Selecting the right location for a company in Dubai involves clear awareness of how each jurisdiction functions. Free zones and mainland areas have distinct structures for ownership, activities, and market access. The decision often depends on operational goals, target clients, and compliance with local regulations. Assessing these differences at the outset can support long-term planning.
Ownership structure:
In free zones, 100% foreign ownership is generally permitted, allowing entrepreneurs to retain complete control over the business. Business setup in Dubai mainland allows full foreign ownership for specific activities, while other activities may have different shareholding structures as per regulations.
Scope of business activities:
Free zone licences typically limit operations to within the specific free zone or for international trade. To trade directly with the Dubai local market, a free zone company may involve a distributor or other arrangement. Mainland licences permit direct trading with the UAE market across all emirates, subject to the approved activities.
Office location requirements:
Free zone businesses must operate from an office or facility within the designated zone. Mainland companies can establish offices anywhere within the emirate, provided the premises meet municipal and regulatory requirements.
Regulatory authority:
Each free zone has its own governing authority responsible for licensing and compliance. Mainland businesses are licensed and regulated by the Department of Economic Development in Dubai, along with other relevant government departments based on activity.
Visa allocation:
Visa quotas differ between free zones and mainland entities. Free zones allocate visas based on office size or package type. Mainland companies have visa limits linked to office space and other conditions under government guidelines.
Cost structure:
Costs vary depending on jurisdiction, location, and facility size. Free zones may offer packages that include licences, visas, and office space in one fee. Mainland businesses may have separate fees for licensing, office leasing, and other permits.
Free zone companies may want to establish a mainland entity to expand into certain markets. Mainland businesses can operate across all emirates and internationally without additional jurisdiction changes, though they must adhere to all relevant rules. Careful evaluation of ownership preferences, operational scope, and regulatory obligations can support the selection of the jurisdiction that best matches the company’s strategic direction.
