Guide · setting up a company

UAE free zone vs mainland company: setting up a company

Costs, registration time, destination taxes and yearly duties side by side, from the same official data as the setup cost calculator.

In the United Arab Emirates a founder can set up a company in a free zone, as an FZE, FZCO or FZ-LLC, or on the mainland, for example as a limited liability company in Dubai. Both are UAE companies under the same federal tax rules. The differences show up in what firms charge, what each package covers, how quickly the licence is issued, how much capital is asked for and what the company files each year.

This page puts the official facts for each route next to each other, each with its source and the date it was read. It does not say which route to pick. That depends on where you live, where the company is run from, who its customers are and what it earns. The tax picture also continues at home. Where you live may treat the dividends you are paid as taxable income, and its controlled foreign company rules can sometimes count the company’s own profits as yours for tax purposes as well.

At a glance

Free zone company (FZE, FZCO or FZ-LLC)Mainland company (Dubai, limited liability company)
Company typeFree zone company (FZE, FZCO or FZ-LLC)Mainland company (Dubai, limited liability company)
Official fees at setupIncluded in firms' packagesIncluded in firms' packages
Official fees every yearIncluded in firms' packagesAED 600
Company formation by a firmAED 5,500 to AED 11,000 one-offAED 11,000 to AED 18,500 one-off
Accounting and annual accountsAED 5,990 to AED 11,990 per yearAED 5,990 to AED 11,990 per year
Registration timeAbout 1 dayNot published
Minimum share capitalRAKEZ: minimum share capital of an FZ-LLC AED 10,000, higher for some activities; Meydan Free Zone requires no paid-up share capitalNo minimum set by the Commercial Companies Law: capital must be sufficient for the company's objects and paid in full at incorporation
Corporate tax0% up to AED 375,000 of taxable income, 9% above; 0% on qualifying income of a Qualifying Free Zone Person, with conditions0% up to AED 375,000 of taxable income, 9% above; 0% on qualifying income of a Qualifying Free Zone Person, with conditions
Tax on dividends to a non-resident individual0% withholding on payments to non-residents0% withholding on payments to non-residents
VAT5%; registration above AED 375,000 of taxable supplies (the threshold does not apply to foreign businesses)5%; registration above AED 375,000 of taxable supplies (the threshold does not apply to foreign businesses)

Firms' figures are starting prices published by firms on Accountanty (the lower to the upper quartile with at least 8 firms; "from" with 5 to 7; on request below 5). Tax lines are summaries: the full rules and sources are further down.

Cost to set up and run the company

The calculator's estimate for each company type with its default services: company formation, accounting and the services the law requires.

Free zone company (FZE, FZCO or FZ-LLC)

Setup cost AED 5,500 to 11,000 about EUR 1,340 to 2,670
Every year AED 5,990 to 11,990 about EUR 1,460 to 2,910
Open the calculator for United Arab Emirates

Mainland company (Dubai, limited liability company)

Setup cost AED 11,000 to 18,500 about EUR 2,670 to 4,500
Every year AED 6,590 to 12,590 about EUR 1,600 to 3,060
Open the calculator for United Arab Emirates

Taxes on the destination side

Your country of residence may tax the dividends you receive, and it may also tax the company's profits under its rules on foreign companies controlled by its residents. A company managed from your country may be treated as resident there. This is general information, not tax advice.

