Mainland vs Free Zone Company Setup in Dubai Which Is Better in 2026
Choosing where to register your company in Dubai is one of the first and most important decisions you will make. The choice between mainland and free zone affects ownership, taxes, office requirements, visas, the ability to trade locally, banking and much more. This guide explains the differences clearly, shows the pros and cons of each option, and gives practical advice so you can decide which is better for your business in 2026. Quick summary upfront Read on for a detailed comparison with practical examples, estimated costs, and a decision checklist. What Mainland company setup means in Dubai A mainland company is registered with the Department of Economy and Tourism or equivalent emirate authority and is allowed to do business across the UAE without restrictions. Mainland companies can deal directly with local customers, take part in local tenders and work with government entities. Key features: Choose mainland if your customers are mainly in the UAE, you need to bid on government contracts, or your business model depends on walk-in retail, supply to local companies or services delivered onshore. What Freezone company setup means in Dubai Free zones are special economic areas designed to attract foreign investors. Each free zone has its own authority, rules and business activities list. Examples in Dubai include JAFZA, DMCC, Dubai Internet City and Dubai Multi Commodities Centre. Key features: When free zone is the logical choice Choose a freezone if you sell mainly outside the UAE, want full foreign ownership, or want a lower cost and faster setup. Freezone is suited for ecommerce, software, consulting for overseas clients and international trading. Side by side comparison Topic Mainland Company Freezone Company Ownership 100% ownership available for many activities but subject to rules 100% foreign ownership standard Local market access Full access to UAE local market without agent Limited direct access to local market unless using a local distributor or establishing a branch Office requirement Physical office usually required for license Options include flexi desk, shared office or physical office depending on free zone Visa Visa quota linked to office size and activity Visa packages vary by free zone and are often flexible Cost to start Moderate to high depending on office and approvals Often lower initial cost due to flexi desk options Tax and corporate structure Corporate tax rules as per UAE law apply equally Same corporate tax rules apply; some free zones offer incentives but no tax exemption from corporate tax law Banking Widely accepted by local and international banks Banks accept free zone accounts; some banks specialise in free zone clients Ability to bid for government contracts Yes Not directly without mainland presence or local partner Trade license speed Moderate Usually faster Ideal for Local service providers, retail, construction, supply, onshore operations Export, IT, ecommerce, consultancy, holding companies Costs to expect in 2026 Costs vary by emirate, business activity and the exact free zone chosen. Below are realistic ranges to plan for. Item Mainland approximate AED Free zone approximate AED Trade name and initial approval 500 to 2,000 500 to 1,500 Trade license yearly fee 6,000 to 20,000 5,500 to 18,000 Office rent small workspace yearly 20,000 to 60,000 Optional flexi desk 3,000 to 8,000 Visa processing per visa 3,500 to 7,000 2,500 to 6,000 Corporate bank account setup 0 to 5,000 0 to 4,000 Additional approvals or NOCs 2,000 to 10,000 Rare or bundled in package Estimated first year total 40,000 to 120,000 10,000 to 50,000 These figures are indicative. Some free zones offer packages starting from AED 5,500 and promotion rates that reduce initial cost. Mainland costs often rise with office scale and specific activity approvals. Practical examples to guide your choice Example 1. Retail store or restaurant: If you plan to open a shop, take bookings for local customers or serve dine in clients choose mainland. A mainland license allows you to get trade permits, food safety approvals and local supplier contracts. Example 2. Software as a service selling to global clients: Choose free zone. You get 100 percent ownership, a flexi desk for lower cost and easier processing. Most software companies sell internationally and benefit from free zone setups. Example 3. Import export trading: If your business re-exports or owns inventory for international customers, a free zone like JAFZA or DMCC makes sense because customs and logistics infrastructure are tailored for trading. Example 4. Consultancy that also wants to work with UAE clients: Consider a dual structure. Register in a free zone for international clients and create a small mainland branch or commercial agent for local contracts. This keeps costs manageable and preserves local access. Visas and Staffing explained Mainland Freezone Tip: If you expect to scale a team quickly, factor visa cost and processing speed into your decision. Bank accounts and payments Both mainland and free zone companies can open corporate bank accounts. Bank acceptance depends on bank risk appetite, shareholder profile and business model. What banks check: Tip: Free zone companies often use specialised banks that handle international clients and multi currency accounts. Mainland companies typically find it easier to work with local corporate banking services. Tax and Compliance in 2026 The UAE corporate tax regime applies across jurisdictions. Recent years brought more clarity around corporate tax, economic substance and transfer pricing rules. Whether you choose mainland or free zone, you must plan for: Do not make decisions assuming any automatic tax exemption. Check the current rules for your activity and jurisdiction. Pros and Cons at a glance Mainland pros: Mainland cons: Freezone pros: Freezone cons: Decision checklist Use this quick checklist to decide: If most answers point to local customers and local operations choose the mainland. If your customers are mostly outside the UAE and you prefer faster setup and full ownership choose a free zone. How AB Capital helps you choose and set up Choosing the right jurisdiction is a strategic decision. AB Capital Services supports founders and companies with: AB Capital focuses on the right structure for your business objective rather than pushing a single
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