StartSmart

Freezone vs Mainland: UAE Business & Visa Guide – StartSmart

Posted on by Smartadmin
06
May

Freezone vs Mainland: Your Complete Guide to UAE Business Licences & Residency Visas

Last updated: May 2025  |  Reading time: 7 minutes

Choosing between a Freezone or Mainland company licence is the first—and most decisive—step when you start a business in Dubai or elsewhere in the UAE. This guide explains the full process from licence application to residency visas, helping you select the right path and avoid costly delays.

Table of Contents

  1. Business Licence Basics in the UAE
  2. Freezone Licences — Advantages, Costs, Timeline
  3. Mainland Licences — Advantages, Costs, Timeline
  4. Freezone vs Mainland: Side‑by‑Side Comparison
  5. Residency Visa Workflow (Investor & Employee)
  6. End‑to‑End Timeline With StartSmart Packages
  7. Frequently Asked Questions

1. Business Licence Basics in the UAE

  1. Choose legal structure (LLC, FZE, branch, etc.).
  2. Reserve trade name and obtain initial approval.
  3. Sign key documents – Memorandum of Association (MoA) or Articles, plus lease / e‑office agreement.
  4. Submit to authority (DED for Mainland, chosen Freezone authority for Freezone).
  5. Pay government fees and receive e‑licence.

Typical processing time: Freezone 2‑5 working days, Mainland 5‑10 working days (standard queue). Priority and VIP options can shorten both.

2. Freezone Licences

Key Advantages

  • 100 % foreign ownership (no local sponsor required).
  • 0 % personal income tax and 9 % corporate tax only on profits above AED 375 000.
  • No customs duty inside the zone; simplified import/export.
  • Single‑window service for visas, permits, and renewals.

Indicative Costs

  • Licence & registration: AED 12 000 – 25 000 (zone‑specific).
  • E‑office or physical office: AED 6 000 – 40 000 / year.
  • Investor visa quota: usually 1‑6 visas included; AED 3 000 – 4 000 per additional visa.

When a Freezone Is Ideal

Export‑oriented e‑commerce, professional services that invoice offshore clients, and holding or IP‑owning entities generally choose a Freezone.

3. Mainland Licences

Key Advantages

  • Ability to trade directly with the UAE market and government bodies.
  • Open corporate bank accounts faster thanks to on‑shore status.
  • No geographical restrictions on office location within the UAE.
  • Most activities now allow 100 % foreign ownership (post‑2021 reforms).

Indicative Costs

  • Licence issuance (DED): AED 10 000 – 18 000.
  • Office lease (Ejari): AED 15 000 – 80 000 / year depending on size and area.
  • Corporate tax registration (if applicable): AED 1 000 – 2 000.

When Mainland Is Ideal

Retail, contracting, real‑estate brokerage, and businesses targeting the UAE consumer or B2B market benefit most from a Mainland licence.

4. Freezone vs Mainland: Side‑by‑Side Comparison

Factor Freezone Mainland
Ownership 100 % foreign Up to 100 % (activity‑dependent)
Trade within UAE Via distributor/agent Direct, unrestricted
Customs duty 0 % inside zone 5 % standard UAE duty
Office requirement Flexi‑desk often accepted Ejari lease mandatory
Visas included 1–6 (default) Depends on office size
Bank account opening Some banks conservative Smoother for on‑shore

5. Residency Visa Workflow (Investor & Employee)

  1. E‑Visa issuance (entry permit) – 3 working days.
  2. Status change – in‑country fee or border run.
  3. Medical fitness test & biometrics – 1 day.
  4. Emirates ID & passport stamping – 3‑5 working days.

Total time: 1–2 weeks after licence issuance (Fast‑Track service cuts this to ~4 days).

Investor vs Employee Visa

  • Investor / Partner Visa – linked directly to shareholding; renewable every 2 years (Freezone) or 3 years (Mainland).
  • Employment Visa – counted against the company’s quota; renewable every 2 years.

6. End‑to‑End Timeline with StartSmart Packages

Milestone Essential Setup Fast‑Track Setup VIP Concierge Setup
Licence issuance 5‑7 wd 2‑3 wd 48 h incl. PRO escort
Investor visa 7‑10 wd 4‑5 wd 72 h incl. door‑to‑door service
Luxury airport pick‑up — — ✔ Included

See detailed inclusions on our Business Setup & Structuring page.

7. Frequently Asked Questions

How much paid‑up capital do I need?

Most Freezones no longer require paid‑up capital. Mainland LLCs usually need AED 0–50 000 stated capital, with no bank deposit proof for many activities.

Can I convert a Freezone company into a Mainland company later?

Yes. You can either set up a new Mainland entity and transfer assets or, in certain Freezones, migrate the existing licence. StartSmart provides full migration support.

How many visas can my company obtain?

Freezones include 1–6 visas by default. Mainland visas depend on office size (≈9 m² per visa) and business activity.

Is a corporate bank account guaranteed?

Approval rests with each bank’s compliance team. StartSmart pre‑screens your application and introduces you to banks with matching risk appetite, raising approval rates.

Need tailored advice?

Book a Free Consultation  |  Or explore our Tax & Compliance packages.

 

Smartadmin