Business Setup Consultants Top best 2025-2026 Dubai Guide
Dubai is famously known for becoming a global business hub and it keeps on cherishing the city with more and more opportunities. From entrepreneurs to foreign business owners thinking about business setup in Dubai should all be considering one simple question of where to set up their business. Whether it is in the Mainland or in a Free Zone. Both of the locations are considered to be dedicated areas with its own range of advantages and limitations. You need to look into each of the factors to determine the best suitable one for the business that you are going to establish in Dubai.
Mainland Business Setup
The mainland business in UAE is any company that is located anywhere other than the free zone areas. Many companies who are preferring the Dubai mainland have the goals to create a direct impact in the market. This will allow most of the big corporate companies and trading units to establish their companies here. The mainland business needs a local sponsor if you are not a resident. This can lead to a compromise in the ownership of the entity.
Advantages of Mainland Business
Geographical Merit: The Dubai Mainland businesses are going to take place in the primary areas of the city. It has a vast number of business hotspots that will allow them to get the global attention to that specific spot. The business addresses in these areas are very much demanded in the current scenario.
Choices for Business Activities: the resources and business activities around the place can give you a wide range of options in your front to choose which one you need to indulge in next.
Government Contracts: Mainland companies are only allowed to bid and call for tender in the government projects they are coming with. This is very much exclusive and many companies can take advantage of the situation.
Limitations of Mainland Business
Requirement of Local Sponsor: getting a business in Dubai mainland requires you to find a local sponsor if you are not a resident. And you need to move 51% of the shares to his name in order to consider him as a local sponsor. So finding a trusting local sponsor can be a tiring process.
Leasing or renting office space: After you find the right location, you have to set up an office. And for her it will be too expensive to rent a small office block because of the value of the area.
Free Zone Business Setup
Free zones are specific areas inside Dubai that are working in its own level of law jurisdictions and business orientations. Now there are more than 40 free zones in the UAE. They work with their own governing bodies which implement laws and policies accordingly. Many of the entrepreneurs and foreign business owners are eyeing on the free zone because of its long list of benefits. The complete ownership for foreign businesses and tax reduction schemes for startups has made it the proper place for modern business settlements.
Advantage of Free Zone Business
Total ownership: the complete ownership policy implemented in the area is attracting many businesses from the rest of the world to come over and establish their company.
Tax Reduction: the tax policy in different free zones is different from one another. But they commonly deduct tax from startups. There is a fair barrier for tax reduction in terms of foreign companies as well.
Faster operations: the registration and setting up process is comparably faster and efficient than the other options. They lay out every procedure in a simple and flexible manner to understand.
Limitations of Free Zone Business
Restricted Market Access: unlike the mainland business who can get direct involvement in the market and trading, the free zones companies will be restricted from that.
Limitation in Business Activity: the unique quality of legal regulation for each free zone made it limit the overall business operation with free zones one another.
Which Jurisdiction Should You Choose? Determine Your Business ActivitiesUnderstanding all the major features of both mainland and free zone business setups is all there is. If you need to take your business activities and have to be practically involved in the trading and marketing system you can choose mainland business. If you want to experience the full ownership of your company and enjoy tax reduction for every profit you make, Free Zones are the best.
Determine Your Business ActivitiesUnderstanding all the major features of both mainland and free zone business setups is all there is. If you need to take your business activities and have to be practically involved in the trading and marketing system you can choose mainland business. If you want to experience the full ownership of your company and enjoy tax reduction for every profit you make, Free Zones are the best.
Analyze Your BudgetCost management is a serious matter to consider in the mainland because it will be expensive to run your business in the best business atmosphere in Dubai. But in terms of free zones, you can control the expense with a lot of benefits that fits perfectly.
Consider the Long Term Business ObjectivesHaving a business plan will enable you to distinguish your short term goals with long term goals. These are necessary to consider from the initial stage. This can determine your position in the current business lifestyle in Dubai. Plan about the trading options and market accessibility. The location plays a major factor in that and the legal aspect of the area can impact your business operations.
Dubai Free zone vs. Dubai Mainland Jurisdiction: Key Differences (2025-2026)
| Free Zone | Mainland | |
|---|---|---|
| Ownership | 100% ownership | 100% ownership for specific business activities. Otherwise a local sponsor with 51% share is needed. |
| Local Sponsor / Local Service Agent (LSA) | Not required | Option Available |
| Business scope | Within free zones, Designated free zone & Outside UAE | Mainland (Onshore), Free Zone, Outside UAE |
| Shareholders | 2 - 50 | Minimum of 2. Seek Consultation with Bizvise Expert |
| Corporate Shareholding | Can be done | Can be done |
| Setup time | 5 - 7 Working days | 5 - 7 Working days |
| Setup procedure | 100% remote | Requires physical presence or Power Of Attorney of UAE resident |
| Registered Office Address | Virtual / Physical Space | Physical Space |
| Government approvals | Free zone authority and additional approvals as required by the activity | Dubai Economy and Tourism (DET) and other additional approvals as required by the activity. |
| Licensing Authority | Respective Free Zone Authority | Dubai Economy and Tourism (DET) previously known as DED |
| Residence eligibility | Depend of Visa Allocation as per License Package opted | Unlimited |
| Residence Process completion | 10 – 15 Working days | 10 – 15 Working days |
| Residence Visa for Main Applicant | Digital eResidence Visa | Digital eResidence Visa |
| Residence Visa for Family | Yes | Yes |
| Residence Card (Emirates ID) | Digital and Physical Card | Digital and Physical Card |
| Employment Laws | Free Zone Laws | Regulated by UAE labour law (MoHRE) |
| Wage Protection System (WPS) | Free Zone Laws | WPS UAE labour System - MoHRE |
| Involuntary Loss of Employment (ILOE) Applicability | Yes | Yes |
| Employee Health Insurance | Yes | Yes |
| End-of-service benefits | Yes | Yes |
| License Renewal | One Month Prior Expiry | One Month Prior Expiry |
| Amendments Requests | Yes | Yes |
| Liquidation or Business Strike off | Two Month Prior | Two Month Prior |
| Ease of Business bank account opening | Less flexibility compared to the mainland. Some free zones are deemed more high risk by UAE banks | More flexibility for mainland businesses if Economic Substance and Office space can be shown |
| UAE Corporate Tax (CT) Mandatory Registration Requirement | YES | YES |
| UAE Corporate Tax on Net Profits | 0% | 9% |
| UAE Value Added Tax (VAT) Mandatory Registration Requirement above AED 375,000 | NO | YES |
| VAT on Transactions | 0% or 5% depending on scope of Transaction | 5% |
| IMPORT Tax on CIF | 0% Free Zone to Free Zone, 5% Free Zone to Mainland | 5% Taxation |
| UAE Personal / Wealth Tax / Estate Tax / Net worth Tax / Gift Tax / Inheritance Tax | 0% | 0% |
| UAE Tax Residency Certificate After One 1 Year of Incorporation in Dubai or UAE to avoid double taxation | YES | YES |
| Ultimate Beneficial Ownership / Owners (UBO) Declaration | Yes | Yes |
| Financial Audit Requirement | Yes | Yes |
| Re-domiciliation into the UAE / Migration | Yes | Yes |
| Regulatory & Compliance | Yes | Yes |
By differentiating both Mainland and free zone businesses you can get the required information on both these business setups. Understanding the key benefits of both of them is enough to make a suitable decision that goes perfectly well with your business plan. To get detailed information and help with the procedures you can get in touch with business setup company like Bizvise to get the required guidance.