Mainland or free zone

The same country, two sets of rules. What changes: who licenses you, where you may sell, your visas, your tax and your audit.

General information, checked on 14 November 2026. Rules change, and this is not legal or tax advice. Each statement shows the number of its source.

Side by side

	Mainland	Free zone
Who licenses you	The emirate's economic department	The zone's own authority^{1 2}
Selling on the mainland	Yes. It is a mainland licence	Through a mainland distributor, branch or company. Direct sales are generally not permitted^{1 3}
Trade abroad	Yes	Yes. Import, export and re-export are generally unrestricted³
Foreign ownership	100% allowed since 2021, except in listed activities	100% allowed^{4 3}
Premises	A physical address with a tenancy contract. In Dubai the lease is registered with Ejari	Set by the zone. DMCC, for example, offers flexi-desks, co-working and serviced offices^{1 5}
Staff visas	A quota approved by the labour ministry, from legal status, facility size and need	Applied for through the zone. The number depends on the package you take^{6 7}
Customs duty	UAE tariffs run from 0 to 5%	0% on goods brought into the zone. Duty applies when goods enter the mainland^{8 3}
Corporate tax	0% on taxable income up to AED 375,000, then 9%	The same, unless the company is a Qualifying Free Zone Person: then 0% on qualifying income and 9% on the rest^{9 10}
VAT	5%	5%. A free zone is not an exemption. Only a designated zone is treated as outside the UAE for VAT^{11 12}
Yearly audit	Required for every LLC and joint stock company	Required for every Qualifying Free Zone Person. Zones add their own filing rules^{13 14}

Use a licensed mainland distributor, or set up a mainland branch or company.³
Dubai, since 2025: a Dubai free zone company may work outside its zone under a branch licence, a licence for a branch run from the zone, or a permit of up to six months.¹⁵
Dubai's Free Zone Mainland Operating Permit runs six months and is renewable. Its first phase covers non-regulated activities only. Mainland revenue under it is taxed at 9%, with separate records.¹⁶
A 2025 change to the companies law lets free zone companies work on the mainland through branches or representative offices.¹⁷

The company needs adequate substance in the UAE, must earn qualifying income, and must follow the transfer pricing rules.¹⁸
Other revenue must stay under 5% of total revenue or AED 5 million, whichever is lower.¹⁹
Audited financial statements are required, whatever the revenue.^{19 14}
Miss one condition and the status is lost for that tax period and the next four.¹⁹
A Qualifying Free Zone Person does not get the 0% band on the first AED 375,000 of its other income.¹⁰
Only a zone named for corporate tax counts. The tax authority tells companies to confirm with their zone.¹⁰

Activities not fully open to foreign owners include defence and security, telecommunications, banking and insurance, commercial agencies and fishing.⁴
A 2025 change to the companies law lets a company move its registration between emirates, free zones and financial free zones without being wound up, subject to approvals.¹⁷
Abu Dhabi issues some mainland licences that need no physical office.²⁰

Tell us what you want to set up or keep in order. We will say plainly what we can do and when we open.