Understanding Business Registration in Free Zone, Mainland and Offshore: The Smart Way to Start in the UAE
November 22, 2022
November 14, 2025
June 28, 2025
November 14, 2025
Topic Summary
1. Jurisdictional Advantages and Business Activities
Each jurisdiction caters to different business activities and operational needs. Free Zones typically focus on import/export, technology, and service sectors with benefits like full foreign ownership and tax exemptions. Mainland companies allow broader business activities across the UAE, including direct trade with the local market. Offshore entities are primarily used for asset protection, international trade, and holding companies outside the UAE market.
2. Ownership and Licensing Requirements
Free Zones offer 100% foreign ownership without the need for a local partner, simplifying the establishment process. Mainland businesses may require a local Emirati partner or service agent, depending on the activity and legal form, although recent reforms have eased this for many sectors. Offshore companies are not permitted to conduct business within the UAE but enjoy confidentiality and tax efficiency.
3. Office Space and Physical Presence
Mainland companies must maintain a physical office space in the UAE to comply with legal and licensing obligations. Free Zone entities also require a flexi-desk or dedicated office within the respective Free Zone. Offshore companies, by contrast, do not require a physical presence, making them suitable for businesses needing minimal local infrastructure.
4. Taxation and Regulatory Compliance
Free Zone companies benefit from zero corporate and personal income taxes for a specific period, subject to renewal. Mainland businesses may be subject to UAE corporate tax, now introduced at a federal level, depending on revenues and activity. Offshore companies enjoy minimal reporting requirements and tax advantages but must not undertake business activities within the UAE.
Starting your own business in the UAE? It's important to understand the different jurisdiction types so you can choose the one that best suits your business activity. Registering your business can be complicated, however, the UAE accommodates every entrepreneurial structure and setup through three main economic jurisdictions:
- Free Zones
- UAE Mainland
- Offshore
At the end of the first half of 2020, the UAE had 405,000 companies, based on the valid business licenses statistics. Over the past four years, this number has grown to 1.021 million registered companies as of mid-2024, scoring a growth of 152%, according to the statistics of the UAE’s National Economic Register.
There are certain things to consider during the business registration in free zone and mainland, as well as offshore jurisdictions. The Free Zone is no doubt that the UAE is a gateway to business growth with its zero-tax policies and bustling environment that promotes technology-inbuilt business.
Mainland, Free Zone, and Offshore Companies: Everything You Need to Know About the Business Registration
These three types of jurisdictions each have their own pros and cons. It's crucial to gather proper information before initiating free zone vs mainland company registration.
Free Zones in Dubai offer great benefits for running a business. Meydan Free Zone stands out with added advantages like 100% foreign ownership in the UAE, no corporate tax, and a streamlined process for free zone business license in Dubai.
- Mainland
A business set up in the UAE mainland is deemed as an onshore company. The company is registered under the government authority which is the Department of Economic Development (DED). The relevant emirates DED will resort to handling the registration process.
A mainland company can trade across the UAE and internationally with fewer restrictions. - Free Zone
Free Zones are the acceleration of UAE’s economic growth, and these unique jurisdictions have their own regulations and governing bodies.
Free Zones can conduct business within the zone and globally. - Offshore
Offshore company is set up for international business activities, with no direct engagement in the UAE market. These companies benefit from tax advantages, full foreign ownership and fewer regulatory obligations, but they cannot operate within Dubai or the broader UAE.
Though offshore companies operate globally, they can be shareholders in free zone company setup in Dubai or mainland businesses.
Business Registration in Free Zone and Mainland: Key Differences and Requirements
Documents Required for a Business Set Up in Mainland, Free Zone and Offshore
Depending on your business type and structure, the setup process often involves dealing with multiple government bodies. Documents from outside the UAE must be notarised and legalised before submission. In free zone company setup in Dubai, translated and legalised documents are generally not required.
Free Zone, Mainland and Offshore: Choosing the best one for you
All three options offer different benefits based on your goals. Understanding these helps you make an informed choice for your mainland vs free zone business setup.
If you're looking for tax benefits and low company formation cost in UAE, Free Zones are ideal. Meydan Free Zone offers full ownership and profit repatriation. If asset protection is your priority, an offshore setup may be the better fit.
In Conclusion
Choosing the right jurisdiction for your business setup in UAE is a critical decision. Equip yourself with the right information before launching your venture
Meydan Free Zone gives you the advantage of digitalised registration, expert support, and the with new exclusive offering Fawri, you get an instant business license within 60 minutes.
Located in the very heart of Dubai, surrounded by easy networking and outstanding transport systems, Meydan Free Zone is bound to boost your business with its launch. Throughout the registration process, our team of experts are ready to listen to every question and request to make sure the registration process is void of any error.
FAQs
1. What is the difference between Mainland, Free Zone, and Offshore company setup in the UAE?
Mainland companies can operate across the UAE and abroad but require local approvals. Free Zone companies offer 100% foreign ownership in the UAE and tax benefits but operate mainly within the Free Zone and globally. Offshore companies are used for international business and asset protection and cannot operate in the UAE market directly.
2. Which is better for business setup in Dubai: Free Zone or Mainland?
If you want full ownership, tax benefits, and a simple digital setup, Free Zones like Meydan Free Zone are ideal. Trade license in Dubai mainland may involve more procedures and local regulations.
3. Can I own 100% of my company in the UAE as a foreigner?
Yes, in Free Zones like the Meydan Free Zone offer 100% foreign ownership in the UAE. UAE laws also now allow 100% ownership in many Mainland activities excluding a few strategic sectors.
4. How long does it take to get a business license in Meydan Free Zone?
With Meydan Free Zone’s Fawri service, you can get your trade license issued in just 60 minutes. The entire process is fully digital and hassle-free.
5. What documents are required to register a company in the UAE?
Documents vary by jurisdiction, but typically include passport copies, business plan, application form, and address proof. Offshore setups may need notarized and legalized documents from your home country.
6. How much does it cost to start a company in the Meydan Free Zone?
You can start a business in Meydan Free Zone from as low as AED 12,500, which includes the business license and flexi-desk access.
7. Can I open a business bank account with a Meydan Free Zone license?
Yes, Meydan Free Zone guarantees bank account opening with over 26 local and international banks and fintech providers, with a valid IBAN.
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