Free Zones | Mainland | |
Ownership | 100% foreign ownership | 100% foreign ownership (excluding some regulated industries) |
Visas | Limited visa quota depending on office size and Free Zone regulations. | More flexible visa quotas based on office space. |
Cost | Generally lower cost to set up and operate. | Higher costs to set up and rent offices. |
Regulatory control | Regulated by Free Zone authorities. | Regulated by the Department of Economic Development (DED). |
Corporate Tax | Full tax exemptions for certain businesses, usually for up to 50 years, if you meet the requirements for Qualified Free Zone Person (QFZP) registration. | 9% Corporate Tax rate, with the first AED 375,000 of taxable income being tax-free. |
Trade restrictions | Can only operate within the Free Zone or internationally. Cannot directly trade with the UAE mainland without a local distributor. | Can do business anywhere in the UAE and internationally. |
✅ Pros | - 0% personal income tax and Corporate Tax (if you meet all the criteria) - custom duty exemptions on imports and exports - world-class infrastructure and warehousing - quick and easy setup process | - can operate anywhere in the UAE and internationally - more credibility for local clients and government contracts - unlimited visa eligibility (based on office size) - no restrictions on business activities across the UAE |
❌ Cons | - limited ability to trade directly in the UAE market - some Free Zones have restrictions on what kinds of businesses you can do - number of visas is limited depending on office space | - higher setup and operational costs - requires a physical office space - more compliance, including annual audits |
👉 Best for | - e-commerce, consulting, and international trading companies - startups and small businesses looking for a cost-effective setup. - entrepreneurs who don’t need a physical presence in the UAE | - businesses that need to serve UAE customers directly (retail, restaurants, real estate, etc.) - companies wishing to operate in the UAE without regional limitations - investors who need unlimited visas and local market flexibility |