When considering setting up a business in the UAE, you have the option to choose between operating in a free zone or the mainland. Both options have their advantages and work features.

Mainland companies are required to obtain licenses from the Department of Economy & Tourism (DET) or relevant authorities for their specific business activities. The ownership depending on the business activity, a local partner or service agent who is a UAE national or a UAE-owned company may be required in some cases, with a minimum ownership stake. Free zones have their own licensing and regulatory frameworks administered by their respective free zone authorities and allow 100% foreign ownership, allowing you to have full control over your business.

Mainland companies have more flexibility in choosing their business activities and can operate across a wider range of sectors and have the advantage of being able to cater to the local UAE market directly and allowed to trade or service anywhere in the United Arab Emirates and internationally.

Free zones often have specific industry focuses and cater to certain business activities and provide an ecosystem that supports those industries, offering sector-specific benefits, networking opportunities, and specialized infrastructure and can trade or service with other companies in their free zone or a company located in any other free zone within UAE and internationally. They are not permitted to trade directly with companies with registered businesses with offices in mainland areas, but while allowed to trade within the UAE, typically require a local distributor or agent to sell their products or services within the mainland.

Free zones provide customs advantages, allowing businesses to import and export goods without customs duties within the free zone or outside the UAE. Mainland businesses, however, must adhere to UAE customs regulations for importing and exporting goods.

Choosing between a free zone and the mainland depends on your business requirements, industry, market access needs, and long-term goals. It is advisable to conduct thorough research, seek professional advice from business consultants and consider the specific benefits and limitations of each option before making decision.