Free zone company (FZE, FZCO or FZ-LLC)

Corporate tax

  • Corporate tax 0% on the part of taxable income up to AED 375,000. mof.gov.ae
  • Corporate tax 9% on taxable income above AED 375,000. mof.gov.ae
  • A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other taxable income; it must keep adequate substance in the UAE, earn qualifying income and meet the transfer pricing and audited accounts rules. mof.gov.ae
  • Small Business Relief: a resident company with revenue of AED 3,000,000 or less in the current and each previous tax period may elect to be treated as having no taxable income. mof.gov.ae
  • Small Business Relief applies to tax periods ending on or before 31 December 2029. mof.gov.ae

Tax on dividends paid abroad

  • Withholding tax on UAE-sourced income of non-residents without a permanent establishment is 0%. mof.gov.ae

VAT

  • VAT standard rate 5%. mof.gov.ae
  • VAT registration is mandatory above AED 375,000 and voluntary from AED 187,500 of taxable supplies, imports or expenses in 12 months; the mandatory threshold does not apply to foreign businesses. tax.gov.ae

Example: profit of AED 411,500, all paid out

Standard rates (0% up to AED 375,000, 9% above)
Corporate taxAED 3,285 (0.8%)
Tax withheld on the dividendAED 0
Dividend received, before any tax in your countryAED 408,215

Mainland company (Dubai, limited liability company)

Corporate tax

  • Corporate tax 0% on the part of taxable income up to AED 375,000. mof.gov.ae
  • Corporate tax 9% on taxable income above AED 375,000. mof.gov.ae
  • A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other taxable income; it must keep adequate substance in the UAE, earn qualifying income and meet the transfer pricing and audited accounts rules. mof.gov.ae
  • Small Business Relief: a resident company with revenue of AED 3,000,000 or less in the current and each previous tax period may elect to be treated as having no taxable income. mof.gov.ae
  • Small Business Relief applies to tax periods ending on or before 31 December 2029. mof.gov.ae

Tax on dividends paid abroad

  • Withholding tax on UAE-sourced income of non-residents without a permanent establishment is 0%. mof.gov.ae

VAT

  • VAT standard rate 5%. mof.gov.ae
  • VAT registration is mandatory above AED 375,000 and voluntary from AED 187,500 of taxable supplies, imports or expenses in 12 months; the mandatory threshold does not apply to foreign businesses. tax.gov.ae

Example: profit of AED 411,500, all paid out

Standard rates (0% up to AED 375,000, 9% above)
Corporate taxAED 3,285 (0.8%)
Tax withheld on the dividendAED 0
Dividend received, before any tax in your countryAED 408,215

Destination taxes only, before tax treaties and before any tax in your country of residence. Assumption: one shareholder, an individual not resident in the destination, holding 100% of the company; EUR 100,000 converted at the ECB rate. Try your own figure in the calculator.

Registration: steps and time

Free zone company (FZE, FZCO or FZ-LLC)

About 1 day. Meydan Free Zone: standard applications typically completed within 24 hours, depending on the activity and documents.

  1. Determine the nature of the business activity moet.gov.ae
  2. Determine the company's legal structure moet.gov.ae
  3. Register the trade name moet.gov.ae
  4. Select the business space and location moet.gov.ae
  5. Obtain the initial approval moet.gov.ae
  6. Register and pay the fees moet.gov.ae
  7. Register for corporate tax within three months of incorporation tax.gov.ae

Mainland company (Dubai, limited liability company)

Not published. The federal Basher platform states a business can be established online in 15 minutes; the page does not say this applies to every emirate or activity.

  1. Determine the nature of the business activity moet.gov.ae
  2. Determine the company's legal structure moet.gov.ae
  3. Register the trade name moet.gov.ae
  4. Select the business space and location moet.gov.ae
  5. Obtain the initial approval moet.gov.ae
  6. Register and pay the fees moet.gov.ae
  7. Register for corporate tax within three months of incorporation tax.gov.ae

Every year after registration

Free zone company (FZE, FZCO or FZ-LLC)

  • Corporate tax return within 9 months from the end of the tax period mof.gov.ae
  • Late corporate tax registration carries an administrative penalty of AED 10,000 mof.gov.ae
  • Records and documents kept for 7 years after the end of the tax period mof.gov.ae
  • Audited financial statements required for a Qualifying Free Zone Person and for revenue over AED 50,000,000 tax.gov.ae
  • Mainland LLC: accounts audited every year by one or more auditors elected by the partners moet.gov.ae
  • RAKEZ: audited financial statements by a RAKEZ approved auditor within six months of the financial year end; late filing fine AED 2,500 rakez.com
  • DMCC: accounts approved by the directors and reported on by a DMCCA approved auditor within six months of the financial year end dmcc.ae
  • RAKEZ: licences are generally valid for one year; late renewal penalty AED 50 per day rakez.com

