The two most common ways to set up in the UAE. A mainland licence lets you trade anywhere and win government work; a free zone gives fast, low-cost setup with 100% ownership. Offshore is the third name you'll hear, and it is a different kind of thing entirely — it's in the table below and has its own section. Here's how they really differ — and how to choose.
The differences that actually change your decision — not the fine print.
| Mainland | Free Zone | Offshore | |
|---|---|---|---|
| What it is | Active trading and operating inside the UAE | A licensed operating company (FZE / FZ-LLC) | A non-resident holding and international-trade vehicle |
| Foreign ownership | 100% for most activities | 100%, always | 100%, always |
| Where you can trade | Anywhere in the UAE + abroad | In the zone + abroad; mainland via a distributor, a branch, or a DET operating permit in Dubai | International only — cannot trade inside the UAE |
| Government contracts | Yes — can bid and invoice | Not directly | No |
| Office | Physical office required (Ejari) | Flexi-desk or shared options | None — no physical presence in the UAE |
| Visas | Scales with office size | Set by your package quota | None — offshore companies cannot issue UAE visas |
| Corporate tax | 9% above AED 375k | 0% on qualifying income, otherwise 9% | A UAE Resident Person, taxed on worldwide income — 0% to AED 375,000, 9% above. FTA registration required either way |
| Setup cost | Higher — office + DED fees | Lower — packaged pricing | Lowest — no office, no visas |
| Setup time | 2–4 weeks | 1–2 weeks | A few days to a week |
| Best suited to | Retail, contracting, local clients, govt work | Trading, services, holding, remote & global | Holding shares, property and IP, international invoicing, confidentiality |
Choose mainland if you need to sell directly to UAE customers, open a shop, or bid for government work. Choose a free zone if you sell internationally or B2B, want the lowest entry cost, and value speed and 100% ownership with minimal overhead. Choose offshore only if you need a holding or international-trade vehicle and no UAE staff, office or residency — it is not an operating licence, and it is not a way out of UAE corporate tax.
Offshore is the option founders most often line up next to these two, and it doesn't belong in the same row. It isn't a cheaper licence — it's a non-resident holding and international-trade vehicle with no UAE office, no staff and no visas. Plenty of groups run two entities for exactly that reason: an offshore company that holds, and a free zone or mainland company that operates.
The questions we hear most when founders weigh the two.
Ask AgentBizNot automatically, but there are now three routes. You can appoint a mainland distributor or open a mainland branch, as before. Or, since 8 October 2025, apply for Dubai's Free Zone Mainland Operating Permit through DET — AED 5,000 for six months, currently for non-regulated activities like tech, consultancy, design, professional services and trading — which lets you serve mainland customers directly, government tenders included. It is Dubai-specific and permit-gated, so we check your activity qualifies before you rely on it. For B2B and international sales none of this matters.
Yes — since 2021 most commercial and industrial activities allow full foreign ownership on the mainland. A short strategic-impact list still needs an Emirati partner; we'll confirm for your specific activity.
A free zone is usually cheaper to start because setup is packaged and you can use a flexi-desk. Mainland costs more up front due to office rent and DED fees, but can be worth it when your customers are local.
The 9% UAE corporate tax applies above AED 375,000 of profit for both. Qualifying free zone companies can keep 0% on qualifying income if they meet the conditions — we'll assess whether you qualify.
Yes. Many founders start in a free zone and add a mainland licence or branch once they win local customers. We handle the transition end to end.
Neither. Offshore companies are non-resident vehicles: they cannot sponsor UAE visas, and they cannot sell inside the UAE — they exist for holding assets and international business. If you need residency or local customers, that's a free zone or mainland company.
No — this is the most common misconception about the structure. A company incorporated in the UAE is a UAE Resident Person, so an offshore company sits inside the corporate tax regime on its worldwide income: 0% to AED 375,000 and 9% above. FTA registration is required either way, whether or not tax ends up payable.
Yes, and many groups do. The offshore company holds the shares, property or intellectual property while a mainland or free zone company trades, hires and invoices. Popular offshore options include JAFZA Offshore, RAK ICC and Ajman Offshore. We can structure both together.
Two minutes with our advisor (or AgentBiz) and you'll know whether mainland, a free zone or an offshore structure is right for you, and what it costs.