# Free zone vs mainland company in the UAE: what the official sources say

> Where a free zone company can trade, how it can reach mainland customers, and which rules are federal, from UAE Government and Dubai sources.

Category: Basics · Reviewed 2026-09-02 · https://freezoneguide.com/guides/free-zone-vs-mainland

## Key takeaways

- The UAE Government portal states that free zone companies can be fully foreign-owned and can import, export and re-export freely.
- To sell to the UAE mainland, a free zone company must work through a licensed mainland distributor or set up a mainland branch or company, according to the same portal.
- In Dubai, Executive Council Resolution 11 of 2025 sets the licences and permits for free zone companies operating on the mainland.
- Corporate tax is federal; the Qualifying Free Zone Person regime has conditions set by the FTA and Ministry of Finance.
- Mainland licensing and ownership rules for your activity sit with the emirate's economic department; check with it directly.

The biggest practical difference between a free zone company and a mainland company is **where it can trade**. The UAE Government portal states that free zone companies can be fully foreign-owned and can import, export and re-export with generally no restrictions, but that access to the mainland market is regulated: to sell locally, a free zone company must work through a licensed mainland distributor or set up a mainland branch or company. Mainland companies are licensed by the economic department of their emirate, which sets the rules for each activity.


_Live data · figures as published by each zone · Verified on 2026-10-24 from tax.gov.ae, ancfz.ae and 7 more official sources_

| Free zone | Emirate | Lowest package (yr 1) | Licence fee from | Max visa quota | Min. office | Incorporation |
| --- | --- | --- | --- | --- | --- | --- |
| [Sharjah Research, Technology and Innovation Park Free Zone](https://freezoneguide.com/uae/sharjah/srtip) | Sharjah | AED 3,999 | AED 3,999 | 2 | Not published | 7 days |
| [Ajman NuVentures Centre Free Zone](https://freezoneguide.com/uae/ajman/ancfz) | Ajman | AED 4,888 | AED 4,888 | 0 | Flexi-desk | 1 day |
| [Ajman Media City Free Zone](https://freezoneguide.com/uae/ajman/ajman-media-city) | Ajman | AED 4,999 | AED 4,999 | 3 | Flexi-desk | Not published |
| [Dubai Silicon Oasis](https://freezoneguide.com/uae/dubai/dso) | Dubai | Not published | AED 5,000 | 3 | Flexi-desk | Not published |
| [Jebel Ali Free Zone Authority (Jafza)](https://freezoneguide.com/uae/dubai/jafza) | Dubai | Not published | AED 5,000 | Not published | Flexi-desk | 3 days |
| [Sharjah Media City Free Zone (Shams)](https://freezoneguide.com/uae/sharjah/shams) | Sharjah | AED 5,760 | AED 5,385 | Not published | Flexi-desk | 1 day |

The table shows the lowest package each free zone publishes. See [how we verify](/how-we-verify) for where the data comes from.

## What the official sources say

**Trade and customs.** According to the UAE Government portal, goods imported into a free zone carry 0% customs duty, goods stored in a free zone for re-export carry no duty, and duty becomes due only when goods move into the mainland market.

**Selling to the mainland.** The same page says a free zone company selling goods or services locally must use a licensed mainland distributor or establish a mainland branch or company, and that direct mainland sales are generally not permitted without mainland licences or approvals.

**Dubai's mainland permits.** Dubai Executive Council Resolution 11 of 2025 lets a Dubai free zone company apply to the Department of Economy and Tourism for a branch licence within the emirate, a branch licence operating out of the free zone (AED 10,000 a year), or a temporary permit of up to six months for specific activities (AED 5,000). It needs the free zone authority's approval and separate financial records for mainland activity, and it does not apply to financial establishments licensed in the DIFC. Some zones also publish their own dual-licence arrangements; check each zone page.

**Regulator.** Each free zone has its own licensing authority. Mainland companies are licensed by the economic department of their emirate.

## Corporate tax

Corporate tax is federal and applies to free zone and mainland companies. Under the Qualifying Free Zone Person regime, a free zone company that meets every condition pays 0% on its Qualifying Income and 9% on other taxable income. The FTA's guide lists the conditions, including adequate substance in the free zone, audited financial statements, not electing for the standard rules, and staying within the de minimis limit on non-qualifying revenue. Ministerial Decision 229 of 2025 lists which activities qualify and which are excluded.

Whether the regime benefits you depends on your activities and income, so take advice before choosing on tax grounds. See the [Qualifying Free Zone Person guide](/guides/qualifying-free-zone-person-corporate-tax) and the [VAT Designated Zones guide](/guides/vat-designated-zones).