Mainland company (Dubai, limited liability company)

  • Corporate tax return within 9 months from the end of the tax period mof.gov.ae
  • Late corporate tax registration carries an administrative penalty of AED 10,000 mof.gov.ae
  • Records and documents kept for 7 years after the end of the tax period mof.gov.ae
  • Audited financial statements required for a Qualifying Free Zone Person and for revenue over AED 50,000,000 tax.gov.ae
  • Mainland LLC: accounts audited every year by one or more auditors elected by the partners moet.gov.ae
  • RAKEZ: audited financial statements by a RAKEZ approved auditor within six months of the financial year end; late filing fine AED 2,500 rakez.com
  • DMCC: accounts approved by the directors and reported on by a DMCCA approved auditor within six months of the financial year end dmcc.ae
  • RAKEZ: licences are generally valid for one year; late renewal penalty AED 50 per day rakez.com

Documents and requirements

Free zone company (FZE, FZCO or FZ-LLC)

  • Mainland: a memorandum of association (MOA) or a local service agent agreement (LSA) moet.gov.ae
  • DMCC: articles of association, prepared as part of the registration dmcc.ae
  • Beneficial owner records and the register of partners or shareholders, filed with the registrar within 60 days of licensing dda.gov.ae
  • Foreign investors can fully own mainland companies; activities of strategic impact may face restrictions on foreign ownership u.ae
  • One person may incorporate and own a mainland limited liability company moet.gov.ae
  • In a free zone, an FZE allows a single shareholder and an FZCO allows several shareholders jafza.ae
  • A beneficial owner is a natural person holding 25% or more of the capital or voting rights, directly or indirectly dda.gov.ae
  • Meydan Free Zone: no mandatory requirement to lease a physical office meydanfz.ae

Mainland company (Dubai, limited liability company)

  • Mainland: a memorandum of association (MOA) or a local service agent agreement (LSA) moet.gov.ae
  • DMCC: articles of association, prepared as part of the registration dmcc.ae
  • Beneficial owner records and the register of partners or shareholders, filed with the registrar within 60 days of licensing dda.gov.ae
  • Foreign investors can fully own mainland companies; activities of strategic impact may face restrictions on foreign ownership u.ae
  • One person may incorporate and own a mainland limited liability company moet.gov.ae
  • In a free zone, an FZE allows a single shareholder and an FZCO allows several shareholders jafza.ae
  • A beneficial owner is a natural person holding 25% or more of the capital or voting rights, directly or indirectly dda.gov.ae
  • Meydan Free Zone: no mandatory requirement to lease a physical office meydanfz.ae

What to weigh between a free zone and the mainland

Firms’ packages. On Accountanty, 94 firms publish a starting price for a free zone company, from AED 5,500 to AED 11,000. For a mainland company, 73 firms publish prices from AED 11,000 to AED 18,500. Firms’ packages usually include the licence, so the official fees are listed for reference and not added. For a free zone these are RAKEZ Basic at AED 6,000, Meydan at AED 12,500 and DMCC at AED 35,484. Visas, medical tests and the Emirates ID cost extra unless a package says otherwise.

Fees outside the package. For the mainland, the yearly licence renewal of AED 600 under the Dubai 2011 schedule is added to the yearly figure. Chamber, municipality and Knowledge and Innovation Dirham fees and the office lease are left out, because no current official amount is published. RAKEZ publishes no renewal amount, but a late renewal there costs AED 50 a day.

