The United Arab Emirates (UAE) has earned a global reputation as one of the most business-friendly destinations in the world. Its investor-centric policies, tax benefits, and advanced infrastructure attract thousands of entrepreneurs every year.
However, before registering a company, it’s crucial to understand the different UAE company structures — Mainland, Free Zone, and Offshore as each offers unique advantages, requirements, and purposes. This guide breaks down the distinctions to help you choose the best option for your business in 2025.
This is UAE Company Structures: Mainland, Free Zone, and Offshore explained.
1. Mainland Company
A Mainland company (also known as an onshore company) is registered under the Department of Economic Development (DED) of the respective emirate. It allows businesses to operate anywhere within the UAE and beyond.
Key Features:
- Can trade directly within the UAE market
- Can take on government and private contracts
- Office space within the UAE is required
- Eligible to sponsor unlimited employee visas
Ownership:
Previously, foreign investors required a local sponsor owning 51% shares. However, since recent reforms, many business activities now allow 100% foreign ownership (except for a few strategic sectors).
Ideal For:
- Businesses targeting the UAE domestic market
- Companies seeking public sector contracts
- Retail, construction, and professional service firms
Example Cost Range:
AED 20,000 – 35,000 depending on location and activity.
2. Free Zone Company
The UAE Free Zones were established to attract foreign investment by offering entrepreneurs a streamlined and cost-effective way to do business. Each Free Zone operates under its own regulatory authority and provides a range of incentives.
Key Benefits:
- 100% foreign ownership
- 0% personal income tax
- Full repatriation of profits and capital
- No import/export duties within the Free Zone
- Simplified company registration process
Popular Free Zones include:
- Dubai Multi Commodities Centre (DMCC)
- Ras Al Khaimah Economic Zone (RAKEZ)
- Abu Dhabi Global Market (ADGM)
Ideal For:
- Startups and SMEs
- E-commerce and trading companies
- International investors seeking low-cost setup options
Example Cost Range:
AED 12,000 – 25,000, depending on the Free Zone package.
- Offshore Company
An Offshore company in the UAE is ideal for investors seeking international operations without conducting local business within the UAE. Offshore entities are typically used for asset protection, holding companies, and international trade.
Key Features:
- 100% foreign ownership
- No corporate or income tax
- No requirement for physical office space
- No UAE residency visa eligibility
- Bank account setup permitted
Popular offshore jurisdictions include:
- JAFZA Offshore (Dubai)
- RAK International Corporate Centre (RAK ICC)
Ideal For:
- International trading and consulting businesses
- Asset or property holding structures
- Global investors seeking confidentiality and tax efficiency
Example Cost Range:
AED 10,000 – 20,000
4. Choosing the Right Structure
Your choice depends on your business goals, budget, and target market:
- Choose Mainland if you want to trade freely within the UAE or work with local clients.
- Choose Free Zone for international trading, e-commerce, or service-based startups.
- Choose Offshore for holding assets, tax optimization, or running a global consulting business.
5. Professional Assistance for Smooth Company Formation
Setting up a business in the UAE involves multiple approvals, documentation, and licensing procedures. Partnering with a UAE business setup consultant can save time, reduce costs, and ensure compliance with UAE laws.
Fore More Details: OnDemand International
