Basics
Guide
Dec 9, 2025
Free Zone or Mainland: How to choose the right structure for setting up your business in the United Arab Emirates?
When an entrepreneur decides to set up business in the United Arab Emirates, one question always comes up: should they set up their company in a Free Zone or on the Mainland? These two structures have coexisted for a long time, but their use has changed significantly. To shed light on the differences and help entrepreneurs make an informed choice, we spoke with Justine Basilio, a lawyer specializing in business and tax law.
This article summarizes the main points discussed in the video and provides a structured analysis to better understand the legal, tax, and operational issues involved in choosing between a Free Zone or Mainland license.
Free Zone and Mainland: origins and initial objectives
When an entrepreneur decides to set up business in the United Arab Emirates, one question always comes up: should they set up their company in a Free Zone or on the Mainland? These two structures have coexisted for a long time, but their use has changed significantly. To shed light on the differences and help entrepreneurs make an informed choice, we spoke with Justine Basilio, a lawyer specializing in business and tax law.
This article summarizes the main points discussed in the video and provides a structured analysis to better understand the legal, tax, and operational issues involved in choosing between a Free Zone or Mainland license.
The importance of office location
The geographical criterion remains one of the main differences between a Free Zone company and a Mainland company.
A company registered in a Free Zone cannot rent offices outside its zone. The contracts offered by certain business centers do not constitute a valid Ejari and are not recognized as a lease allowing for the justification of the company's premises.
In Mainland, the company can rent offices anywhere in the United Arab Emirates except in the Free Zone, provided that an Ejari is supplied when renewing its commercial license. This point is important, as circumventing these obligations exposes one to legal risks, especially in the event of inspections or lawsuits.
For entrepreneurs needing real commercial premises, shops, or offices accessible to their teams and clients, the Mainland license offers significantly greater flexibility.
Access to the local market and participation in tenders
The choice between Free Zone and Mainland also influences access to government markets. A Mainland company can respond to public tenders and work freely with local authorities.
Free Zone companies can only access these if their zone is specialized in the relevant sector. For example, a media company established in a Free Zone dedicated to the sector benefits from this right, but a company registered in a general Free Zone will not have access.
For businesses looking to work with public institutions, respond to tenders, or develop a strong presence in the region, Mainland is generally the most suitable structure.
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