Best Jurisdictions to set up your business in UAE

Understanding Business Jurisdictions in the UAE

When setting up a business in the UAE, you’ll need to choose a jurisdiction that determines your company’s legal structure, ownership rights, and where you can operate. The four main options are Free Zones, Mainland, Freelance, and Offshore.

Free Zones

Free Zones is a designated area where foreign businesses can operate with benefits like 100% foreign ownership and simplified licensing procedures. Each Free Zone operates under its own authority and is usually tailored to support specific business sectors.

Key Benefits:

→100% foreign ownership (no local sponsor required).

→ Tax exemptions and customs duty benefits.

→Faster setup with minimal regulatory requirements.

→Specialised infrastructure for industries like tech, media, and logistics.

→No restrictions on capital or profit transfer.

Challenges:

Limited ability to trade directly with the UAE mainland without additional approvals or without a local distributor or branch.

Business operations are restricted to within the Free Zone or internationally.

Best for: E-commerce, consulting, media, tech, logistics, and international trade

Mainland

A Mainland company is an onshore entity registered with the relevant emirate’s government authority, with the trade license issued by the Department of Economic Development (DED) and allows full access to the UAE market. Recent reforms now permit 100% foreign ownership in many sectors.

Key Benefits:

→ Can operate anywhere in the UAE and internationally.

→ Eligible for government tenders and contracts.

→ No restrictions on trading with local businesses.

→ Ability to open multiple branches and rent office space anywhere.

Challenges:

Higher setup costs compared to Free Zones.

Some business activities still require a local sponsor.

Best for: Retail, restaurants, professional services, corporate offices, and businesses needing direct UAE market access

Freelance License

A freelance license is a cost-effective option for independent professionals as sole proprietors in their specific professions who want to work legally in the UAE without forming a company.

Key Benefits:

→ Lower setup costs compared to Free Zones and Mainland.

→ Allows self-employed individuals to operate legally.

→ Eligible for a UAE residency visa.

Challenges:

Limited to specific professional services (e.g., media, tech, consulting).

Cannot engage in commercial or industrial activities.

Best for: Consultants, designers, media professionals, and tech freelancers, Sole Proprietors

Offshore Company

An offshore company is a UAE-registered entity designed for international operations. Offshore businesses cannotconduct trade within the UAE.

Key Benefits:

→ 100% foreign ownership with zero corporate tax.

→ Ideal for asset protection and international trade.

→ No physical office required.

Challenges:

Cannot conduct business within the UAE.

Banking options can be limited for offshore entities

Best for: International trade, asset protection, and holding companies

Which Jurisdiction is Right for You?

Final Thoughts

The majority of you will be in the free zones.

Only if you need to be on the mainland for a specific reason. Such has dealing with physical goods or government contracts.

Each business structure in the UAE serves a different purpose. Free Zones but limit mainland access if you plan on selling physical goods, Mainland companies provide full flexibility but come at a higher cost, Freelance licenses are cost-effective but limited in scope, and Offshore companies are ideal for asset protection or holding companies.

If you’re unsure about the best jurisdiction for your business, consulting with experts like Startable can help you make an informed decision.