Setting up in the UAE is more than obtaining a business license: choosing between Free Zone and Mainland determines your tax regime, operational scope, and long-term sustainability. At GEOTAX, we guide every step of your incorporation with legal expertise and strategic tax vision.
Dubai offers two incorporation regimes: Free Zone (100% foreign ownership, QFZP 0% tax, regulated activities) and Mainland (local market access, DED license, 9% Corporate Tax). Since Executive Council Resolution No. 11/2025, dual licensing allows combining both regimes. The optimal choice depends on your activity type, target market, and overall tax strategy.
A Free Zone is a demarcated geographical area in the UAE where the legal and tax regime deviates from mainland rules. Companies operating in Free Zones enjoy substantial advantages:
A Mainland entity operates in the continental zones of Dubai and the UAE under the general Emirati regime:
| Criteria | Free Zone | Mainland |
|---|---|---|
| Foreign Ownership | 100% possible | 100% for most activities (FDL 26/2020); restrictions for strategic activities |
| Local Market Access | Restricted, 0-10% revenue | Unlimited |
| Tax Rate (QFZP/Mainland) | 0% qualifying income, 9% other | 9% (from 375k AED) |
| Annual Costs | 5,000-15,000 AED | 3,000-8,000 AED |
| Economic Substance | Mandatory (offices, staff) | Flexible (virtual office possible) |
| France-UAE Treaty | Applicable (with restrictions) | Fully applicable |
Strategic Choice: Choose Free Zone if your model focuses on export, logistics, or finance, and you don't target the local market. Choose Mainland if you serve local clients or prefer flexibility and reduced costs.
Engaging a tax lawyer from the outset of structuring provides essential protection. Under professional privilege recognized by French and Emirati courts, advice provided and documents prepared in the attorney-client relationship cannot be disclosed to tax authorities without consent. This protection extends to articles of incorporation, strategic memoranda, and compliance analyses. This protection does not exist if you proceed alone.
The Memorandum of Association (MoA) must be drafted carefully to:
Setting up in the UAE does not erase French obligations. A tax lawyer integrating both jurisdictions ensures:
Estimated Duration: 1-2 weeks
Estimated Duration: 2-4 weeks
Estimated Duration: 2-4 weeks
In 2025, Dubai introduced the ability to hold simultaneous Free Zone and Mainland licenses under a single entity structure. This dual licensing model opens new operational strategies:
Dual licensing should not be presented as a simple juxtaposition of Free Zone and Mainland activities. Where a Free Zone entity carries on activities outside the Free Zone in the Emirate of Dubai, it must comply with the framework set by Executive Council Resolution No. 11 of 2025, including obtaining the appropriate title and maintaining separate financial records for activities carried on outside the Free Zone.
Dual licensing requires careful accounting separation to justify the dual regime benefit claim. Transfer pricing documentation between Free Zone and Mainland operations must comply with OECD guidelines. France-UAE treaty application becomes complex; advance ruling from FTA recommended.
Dual licensing is ideal if you combine export (Free Zone) and local services (Mainland), but demands rigorous documentation and professional tax management. Improper application risks penalty assessments and loss of 0% benefits.
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