_IFZA vs Meydan Free Zone vs SHAMS · live data · Verified on 2026-10-24 from meydanfz.ae, shamsfz.ae and 2 more official sources_

|  | IFZA | Meydan Free Zone | SHAMS |
| --- | --- | --- | --- |
| Solo, no visa (year 1) | Not published | AED 12,500 | AED 5,760 |
| Founder + 1 visa (year 1) | Not published | AED 14,350 | Not published |
| Team, 3 visas (year 1) | Not published | AED 18,050 | Not published |
| Lowest package of any size (year 1) | Not published | AED 12,500 (Regular LLC-FZ licence - 0 visa) | AED 5,760 (Media Package) |
| Lowest licence fee | Not published | AED 12,500 | AED 5,385 |
| Largest visa quota in a published package | Not published | 3 | Not published |
| Minimum office | Not published | Flexi-desk | Flexi-desk |
| Minimum share capital | AED 1 | Not published | Not published |
| Incorporation time (stated by the zone) | Not published | 1 day | 1 day |
| On the FTA VAT Designated Zone list | No | No | No |
| Emirate | Dubai | Dubai | Sharjah |

[Full comparison](https://freezoneguide.com/uae/compare/custom?z=ifza&z=meydan&z=shams)

## Questions that decide it

| Question | Why it matters |
|---|---|
| Where are most of your customers: abroad, in free zones, or on the mainland? | Mainland sales from a free zone need a distributor, branch or mainland licence. |
| Do you need a shop, clinic, showroom or site on the mainland? | Premises outside the zone need a licence from the authority where they are. |
| Which of your activities would be qualifying or excluded under Ministerial Decision 229 of 2025? | This affects whether the free zone corporate tax regime applies to your income. |
| Does your activity need approval from another authority? | Both routes may need it; ask the licensing authority. |


> Get a personalised shortlist in 2 minutes: https://freezoneguide.com/uae/find

## Combining the two

You do not always have to choose one or the other. The official routes include:

- **A licensed mainland distributor** selling your goods or services.
- **A mainland branch or company** alongside the free zone company.
- **In Dubai, a DET licence or permit** under Executive Council Resolution 11 of 2025.
- **A zone's own dual-licence arrangement**, where the zone publishes one.

Rules vary by zone and emirate, so get written confirmation from the authorities before relying on any of them.

## Next steps

If a free zone looks right, the next question is which one. Our guide to the [cheapest free zone in the UAE](/guides/cheapest-free-zone-uae) explains how to compare published packages, and the [free zone finder](/uae/find) builds a shortlist from your answers. You can also browse the [free zones list](/uae/free-zones) or compare pairs such as [DMCC vs IFZA](/uae/compare/dmcc-vs-ifza).

If mainland looks right, speak to the economic department of the emirate where you plan to operate, and to a tax adviser about your expected income mix.

## FAQ

### Can a free zone company be fully foreign-owned?

The UAE Government portal states that free zone companies can be fully owned by foreign investors.

### Can a free zone company sell to mainland customers?

The UAE Government portal states that, to sell goods or services locally, a free zone company must work through a licensed mainland distributor or establish a mainland branch or company, and that direct mainland sales generally need mainland licences or approvals. In Dubai, Executive Council Resolution 11 of 2025 sets out the licences and permits available.

### Is a free zone company tax-free?

No. Corporate tax applies to free zone companies. The 0% rate applies only to the Qualifying Income of a Qualifying Free Zone Person that meets every condition; other taxable income is taxed at 9%. See the Qualifying Free Zone Person guide.

### Can a mainland company be fully foreign-owned?

Ownership rules for mainland companies depend on the activity and are set out in the federal Commercial Companies Law and emirate rules. Check your activity with the economic department of the emirate where you plan to operate.

### Which is cheaper to set up?

Free zones publish package prices on their own channels, which we compare on this site. Mainland costs depend on the emirate, activity and premises; ask the economic department for the fees that apply.

## Sources

- [UAE Government portal: running a business in a free zone](https://u.ae/en/information-and-services/business/Doing-business/doing-business-in-free-zones/running-a-business-in-a-free-zone-) — Ownership, customs treatment and mainland access for free zone companies.
- [Dubai Executive Council Resolution No. 11 of 2025](https://dso.ae/documents/d/dubai-silicon-oasis/executive-council-resolution-no-11-of-2025-regulating-the-conduct-of-free-zone-establishments-activities) — Licences and permits for Dubai free zone establishments operating on the mainland.
- [FTA guide: Free Zone Persons (CTGFZP1, May 2024)](https://tax.gov.ae/Datafolder/Files/Guides/CT/Free%20Zone%20Persons%20-%2020%2005%202024%20final%20for%20GCD.pdf) — Qualifying Free Zone Person conditions.

## General information, not advice

This guide is general information about UAE rules and free zone requirements, based on official sources on the dates shown. It is not legal, tax, immigration, employment or financial advice, and reading it does not create an adviser relationship. Rules change and their effect depends on your circumstances: before you act, confirm with the relevant authority (the free zone, the Federal Tax Authority, ICP or GDRFA, or the Ministry of Human Resources and Emiratisation) or a professional licensed in the UAE.

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Source: FreezoneGuide (https://freezoneguide.com/). AED, as published by each zone on its official channels. Information collected from free-zone authorities and UAE government sources on the dates shown. Fees and rules change; the zone's current schedule prevails. Not legal, tax or financial advice.