Who this is for
- Founders deciding on a structure for the first time
- Free zone companies considering a move or a mainland branch
- Overseas groups choosing an entry route into the UAE
- Advisers and finance teams preparing a setup recommendation for management
What Scaleon helps with
- Translating your business model into concrete structure requirements
- Testing whether your activities are available in each route
- Estimating the cost elements that differ between routes, using current authority quotations
- Explaining Corporate Tax differences, including when the QFZP regime may or may not be relevant
- Planning a combined structure where both a free zone and a mainland presence make sense
Side-by-side comparison
The table summarises general positions. Individual free zones and emirates have their own rules, and specific activities can change the answer.
| Factor | Mainland company | Free zone company |
|---|---|---|
| Licensing authority | Economic department of the emirate, e.g. Dubai Department of Economy and Tourism | The relevant free zone authority |
| Market access | Can generally trade directly with customers across the UAE | Within the free zone and outside the UAE; mainland sales usually need a distributor, branch or permit |
| Foreign ownership | Full foreign ownership available for many activities; some strategic activities have conditions | Full foreign ownership generally available |
| Premises | Registered premises required (Ejari in Dubai); activity may dictate type and size | Flexi-desk, shared or dedicated space within the zone, depending on package |
| Visas | Generally linked to premises and activity | Generally linked to package or space leased |
| Government contracts | Can generally participate where tender rules allow | Usually limited or requires a mainland presence |
| Corporate Tax | 0% on taxable income up to AED 375,000 and 9% above; Small Business Relief may be available if conditions are met | Same standard rates unless the company meets all QFZP conditions, in which case qualifying income may be taxed at 0% |
| VAT | Standard VAT rules and thresholds apply | Standard VAT rules apply, with special treatment only for certain goods in designated zones |
| Audited accounts | Depends on revenue, legal form and authority rules | Required for QFZPs and by some free zone authorities |
Questions that usually decide the route
- Will most of your customers be UAE businesses or consumers on the mainland?
- Do you need a shop, clinic, warehouse or other public-facing premises?
- Is any of your activity regulated and subject to external approval?
- How many employees will you sponsor in the first two years?
- Do you expect to rely on the QFZP regime, and can you meet its substance and audit conditions?
- Would a combined structure, such as a free zone company with a mainland branch, be simpler or more costly?
Using the interactive tool
The tool asks a few questions about your customers, premises, team and activity type, and highlights which route tends to fit better and why. It does not use your answers to quote prices or guarantee eligibility. If the result is close, or your activity is regulated, a short consultation is the best next step.
Common misconceptions
- A free zone licence does not mean automatic 0% tax; QFZP status depends on meeting every condition each period.
- A mainland company is not always more expensive once multi-year renewals and visa needs are compared.
- Both routes must register for Corporate Tax and assess VAT registration.
- Changing route later is possible but usually means a new licence and new registrations, so planning early saves effort.
Information usually needed
- A brief description of your business model and revenue streams
- Expected customer locations (UAE mainland, free zone, international)
- Planned headcount and visa needs for the first two years
- Any existing group structure chart if a parent company is involved
What you receive
- A written recommendation comparing mainland and free zone routes for your activities
- A list of suitable authorities or free zones to consider
- Notes on tax considerations relevant to the chosen route
- Next steps and document checklist for the recommended route
What affects the fee
- Number of activities and business lines to assess
- Whether a group or multi-entity structure is being considered
- Depth of cost comparison required across authorities
- Whether the recommendation is followed by full setup support
Quotations are itemised, with government fees shown separately from professional fees.
How the process works
- 1
Use the tool
Answer the questions in the comparison tool to see an initial indication.
- 2
Share your details
Send us your activities, customer profile and team plans through the enquiry form.
- 3
Consultation
We discuss trade-offs, regulated activities and tax points relevant to your plan.
- 4
Written recommendation
You receive a recommendation with suggested authorities and a document checklist.
Frequently asked questions
Is a free zone always cheaper than the mainland?
Not necessarily. Initial packages can look lower, but renewal fees, visa costs, premises and the need for a mainland presence can change the comparison over several years.
Can I start in a free zone and move to the mainland later?
Yes, but it usually means a new mainland licence or branch, new registrations and possibly new bank arrangements. Planning for likely growth at the outset can avoid this.
Do both types of company pay Corporate Tax?
Both are within the Corporate Tax regime. Standard rates are 0% up to AED 375,000 of taxable income and 9% above. Free zone companies that meet all QFZP conditions may apply 0% to qualifying income.
Which is better for an online business?
It depends on where customers are and what is sold. Selling goods to UAE consumers often points to a mainland licence with an e-commerce activity, while serving international clients may suit a free zone.