Choosing the correct jurisdiction is the most critical decision when establishing a company in Dubai. Your selection determines where you can trade, whether physical office space is mandatory, how many employee visas you can issue, and your overall corporate structure.
Free Zone vs. Mainland vs. Offshore: Key Differences
1. Free Zone Company
- 100% foreign ownership guaranteed
- 0% customs duties within Free Zone boundaries
- Flexi-desk or virtual office options permitted
- Limitation: Requires a local distributor or agent to trade directly inside the local UAE mainland market
2. Mainland (DET) LLC
- 100% foreign ownership permitted for most activities
- Freedom to trade directly anywhere across the UAE market
- Ability to bid on UAE government contracts and tenders
- Requirement: Physical office space with attested Ejari tenancy contract
3. Offshore Entity
- Holding company structure for international assets
- No physical office or UAE residence visas issued
- Protects international assets, IP, and real estate
- Limitation: Cannot carry out commercial trading inside the UAE
How 9% Corporate Tax Applies Across Jurisdictions
Under UAE tax law, both Mainland and Free Zone companies earning taxable net profits exceeding AED 375,000 are subject to the standard 9% Corporate Tax rate. However, Free Zone entities classified as "Qualifying Free Zone Persons" (QFZPs) deriving income from qualifying transactions may maintain a 0% tax rate on qualifying income.
Find Jurisdiction Experts on AskTaskers
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