Category
Dubai Mainland
Free Zone
Company Structure
Onshore company licensed by the Department of Economy and Tourism (DET/DED). Can operate freely within the UAE and internationally.
Company established under a Free Zone Authority. Can operate internationally and within the zone, with certain mainland restrictions depending on activity.
Ownership
Most activities allow 100% foreign ownership. Professional licenses may require a Local Service Agent (LSA) without ownership rights.
100% foreign ownership with no local sponsor or local service agent required.
Business Activities
Wider range of activities including specialized and regulated activities. Up to 7 related activities can usually be included.
More flexibility in combining activities. Some regulated activities may not be available or may require extra approvals.
Business Operations
Can trade directly across the UAE without restrictions.
Service businesses can usually operate across the UAE. Physical goods businesses may require distributors or logistics arrangements for mainland sales.
Office Requirement
Physical office or shop space generally required within 1 year.
Flexi-desk, co-working, virtual office, or dedicated office options available depending on package.
Visa Allocation
Visa quota depends on office size. Larger office allows more visas.
Visa quota depends on selected package such as 0 visa, 1 visa, or multiple visa packages.
Shareholders
Up to 50 shareholders for commercial licenses. Additional shareholders may increase costs.
Shareholder limits depend on package. Usually 3–5 shareholders allowed without additional charges.
Recognition
Strong local market recognition and eligibility for government contracts.
Recognition may vary depending on government entity and activity type.
No Objection Certificate (NOC)
May be required if under another employer’s visa sponsorship.
Usually not required.
Timeline
Longer process due to additional approvals and possible physical presence requirements.
Faster setup process, often within 1–5 days.
Audit Requirement
Annual audit generally mandatory.
Depends on the free zone. SPC/IFZA/SHAMS usually do not require audits, while Meydan/SRTIP may require them during renewal.
Capital Requirement
Depends on legal structure and activity.
Depends on the selected free zone and emirate.
Remote Setup
Physical presence may be required if no Emirates ID exists.
Company formation and immigration registration can usually be completed remotely.
Costs
Generally higher setup and operational costs. Suitable for businesses requiring direct UAE market access and larger visa quotas.
Usually more cost-effective and suitable for startups, SMEs, and remote businesses.
Government Approvals
May require approvals from DET/DED, Dubai Municipality, MOHRE, and other authorities.
Mainly governed by the Free Zone Authority with fewer external approvals.
Medical Insurance
Mandatory for employee visas.
Depends on the free zone. Requirements vary by jurisdiction.
VAT
5% VAT on local supplies and 0% on exports subject to conditions.
VAT treatment depends on whether the zone is classified as a designated zone.
Ideal For
Businesses needing unrestricted UAE market access, government projects, retail, or larger operations.
Consultants, startups, e-commerce, SMEs, remote businesses, and international operations.
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