Mainland or free zone in Dubai for 2026 — which one fits my business?

From a market-access angle, a mainland company can deal directly with any customer in the country and bid on government tenders without restriction, while a free zone company was originally designed for international trade or dealing with other free zone entities — selling directly to the local market usually requires a distributor or a dual licence arrangement. On cost, free zones are typically cheaper to set up and renew annually, though 100% foreign ownership is now available for most mainland activities too, following recent amendments to the commercial companies law.

The bigger difference today is the tax one. A free zone company that meets the conditions to be a Qualifying Free Zone Person (QFZP) — meaning it has real substance, staff, and operating expenses in the zone, earns qualifying income, and stays within the allowed limit for non-qualifying revenue — benefits from a 0% rate on its qualifying income only, while any non-qualifying income is taxed at 9%. It's worth stressing that a free zone company doesn't automatically lose this status just by opening a mainland branch or selling to the local market, provided that's structured correctly; this is a case-by-case decision, and RASEEKH assesses the client's actual activity before recommending mainland or free zone.