How to Start a Company in Dubai: Free Zone vs Mainland (2025 Guide)

Introduction

Dubai’s position as a global business hub makes it one of the most attractive destinations for entrepreneurs, investors, and multinational corporations. With its tax-friendly environment, strategic location, and robust infrastructure, starting a business here is a smart move. But before you begin, one key decision awaits: should you set up in the Mainland or a Free Zone?

This 2025 guide will help you understand the difference, walk you through the setup process, outline costs, and provide insider tips to make the right choice.

Understanding Dubai Mainland Companies

A Mainland company is licensed by the Department of Economic Development (DED) and allows you to operate anywhere in the UAE and internationally.

Key Benefits of Mainland Setup:

• Full access to UAE’s local market and beyond.
• Ability to work with government entities.
• Unlimited visas (depending on office size).
• No restrictions on the type of business activity (subject to approval).

Things to Consider:

• Requires physical office space.
• Higher setup and operational costs compared to Free Zones.

Understanding Dubai Free Zone Companies

A Free Zone company operates within a specific jurisdiction and is managed by the respective Free Zone Authority. Dubai has over 40 Free Zones, each specializing in different sectors such as technology, trade, finance, or logistics.

Key Benefits of Free Zone Setup:

• 100% foreign ownership.
• Corporate tax exemptions in qualifying free zones.
• Customs duty benefits.
• Flexible office solutions like flexi-desks and virtual offices.

Things to Consider:

• Restricted from direct trade in the UAE mainland without a local distributor.
• Some business activities may not be available in all zones.

Mainland vs Free Zone – 2025 Comparison Table

Step-by-Step: Starting a Company in Dubai (2025)

Step 1: Choose Your Business Activity
Select from the DED or Free Zone Authority’s approved activity list.

Step 2: Select Jurisdiction
Mainland (DED) or a specific Free Zone (e.g., DMCC, IFZA, JAFZA).

Step 3: Pick Your Legal Structure
Options include LLC, sole proprietorship, branch office, or free zone establishment.

Step 4: Get Initial Approval
Submit business plan, passport copies, and application form.

Step 5: Secure Office Space
Lease a physical office or opt for a flexi-desk package in a Free Zone.

Step 6: Draft and Sign Legal Documents
Prepare the Memorandum of Association (MOA) and tenancy contract (Ejari for mainland).

Step 7: Pay Fees and Collect License
Pay trade license issuance fees and collect your official license.

Step 8: Apply for Visas
Get investor, partner, and employee visas.

Step 9: Open a Corporate Bank Account
Choose a UAE-based bank that supports your business type.

Costs of Setting Up in 2025

• Mainland: AED 15,000–30,000+ depending on activity and visa quota.
• Free Zone: AED 8,000–25,000+ depending on package and facilities.

Which is Best for You?

• Choose Mainland if you want unrestricted market access, government contracts, or unlimited visas.
• Choose Free Zone if you want 100% ownership, cost efficiency, and sector-focused benefits.

FAQs

1. Can I upgrade from Free Zone to Mainland?
Yes, with proper approvals and restructuring.

2. How long does it take to start a company in Dubai?
Typically 5–15 working days if all documents are ready.

3. Do I need a local sponsor?
Not for most business activities after recent ownership law changes.

4. Can I have multiple business activities under one license?
Yes, subject to approval from the relevant authority.

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