Free Zones vs. Mainland: Which is Better for Your UAE Business in 2025?

When setting up a business in the UAE, one of the biggest decisions you’ll face is whether to establish your company in a free zone or on the mainland. Both options offer unique benefits and limitations, and understanding these can help you make the best choice for your business goals.

What Are Free Zones?

Free zones are designated areas that offer attractive benefits such as:

• 100% foreign ownership with no local sponsor required
• Tax exemptions on corporate and personal income
• Simplified import/export procedures
• State-of-the-art infrastructure and business support services

However, free zone companies are generally restricted to operating within their zones or internationally and cannot directly sell to the UAE mainland market without a local distributor.

What Are Mainland Companies?

Mainland companies can operate anywhere in the UAE and directly trade with the local market. Recent legal reforms have expanded the list of activities eligible for 100% foreign ownership, although some sectors still require a UAE national partner or sponsor. Mainland businesses must have a physical office and comply with more stringent regulatory requirements.

Key Factors to Consider

Which One is Right for You?

·         Choose Free Zone if: You want full ownership, are targeting international markets, or need flexible office solutions.

·         Choose Mainland if: You want to trade directly in the UAE market, bid for government contracts, or require a broader business scope.

At Jesser Al Najah LLC, we help you evaluate your business model and recommend the optimal jurisdiction, ensuring compliance with the latest UAE laws and maximizing your growth potential.