Mainland vs Free Zone Company Setup: Which One is Right for You?
Overview
Setting up a business in the UAE is a smart move for many reasons—zero personal tax, global connectivity, and a booming economy. But before you jump in, one of the most important decisions you’ll face is choosing between a Mainland and a Free Zone company setup.
Each option has its own benefits, rules, and limitations. In this guide, we break down everything you need to know to decide which one suits your business best.
What is a Mainland Company?
A Mainland company is a business entity licensed by the Department of Economic Development (DED) in each emirate. These companies are allowed to operate within the UAE market and internationally, without any restrictions.
Key Features of Mainland Company Setup:
- Can trade freely in the UAE local market
- Can work with government clients
- Physical office space is mandatory
- Can apply for unlimited employee visas (depending on office size)
What is a Free Zone Company?
A Free Zone company is established within one of the UAE’s many designated economic areas, such as Dubai Multi Commodities Centre (DMCC), Jebel Ali Free Zone (JAFZA), or Sharjah Media City (Shams).
These zones offer unique advantages for foreign investors and startups focused on international trade, tech, or services.
Key Features of Free Zone Company Setup:
- 100% foreign ownership
- No need for a local sponsor
- Lower setup and operational costs
- Tailored packages (including Flexi-desk options)
- Cannot directly trade in the UAE mainland without a distributor or branch
Detailed Comparison: Mainland vs Free Zone
| Feature | Mainland Company | Free Zone Company |
|---|---|---|
| Ownership | 100% foreign ownership allowed (as of recent reforms in most sectors) | 100% foreign ownership |
| Local Market Access | Direct access to UAE market | Limited; requires agent or distributor |
| Office Space Requirement | Mandatory physical office | Optional Flexi-desk or shared office |
| Visa Eligibility | No limit (based on office size) | Limited (depends on package) |
| Government Contracts | Eligible | Not eligible |
| Setup Speed | Standard (takes 5–10 working days) | Fast-track available (2–5 days) |
| Cost | Slightly higher due to office rent and other fees | More budget-friendly setup options |
| Regulatory Authority | Department of Economic Development (DED) | Individual Free Zone Authority |
When Should You Choose Mainland Setup?
Go for a Mainland company if:
- You want to do business directly within the UAE market
- You plan to open a shop, restaurant, or office in a public location
- You aim to work with government contracts or tenders
- You need unlimited visas for staff
- Your business requires custom flexibility, like transport, logistics, or construction
When Should You Choose Free Zone Setup?
A Free Zone setup is ideal if:
- You want 100% ownership and a quick, low-cost setup
- You plan to focus on international clients or online business
- You prefer a simplified license process with fewer requirements
- You don’t need a large office or warehouse
- You’re launching a startup, tech company, or consulting business
Most Popular Free Zones in the UAE
Here are some of the top free zones entrepreneurs choose in 2025:
- IFZA (International Free Zone Authority) – Flexible packages, low-cost
- RAKEZ (Ras Al Khaimah Economic Zone) – Budget-friendly and diverse
- Dubai Silicon Oasis (DSO) – Great for tech startups
- DMCC (Dubai Multi Commodities Centre) – Perfect for trading and commodities
- Shams (Sharjah Media City) – Media, freelance, and digital businesses
For help choosing the right free zone, reach out to our experts at Protypings.com.
Cost Comparison (2025 Estimates)
| Setup Component | Mainland | Free Zone |
|---|---|---|
| Trade Name Registration | AED 600-2600 | AED 500 – 700 |
| Business License | AED 3,000 – 15,000 | AED 5,500 – 15,000 |
| Office Rent | AED 12,000+ | AED 3,000 – 10,000 (Flexi-desk) |
| Visa Costs (per person) | AED 4,000 – 7,000 | AED 3,500 – 6,000 |
Note: Actual costs may vary based on business activity and emirate.
Can I Convert a Free Zone Company to Mainland?
Yes, but it involves several steps:
- Cancel the Free Zone license
- Register a new Mainland company
- Apply for visas and office space anew
- Close or transfer any contracts or bank accounts
Protypings.com can assist you with the complete transition process without disrupting your operations.
Final Verdict: Which One is Right for You?
- Choose Mainland if you’re targeting the UAE market, need a larger team, or want flexibility for growth.
- Choose Free Zone if you’re launching lean, operating online, or working with overseas clients.
If you’re still unsure which setup to go for, Protypings.com offers free expert consultation to help you make the best decision for your business vision.
How Protypings.com Can Help
At Protypings.com, we offer:
- Company registration in all UAE jurisdictions
- Business license assistance
- PRO and government documentation
- Office space & Flexi-desk solutions
- Corporate bank account setup
- Visa processing for owners and staff
Let us handle the paperwork while you focus on growing your business.
Get started today at Protypings.com.