Business setup in Dubai is available through different structures. Two of the main choices are freezone and mainland. Each option follows its own steps and rules. While both allow companies to operate legally in Dubai, there are several differences between them in terms of location, licensing, and ownership.
Business location:
Freezone companies are based in special areas called free zones. These areas are designed for specific industries and are located in separate zones across Dubai. Business setup in Dubai mainland, instead, is allowed to operate in any part of the city outside of these free zones. This gives mainland businesses wider access to different locations and markets across Dubai.
Market access:
A mainland company is allowed to trade directly with the local UAE market without restrictions. It can work with other businesses and government departments across the country. A freezone company is usually allowed to trade only within the free zone itself or outside the UAE. If a freezone business wants to trade within the UAE market, it may want to work through a distributor or local agent.
Business ownership:
Both freezone and mainland companies allow full foreign ownership in many cases. However, this depends on the type of activity and the latest policies. Freezone companies have allowed full ownership for many years. Mainland companies now allow full ownership for many business types as well, especially under updated regulations.
Office space rules:
Mainland companies must rent a physical office space in Dubai, and it must be registered with Ejari. Freezone businesses may operate from flexi-desks, shared offices, or dedicated offices, depending on the rules of that specific zone. This may affect the total setup cost and office flexibility.
Government approvals:
Mainland businesses go through the Department of Economic Development (DED) for licensing and approvals. Freezone companies are registered through the freezone authority that manages the zone. Each authority has its own steps, documents, and timelines.
Visa quotas:
Both setups allow visa applications for employees. Mainland companies have visa quotas that depend on office space size. Freezone companies have their own visa limits, which also vary by space and the zone’s policies. Some freezones provide more flexibility in the number of visas per company.
