Estimated Annual Profit
AED 800,000
Mainland saves AED 28,250 in first year costs
Based on license and tax costs (excluding visa costs which depend on headcount)
| Feature | Mainland | Free Zone |
|---|---|---|
| Corporate Tax | 9% (above AED 375K) | 0% (qualifying) |
| Local Trading | Yes | Restricted |
| Foreign Ownership | 100% (since 2021) | 100% |
| Office Requirement | Physical office | Flexi-desk available |
| Customs Duty | 5% | 0% (within zone) |
Understanding free zones vs mainland in the UAE
What is a free zone?
A free zone is a designated area in the UAE that offers special tax and business incentives to attract foreign investment. Free zones offer 100% foreign ownership, 0% corporate tax on qualifying income, 100% repatriation of profits, no currency restrictions, and simplified customs procedures. Each free zone has its own authority and regulations. There are over 40 free zones across the UAE, each specializing in different industries such as media, technology, finance, logistics, and healthcare.
Which free zones are most popular?
The most popular free zones include: Dubai Multi Commodities Centre (DMCC) for trading companies, Dubai Internet City and Dubai Media City for tech and media, Jebel Ali Free Zone (JAFZA) for logistics and manufacturing, Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) for financial services, and Sharjah Media City (SHAMS) for freelancers and small businesses. The choice depends on your business activity, budget, and operational needs.
Can free zone companies trade locally?
Free zone companies face restrictions on trading directly with the UAE mainland market. To sell products or services within the UAE mainland, a free zone company typically needs to appoint a mainland distributor or agent, establish a mainland branch, or work through a dual-license arrangement. However, services can sometimes be provided to mainland clients depending on the free zone and activity type. Recent regulatory changes have eased some of these restrictions.
Note: Costs shown are approximate and vary by free zone, business activity, and specific requirements. Consult a business setup adviser for accurate quotes.
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Disclaimer: This calculator provides estimates based on current UAE Federal Tax Authority rates and MOHRE labour law provisions. It does not constitute professional tax, financial, or legal advice. Your actual entitlements may differ depending on your individual circumstances, employment contract, and applicable free zone regulations. Always consult a qualified adviser before making financial decisions. Read our terms