The short answer
Choose mainland if your customers are UAE businesses or government and you need to trade anywhere in the country. Choose a free zone if you mainly trade internationally, serve clients online, or want a lower-cost start with simple setup.
Where you can trade
- Mainland: anywhere in the UAE, including government tenders
- Free zone: inside the zone and outside the UAE; selling on the mainland usually needs a distributor, agent or mainland branch
- Offshore: holding and asset ownership only — no trading in the UAE and no visas
Ownership, office and visas
Most mainland activities now allow full foreign ownership; some still need a local service agent. A mainland licence needs a registered office lease (Ejari). Free zones offer flexi desks and small offices, with visa quotas tied to the space you rent.
Tax is (mostly) the same
Corporate tax and VAT apply to both. The difference is that a free zone company that meets the conditions can be a Qualifying Free Zone Person and pay 0% on qualifying income — but it then needs audited accounts and adequate substance in the zone.
Year two matters
Compare renewal costs, not just the first-year package: licence renewal, office rent and visa renewals every two years. Our setup estimator shows both years side by side.
