Mainland UAE

Mainland in the UAE is also called an onshore company. It is licensed by the Department of Economic Development (DED) of the related emirate which is allowed to do business in the local market as well as outside the UAE without any restrictions.

Free Zone UAE

More than 40 free zones are there in the UAE and the company is allowed to do business inside the same free zone which is incorporated within a designated jurisdiction of the emirate. Entrepreneurs requiring tax optimization opt for a free zone formation. As various benefits and incentives are brought out by the free zone authorities to the businesses set up in the zone.

Mainland vs Free Zone Company in the UAE

Ownership

100 % owned by foreigners.

Office Space

Mainland : Physical office space of a minimum of 200 sq. ft is mandatory for any mainland company in the UAE.
Freezone : For a free zone company no office space is required where they can work without an office or can have virtual offices

Business Scope

Mainland : A mainland company is free to do business anywhere in the UAE. Business is allowed inside any free zone in the emirates.
Freezone : Business (manufacturing and selling) outside a free zone is not allowed by a free zone company setup is not usually allowed to business outside its free zone.

Audit

Mainland : An audit is prepared at the end of every financial year by the mainland companies.
Freezone : Auditing is not required for all FZ companies. A mandatory audit of accounts has to be dealt with by some forms of entities which includes free zone companies (FZCO) and free zone establishments (FZE).

Visas

Mainland : Depending on the size of the office/ work premises, a residence visa is given.
Freezone : Depending on the size of the office/ work premises, a residence visa is given.

Capital requirement

Mainland : According to the legal form of business, minimum capital requirements for mainland company formation vary .
Freezone : Minimum capital requirement depends on the emirate for a free zone company formation .

Govt Authorities for Company setup

Mainland : Permission from authorities like DED, Ministry of Labor (MIL), Dubai Municipality, Ministry of Interior (MOI) etc have to be taken.
Freezone : For approval of any company inside its jurisdiction, free zones have their own rules and outside the free zone they don’t require approvals from authorities.