Guides / Mainland vs free zone
Mainland or free zone: how to choose
The real question is where your customers are. Ownership is no longer the deciding factor.
| Mainland | Free zone | |
|---|---|---|
| Foreign ownership | 100% for most activities since Federal Decree-Law No. 26 of 2020, consolidated in No. 32 of 2021. Activities of strategic impact can carry ownership conditions. | 100%. |
| Who licenses you | The emirate's economic department (for example Dubai DET). | The free zone authority. |
| Selling in the UAE | Trade directly across the UAE market. | Trade within the zone and internationally. To sell into the mainland, use a licensed mainland distributor or set up a mainland branch or company, unless you hold the required mainland licences or approvals. |
| Imports | Customs duty applies on import. | 0% customs duty on goods brought into the zone; duty applies if goods move into the mainland. |
| Corporate tax | Standard regime. | Standard regime, unless the company is a Qualifying Free Zone Person: 0% on qualifying income, 9% on the rest. |
Restricted from full foreign ownership on the mainland
The UAE government portal lists activities that cannot be fully foreign-owned, including security, defence and military activities; telecommunications; banks, exchange, financing and insurance; commercial agencies; Hajj and Umrah organising; and fishing and pearl diving. Source: u.ae.
The middle route in Dubai
Dubai lets free zone establishments operate in mainland Dubai with a permit (Executive Council Resolution No. 11 of 2025, linked from the UAE government portal). Meydan Free Zone's price list shows the DET permit at AED 9,500 for one activity, plus AED 5,000 per additional activity.
Which to pick
- Mostly UAE customers, a shop, or government contracts: mainland, or a Dubai free zone company with a mainland permit.
- International clients, online business, consulting from the UAE: a free zone usually costs less to start. See the comparison.
- Importing and re-exporting goods: a free zone near a port or airport keeps duty suspended until goods enter the mainland.
Sources: Full foreign ownership of commercial companies, u.ae; Running a business in a free zone, u.ae; FTA Free Zone Persons guide.
Questions
Can a free zone company invoice mainland UAE clients?
As a rule, a free zone company should not sell directly into the mainland without a mainland licence, branch, distributor or permit. In Dubai, free zone establishments can apply for a permit to operate in the mainland.
Is 100% foreign ownership allowed on the mainland?
Yes, for most activities since Federal Decree-Law No. 26 of 2020, consolidated in No. 32 of 2021. Activities of strategic impact and a listed set of sectors are restricted.
Checked 18 October 2026. General information, not legal or tax advice.