Business jurisdictions in the UAE differ somewhat from those in Europe. In the UAE, jurisdictions determine and define a business entity’s ability to grow, trade, and operate successfully and smoothly. You’ve more than likely read about free zones, mainland, and offshore setups – and there’s common confusion around exactly what these three terms mean.
Each jurisdiction offers unique features, benefits, and limitations in market access, international trade, and taxation. That’s why choosing the right business structure matters in the UAE.
Mainland setup
Mainland companies are ideal for businesses aiming to operate freely across the UAE, deal directly with customers in the local market, and compete for government contracts. They are subject to UAE corporate tax and VAT, where applicable.
Key features:
- 100% foreign ownership across most sectors
- Can trade anywhere in the UAE (and GCC) and internationally
- Eligible to apply for government contracts
- Requires a physical office in the UAE mainland
- Qualifies for visa sponsorship (number is usually linked to office space)
- Needs approvals from the Department of Economic Development (DED) and other regulatory authorities
Free zone setup
Free zone companies also offer full ownership rights, come with tax advantages, and a simplified setup process. But these are geographically restricted to business within the free zone or with international markets.
Key features:
- 100% foreign ownership
- Restricted to trading within the free zone or internationally; cannot trade directly in the UAE mainland without a local agent/distributor or branch office
- A virtual office is possible for most business activities
- Visa quotas are based on your trade license type and office space (or virtual desk size)
- Usually exempt from tax and personal income tax
- Geared for specific industries (media, tech, finance, education, logistics, etc)
- Streamlined setup processes
- Licensed by the free zone authority (meaning fewer approvals needed)
- Best for import/export, international trade, and specialised sectors
Offshore setup
Offshore setups are primarily for international businesses and asset management (think: IP management and wealth management), while they are not permitted to trade or conduct business within the UAE itself. It offers these business types confidentiality and ownership benefits – but limited operational use domestically.
Key features:
- 100% foreign ownership
- Not allowed to conduct business within the UAE; only international business activities permitted
- No physical office required
- No visas provided
- Streamlined regulatory framework and compliance requirements
- While it is tax-exempt, it’s not allowed to engage in UAE business
- Best for asset holding, international trading, and confidential business structures
Which one’s right for you?
Free zone, mainland, or offshore setup? That depends on your business goals, residency plans, and industry type.
Free zone setups are perfect for businesses focused on international trade and cross-border activities. Activities such as import-export, re-export, and logistics. Remember, free zones are geared for specific industries, so businesses that would benefit from specialised industry-focused support, research, and infrastructure: tech startups, media companies (and even freelancers), medical companies, aviation, etc.
The best use cases for mainland setup include retail, hospitality, local trading, consulting, construction and infrastructure development, and government-focused sectors. It’s ideal for businesses that seek unrestricted access to the entire UAE market, where they can build a strong local credibility and reputation for expansion into other Gulf markets.
Offshore company setups are best suited for international investors and businesses looking for tax optimisation, confidentiality, and low-cost structures for global trading, asset holding, IP management, and protecting wealth.
How Servefast Advisory can help you
Choosing between a mainland, free zone, or offshore setup isn’t just a legal formality. It’s a strategic decision that shapes how your business operates, grows, and expands across the UAE and beyond.
At Servefast Advisory, we cut through the confusion and help you build the right foundation from the start. Whether you’re launching a retail brand, scaling a tech venture, or protecting global assets, we’ll guide you through every step – clearly, compliantly, and with your goals in mind.
Let’s make your UAE setup work for you. Talk to us today.