Dubai Mainland vs Free Zone in 2026: Which Setup Fits You?

Dubai mainland vs free zone is mainly a question of where your customers are and which authority licenses you. Mainland companies are licensed by the Department of Economy and Tourism (DET). Free-zone companies are licensed by a free-zone authority, each with its own rules.

What is a Dubai mainland company?

A mainland company is licensed by DET. Licence categories include commercial, professional and industrial, plus the home-based E-Trader licence for sole establishments, which needs approval from the telecoms regulator (TDRA). See DET business licensing for the current list.

What is a Dubai free zone company?

A free-zone company is licensed by a designated free-zone authority, not DET. Each free zone sets its own activities, office rules, visa arrangements and fees, so one free zone tells you little about another. Compare packages in writing, including renewal terms and what is excluded.

Can a free-zone company work on the Dubai mainland?

Under Dubai Executive Council Resolution No. (11) of 2025, a company licensed by a free zone can operate in Dubai outside the zone if it gets the required licence or permit from DET. DET launched the Free Zone Mainland Operating Permit in October 2025 and said the framework covers more than 10,000 free-zone companies.

The Dubai Media Office reports that the permit is for eligible companies that hold a Dubai Unified Licence, that the first phase covers non-regulated activities such as technology, consultancy, design, professional services and trading, and that it is valid for six months. A branch licence, valid for one year and renewable, is the other route. Mainland revenue must be kept in separate financial records. Conditions and fees can change, so confirm them with DET before relying on this route. The same sources reported a fee of AED 5,000 per six-month permit, which you should also confirm.

It still does not give every free-zone company unrestricted mainland access.

Do I need a local partner on the mainland?

Often not. Since Federal Decree-Law No. 26 of 2020 amended the Commercial Companies Law, most mainland activities can be 100% foreign owned. Activities classed as having a strategic impact can have ownership limits, set by Cabinet. Check the exact activity before you choose a structure. See the UAE Government page on full foreign ownership.

Foreign ownership in free zones is set by each authority, so confirm it with the one you pick.

How are mainland and free zone companies taxed?

Neither is automatically tax-free. Under UAE corporate tax, most companies pay 0% on taxable income up to AED 375,000 and 9% above it. A Qualifying Free Zone Person that meets all the conditions, including adequate substance, pays 0% on qualifying income and 9% on other taxable income. It does not get the AED 375,000 0% band. Free-zone companies that do not meet the conditions fall under the standard rules.

See our guides to UAE corporate tax and VAT registration for registration duties.

Mainland vs free zone: side-by-side

Which is cheaper?

There is no universal answer. Cost depends on activity, premises, visas, approvals and renewal. Advertised free-zone prices are not quoted here because current ones could not be verified. Compare the total first-year cost and the cost in year two. Our Dubai business setup cost guide lists the cost categories to ask about.

Does the choice affect banking?

Both can apply for a UAE corporate account, and approval is the bank's decision in each case. Banks look at your activity, owners, expected turnover, customers and documents. See our corporate bank account guide.

Which should I choose?

• Mainland if most revenue comes from Dubai or UAE customers, you need local premises, or the activity fits a DET licence.
• Free zone if a specific zone suits your sector, or you work mainly with overseas clients.
• Free zone plus mainland permit if you already have a free-zone base and need some Dubai work.

Official sources

• Dubai DET: Business Licensing
• Dubai DET: Free Zone Mainland Operating Permit
• Dubai Media Office: Free Zone Mainland Operating Permit
• UAE Government: Full foreign ownership of commercial companies
• Ministry of Finance: Corporate Tax in the UAE
• Federal Tax Authority: Free Zone Person bulletin

Related guides: JAFZA company setup, Sharjah mainland licence.