Author: Melban Mascarenhas
Published: May 28, 2025
Tags: Free Zone Company Dubai, Mainland vs Free Zone
A free zone company and a mainland company are two distinct business structures in the UAE, each offering its own regulatory framework, benefits, and limitations. If you're an entrepreneur or investor planning your business setup in Dubai or elsewhere in the UAE in 2025, this guide explains everything you need to know.
A mainland company is an onshore entity licensed by the Department of Economic Development (DED) of the respective emirate. These companies can freely operate across the UAE and internationally, without restrictions on trading within local markets.
While most business activities no longer require a UAE national partner, some regulated sectors may still require local involvement or approvals. Always check activity-specific regulations in 2025 to stay compliant.
A free zone company is established within a designated economic zone governed by a Free Zone Authority (FZA). The UAE now boasts 50+ free zones, each offering a wide range of business activities, fast-track licensing, and tailored infrastructure.
One of the most attractive benefits of a free zone setup in 2025 is 100% foreign ownership, even in professional and trading sectors, without needing a local partner.
Both mainland and free zone companies offer valuable advantages, but they cater to different business goals. Below is a comprehensive comparison:
| Aspect | Free Zone Company | Mainland Company |
|---|---|---|
| Ownership | 100% foreign ownership with no local sponsor required | As of 2025, most activities allow 100% foreign ownership, but a few still require UAE national shareholding or service agents |
| Location Flexibility | Must operate within the free zone area | Can establish offices anywhere across the UAE |
| Office Space Requirements | Many offer flexi-desk or virtual office options | Requires a physical office space, typically starting from 200 sq ft or more |
| Business Scope | Cannot trade directly in the local UAE market without a distributor | Can operate across all of the UAE without restrictions |
| Government Approvals | Handled entirely by the Free Zone Authority | Requires approvals from DED, Municipality, MoHRE, and others |
| Visa Allocation | Visa quota depends on license type and office space | No fixed limit; linked to office size and business activity |
| Capital Requirements | Varies by jurisdiction; often low or zero capital required | Defined by company structure and legal activity |
Mainland companies offer several strategic benefits for businesses planning to operate extensively within the UAE:
Free zone companies provide unique benefits particularly attractive to international entrepreneurs:
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