Every business setup article online says "it depends on your needs." That is true but unhelpful. Here is a numbers-first comparison so you can model the real cost before you commit.
Mainland (Dubai DED): AED 15,000 to 30,000 or more for initial setup, AED 12,000 to 35,000 or more for annual renewal. You must lease physical office space and register it with Ejari. Virtual offices are not accepted for DED licenses.
Free zones: AED 5,000 to 20,000 or more for initial setup, AED 8,000 to 25,000 or more annually. Popular zones: DMCC starts at AED 25,000 or more, JAFZA at AED 30,000 or more, IFZA at AED 11,900 or more. Many zones offer flexi-desk and virtual office packages that bring the total lower than mainland in year one.
Mainland companies can trade freely across the entire UAE: sell to local consumers, sign contracts with any UAE business, bid on government tenders, and open retail locations in any emirate. Free zone companies are designed for international and zone-to-zone trade. If you want to invoice a mainland client, you typically need a local distributor or a separate mainland branch.
If 80 percent of your revenue will come from UAE clients, mainland is almost always the right call. If your clients are international and you operate digitally, free zones offer real savings.
Mainland ties visa allocation to office size, typically 1 visa per 10 to 12 square metres. A 200 sqm office gives you roughly 18 to 20 visas. Free zones offer set quotas per licence package: many start at 3 to 6 and scale with upgrades. If you are hiring fast, mainland gives more flexibility without licence upgrades.
Mainland pays 9 percent on taxable profits exceeding AED 375,000. Free zones can potentially pay 0 percent, but only if they qualify as a QFZP: adequate substance, qualifying activities, and income from non-mainland sources. Services to UAE mainland clients are taxed at 9 percent regardless. The tax gap is narrower than the marketing suggests.
Both mainland and free zone now permit 100 percent foreign ownership following the 2021 reforms. This is no longer a differentiator for most commercial activities.
Model two scenarios for 24 months. Add up licence fees, office rent, visa costs, PRO fees, and estimated tax. Then stress-test: what happens if you add 3 hires in month 8, or need to invoice a government entity in month 14? The structure that handles those scenarios without a restructure is the right one.
We set up mainland and free zone entities daily. If you want a side-by-side cost model for your specific activity, tell us what you need and we will build it.
Tell us what you are setting up or renewing (trade license, visas, PRO, attestation, or drafting) and we will map the fastest compliant path.
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