This is the #1 question we get. And the honest answer is: it depends. Not on which is "better" - but on your specific business.
Instead of "which is better?" ask: "Which structure lets my specific business operate most effectively?"
A solo consultant and a restaurant chain have completely different needs. The "best" choice for one would be wrong for the other.
Operates within a designated free zone. Historically couldn't trade directly in UAE mainland (this is changing). Lower costs, simpler setup, 100% foreign ownership from the start.
Licensed by DED (Department of Economic Development). Can trade anywhere in UAE without restrictions. Required for certain activities. Now allows 100% foreign ownership in most sectors.
Work through these questions. Your answers point toward the right structure.
Primarily international clients, other free zone companies, or B2B services
UAE consumers, local businesses, government contracts
Ask yourself: Where does 80% of your revenue come from?
Services, digital products, international trading
Physical goods to UAE market, regulated services requiring local presence
Ask yourself: Do you need to physically deliver or operate within UAE?
Virtual office or flexi-desk often sufficient
Physical office required (Ejari lease mandatory)
Ask yourself: Do you need a real office for your operations?
Limited visa quotas in budget zones (1-6 visas typical)
Unlimited visas based on office size
Ask yourself: How many employees will you hire in UAE?
Lower initial costs, especially with virtual office
Higher setup costs but no trading restrictions
Ask yourself: Is minimizing Year 1 cost critical, or total value?
Here's how different business types typically land:
Lower costs, virtual office works, no need for UAE market access
Free zone can work with new DET permit, but mainland may be simpler for direct B2C
Physical location serving public requires mainland license
Visa needs may push toward mainland, but free zone tech ecosystems have benefits
JAFZA (free zone) great for re-export, mainland better for UAE distribution
Most government tenders require mainland license
As of March 2025, free zone companies can obtain a DET permit to trade in mainland Dubai. This changes the calculus for some businesses.
However, it's not a complete solution - there are still scenarios where mainland is required or simpler. The "right" answer is becoming more nuanced, not less.
We don't say "Free zone is always cheaper"
Because when you factor in DET permits, visa limitations, and potential restructuring later, sometimes mainland has lower total cost of ownership.
We don't say "Mainland is always better for growth"
Because many successful businesses operate entirely from free zones serving international markets.
We do say "Let's understand your business first"
Because the right recommendation depends on details only you can provide.
The framework helps, but there are nuances specific to your situation. Get a personalized recommendation.
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