You can set up a company on the ‘mainland’ or in a free zone – here’s a comparison of both options.
When setting up a company in Dubai, the first major decision you have to make is where to establish your business: within one of Dubai’s many free zones, or on the “mainland”. It’s important to make an informed choice regarding company jurisdiction, and to understand what “mainland” and “free zone” mean.
Areas outside the free zones: the Dubai Department of Economy & Tourism (DET) manages registration and licensing of mainland companies. Packages Starts from 1500 AED!
Designated areas within Dubai, with benefits including custom duties and tax exemptions. Each zone has its own rules, regulations and authorities. Packages starts from 1500 AED
Free zones are usually tailored to specific industries or sectors, and typically companies within free zones conduct business outside the UAE. Mainland companies can trade within and outside the UAE, and are subject to standard Dubai laws and regulations.
To help you make an informed decision, we’ve compared the two business set-up options below, highlighting criteria that might affect your decision.
In Dubai, ‘mainland’ refers to the areas outside the free zones. Companies established on the mainland are issued licences by the Department of Economy and Tourism.
On the other hand, ‘free zones’ in Dubai are specially designated areas, often sector-specific. Each free zone operates under its own rules and regulations for licensing and registration.
In Dubai’s mainland, there are no territorial restrictions on business activities. Companies here can operate both within and outside the UAE, including the broader GCC region. This includes the free zones.
Meanwhile, free zones in Dubai primarily focus on business activities outside the UAE. However, six specific free zones offer dual licences, which allow businesses to engage in both onshore and offshore activities.
In the mainland, foreign investors are permitted full ownership, according to the Federal Decree-Law No. 26 of 2020, which amended Federal Law No. 2 of 2015 on Commercial Companies. This means that foreign investors can have 100% ownership in more than 1,000 commercial and industrial activities. However, this excludes economic activities with a strategic impact, which relate to certain specific sectors.
In free zones, foreign investors can have 100% ownership of all companies.
Yes, it is mandatory for mainland companies that a minimum of 2% of their skilled workforce consists of Emirati nationals.
Conversely, businesses operating within free zones have no Emiratisation requirements.
On the other hand, ‘free zones’ in Dubai are specially designated areas, often sector-specific. Each free zone operates under its own rules and regulations for licensing and registration.
Businesses setting up on the mainland have a diverse range of legal forms to choose from, aligning with their intended business activities. These options include General Partnerships, Limited Partnerships, Limited Liability Companies, Single Owner Limited Liability Companies, Private Joint Stock Companies, Single Owner Private Joint Stock Companies, Public Joint Stock Companies, Civil Companies, and Sole Proprietorships.
In Dubai’s mainland, there are no territorial restrictions on business activities. Companies here can operate both within and outside the UAE, including the broader GCC region. This includes the free zones.
Meanwhile, free zones in Dubai primarily focus on business activities outside the UAE. However, six specific free zones offer dual licences, which allow businesses to engage in both onshore and offshore activities.
In Dubai’s mainland, businesses are required to have a physical workspace with a minimum size of 100 sq. ft. There are no restrictions on the location where the company can rent or buy office premises.
Conversely, there are no compulsory physical office space requirements for free zone companies. Free zones provide the option of virtual and flexible desk solutions for business licences. However, if businesses choose to lease office space, it must be within their free zone.
