Mainland vs Free Zone vs Offshore: Best UAE Company Setup in 2025

Low taxes. Global reach. Built for business.

In 2025, the UAE stands out as one of the world’s top destinations for entrepreneurs and investors looking to scale fast. With world-class infrastructure, zero personal income tax, and a strategic location bridging East and West, it offers a launchpad like no other.

But before you get started, there’s one key decision to make: Mainland, Free Zone, or Offshore?

This choice affects everything, from who you can do business with to how you hire and where you can set up. In this guide, we’ll break down the differences, cut through the jargon, and help you choose the setup that aligns with your goals.

Understanding the Three Types of Company Setup

To keep things simple:

• Mainland companies are licensed by the Department of Economic Development (DED) and are authorized to operate throughout the entire UAE.
• Free Zone companies are based in designated areas with their own rules and focus, often industry-specific. You get full ownership and easy setup, but with some trading restrictions.
• Offshore companies are designed for international operations, holding assets, and managing investments. You cannot run a business or open a physical location in the UAE.

Let’s break each one down and look at how they work in practice.

Mainland Company Setup

If you want to do business across the UAE, whether opening shops, offering services, or working with government clients, the Mainland is the way to go. Before, foreign investors needed a local partner to own 51% of the company.

Now, they can own it fully. In 2025, most business activities now allow for 100% foreign ownership, making the Mainland structure much more appealing than before. You can do business anywhere in the UAE and even access the local market.

That includes renting office space anywhere, bidding for public contracts, and serving both individual customers and large companies. Mainland businesses also come with flexible visa options.

As your business grows, you can scale your team without hitting limits based on license type, though visa caps will still be tied to your office size. However, Mainland setups tend to be more complex.

There’s more paperwork, higher licensing costs, and additional approvals required. You’ll also need a physical office lease to complete the registration. But for businesses serious about long-term growth and market access within the UAE, it’s a strong, stable choice.

Free Zone Company Setup

Free Zones continue to attract thousands of entrepreneurs each year, and for good reason.

They offer 100% foreign ownership, no import or export duties within the zone, and often have simplified processes and startup-friendly packages. Each Free Zone tends to cater to specific sectors—like media, logistics, finance, or tech—so you’ll find one that suits your business model.

Some of the most popular Free Zones in 2025 include:

• DMCC (Dubai Multi Commodities Centre) focuses on trading and commodities businesses
• IFZA for general trading and professional services
• RAKEZ for manufacturing and startups
• Dubai Internet City for tech and software companies

Setup is usually fast and affordable. Many Free Zones offer shared workspaces, flexi-desks, and business support services. If you’re launching a consulting firm, tech startup, or digital agency, a Free Zone can offer all the infrastructure you need, with minimal hassle.

However, there’s a trade-off. Free Zone companies usually can’t sell directly in the UAE mainland unless they work with a local distributor or get special approval. So, if most of your clients are within the UAE or you want to open a store or showroom, you’ll run into limitations.

That said, some Free Zones now offer dual licenses that let you operate in the mainland through partnerships with the DED. It's a step toward bridging the gap, though not a full replacement for a proper mainland setup.

Offshore Company Setup

Offshore companies serve a very different purpose. They’re not meant for running a business in the UAE. Instead, they’re typically used for international trade, holding investments, or owning intellectual property.

You can use them to manage global operations or as part of a tax-efficient structure, but you can’t lease office space, hire local employees, or apply for UAE residence visas under this setup. Some of the main offshore jurisdictions in the UAE include:

• RAK ICC (Ras Al Khaimah International Corporate Centre)
• JAFZA Offshore (Jebel Ali Free Zone)
• Ajman Offshore

Offshore companies are low-cost, confidential, and easy to maintain. They’re a popular choice for global entrepreneurs looking to manage funds, reduce liability, or own assets.

If you aim to build a presence in the UAE market, then this structure isn't suitable for you.

Which One Should You Choose?

It depends entirely on your goals, customers, and how you plan to grow. Here’s a quick guide to help you think it through:

• Choose Mainland if you want full access to the UAE market, plan to open physical offices or shops, or want to work with local clients and government entities.
• Choose Free Zone if you’re launching a tech, services, or trading business focused on international markets or a specific niche. You’ll save on costs and enjoy a streamlined process.
• Choose Offshore if you don’t need to operate in the UAE but want a company structure for holding assets, managing global operations, or opening international bank accounts.

Avoid basing your decision on setup cost alone. A cheaper license may look appealing upfront, but might not support your business model in the long run. It's better to invest in the right structure from the beginning than to go through the cost and complexity of restructuring later.

What’s Changed in 2025?

There have been a few major updates recently that are worth keeping in mind:

Corporate Tax

A 9% corporate tax now applies on profits over AED 375,000. Many Free Zones still offer tax exemptions, but only for certain types of activities. Make sure to check whether your business qualifies.

Faster Digital Processes

Business registration, visa applications, and licensing have all become more digital. Many steps can now be completed online, which makes the setup quicker and easier.

Flexible Visa Options

Entrepreneurs now have access to new visa types, including freelance visas, remote work permits, and even long-term Golden Visas if you meet the criteria.

Dual Licensing Opportunities

Some Free Zones have partnered with local authorities to offer dual licenses. This gives you the flexibility to serve both Free Zone and mainland clients under certain conditions.

These changes make the UAE more accessible and efficient than ever for business owners looking to make their mark.

Mainland, Free Zone, or Offshore? Make the Right Move in 2025

Not sure which UAE setup fits your business goals? We make it simple.
At 10xM, we help entrepreneurs and investors choose the right structure, whether you want local market access, full ownership, or international reach.

Book your free consultation today and get expert advice tailored to your growth plans.