Time and capital. Meydan Free Zone says standard applications are typically completed within 24 hours, depending on the activity and documents. For the mainland no time is published; the federal Basher platform says a business can be set up online in 15 minutes, without saying this covers every emirate or activity. RAKEZ asks for at least AED 10,000 of share capital for an FZ-LLC, and Meydan asks for no paid-up capital. On the mainland the law sets no minimum, but the capital must suit the company’s objects and be paid in full at incorporation.

Owners and offices. Foreign investors can fully own a mainland company, though activities of strategic impact may face limits on foreign ownership, and one person may own a mainland LLC. In a free zone an FZE has one shareholder and an FZCO can have several. Meydan does not require a physical office lease. A mainland company files a memorandum of association or a local service agent agreement.

Every year. The tax rules match on both routes: 0% on taxable income up to AED 375,000 and 9% above, and the corporate tax return is due within 9 months of the period end on both routes too. In a free zone, a company that qualifies as a Qualifying Free Zone Person pays 0% on qualifying income if it meets the substance, transfer pricing and audit rules. A mainland LLC has its accounts audited every year. RAKEZ and DMCC companies file audited accounts within six months of the year end.

Next steps

United Arab Emirates

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United Arab Emirates

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UAE free zone vs mainland company: questions and answers

Do free zone and mainland companies pay different taxes in the UAE?

The corporate tax rates are the same: 0% on taxable income up to AED 375,000 and 9% above. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other taxable income, if it keeps adequate substance in the UAE and meets the transfer pricing and audited accounts rules. VAT is 5% on both routes.

Why are official fees not added to the firms' prices?

Firms' free zone and mainland packages usually include the licence. Adding the official package or licence fees on top would count them twice, so they are listed for reference only. For the mainland the yearly licence renewal of AED 600 is added. Visas, medical tests and the Emirates ID are extra unless a package says otherwise.

How long does it take to set up a free zone or mainland company?

Meydan Free Zone says standard applications are typically completed within 24 hours, depending on the activity and documents. No time is published for the mainland. The federal Basher platform says a business can be set up online in 15 minutes, but the page does not say this applies to every emirate or activity.

Can a foreigner own 100% of a UAE company?

Foreign investors can fully own mainland companies, although activities of strategic impact may face restrictions on foreign ownership. One person may incorporate and own a mainland LLC. In a free zone, an FZE allows a single shareholder and an FZCO allows several. Beneficial owner records go to the registrar within 60 days of licensing.

Which is better for my company, a free zone or the mainland?

This page does not rank the two routes. The answer turns on where you live, where the company is managed, who its customers are and what income it earns. Read the facts above, enter your own figures in the calculator for each route, and ask firms that offer both for a quote and a view on your case.

Sources and notes

  1. meydanfz.ae read 2026-10-23
  2. rakez.com read 2026-10-23
  3. rakez.com read 2026-10-23
  4. meydanfz.ae read 2026-10-23
  5. dmcc.ae read 2026-10-23
  6. u.ae read 2026-10-23
  7. moet.gov.ae read 2026-10-23
  8. dlp.dubai.gov.ae read 2026-10-23
  9. moet.gov.ae read 2026-10-13
  10. tax.gov.ae read 2026-10-23
  11. dda.gov.ae read 2026-10-13
  12. u.ae read 2026-10-13
  13. jafza.ae read 2026-10-13
  14. mof.gov.ae read 2026-10-13
  15. mof.gov.ae read 2026-10-23
  16. mof.gov.ae read 2026-10-13
  17. tax.gov.ae read 2026-10-23
  18. dmcc.ae read 2026-10-23
  19. mof.gov.ae read 2026-10-23
  20. mof.gov.ae read 2026-10-23
  21. mof.gov.ae read 2026-10-23
  22. mof.gov.ae read 2026-10-23
  23. tax.gov.ae read 2026-10-23

Official figures checked up to 2026-10-23. General information, not legal or tax advice: check the official sources and confirm costs with a firm before you act.