# Free zone or mainland? Find the right UAE setup

> Choose a mainland licence if you sell directly to UAE customers, need a shop or site outside a free zone, or want government contracts. Choose a free zone if your customers are mostly overseas, you trade internationally or hold investments, and want a simpler, cheaper setup. Both pay the same corporate tax unless the free zone company qualifies for the 0% QFZP rate.

Interactive calculator: https://www.countify.ae/tools/free-zone-vs-mainland-quiz · Updated 2026-10-14 · Countify UAE

## Typical recommendations

Based on the answers shown.

| Business | Better fit |
| --- | --- |
| Consultant with overseas clients | Free zone |
| Café in Dubai | Mainland |
| Re-export trader | Free zone |

A free zone company can still serve UAE customers through a distributor or a mainland branch.

## The trade-offs

Free zone companies can generally trade within their free zone and abroad, and reach UAE customers through distributors or a mainland branch. Mainland companies licensed by the emirate's economic department can trade anywhere in the UAE and with government. Since 2021, most mainland activities allow 100% foreign ownership.

## Tax

Free zone status does not mean tax-free. A free zone company pays 0% only on qualifying income if it meets every [QFZP condition](https://www.countify.ae/tools/qfzp-de-minimis-calculator); otherwise it pays 9% above AED 375,000 like a mainland company, and may use [Small Business Relief](https://www.countify.ae/tools/small-business-relief-checker). Our [free zone vs mainland guide](https://www.countify.ae/blog/freezone-vs-mainland-uae) goes deeper.

## Frequently asked questions

### Can a free zone company work with mainland clients?

It can sell services to mainland businesses in many cases, but trading goods directly into the mainland usually needs a distributor, a mainland branch or a dual licence. Check your free zone's rules.

### Is a free zone company tax-free?

No. It pays 0% only on qualifying income if it meets the QFZP conditions; otherwise standard corporate tax rates apply.