers from a free zone, you needed either a separate AED 28,750 mainland company or expensive distributor agreements. Now, a simple permit gives you full mainland access while keeping your free zone advantages.
Note: DET will publish the list of approved activities by September 2025. Currently, most trading and service activities are pre-approved.
This follows Abu Dhabi's similar ADDED dual license system launched in February 2025, showing the UAE's commitment to removing business barriers.
Which One Should You Actually Choose?
Summary
Choose FREE ZONE If:
- International clients only (or willing to get DET permit)
- Want cheapest setup (from AED 12,290 total)
- Online business or consulting
- Need quick setup (3-5 days)
- Virtual office acceptable
Choose MAINLAND If:
- Need to work with UAE government
- Physical retail/restaurant
- Multiple branch locations
- Unlimited visa requirements
- Higher banking success important