Introduction: Why This Choice Matters
When setting up a company in the UAE, one of the first questions every entrepreneur faces is: “Should I establish in a Free Zone or on the Mainland?”
Both options offer unique advantages, but the decision largely depends on your industry and business model. Understanding which activities are restricted to Mainland companies is crucial for long-term success. At Premia TNC, we guide clients through this process to ensure the right fit from the start.
Advantages of a Free Zone Company
- 100% foreign ownership
- Simplified and faster company registration
- Attractive for specific industries (IT, e-Commerce, import/export, B2B services)
- Ideal for companies targeting international trade
However, Free Zone companies face a major limitation: they cannot directly trade within the UAE Mainland without a local partner or distributor.
Activities Restricted to Mainland Companies
Certain industries are either restricted in Free Zones or require a Mainland license to operate legally in the UAE.
1. Retail Business
- Running shops, restaurants, or malls requires a Mainland license.
- Free Zone companies cannot sell directly to Mainland consumers without a local distributor.
2. Real Estate Sector
- Real estate brokerage, property management, and development activities are Mainland-only.
- Some Free Zones allow property holding, but commercial activity is restricted.
3. Travel & Tourism
- Travel agencies, tour operators, and ticketing businesses must obtain a Mainland license along with DTCM (Dubai Tourism) approvals.
4. Healthcare & Medical Services
- Operating hospitals, clinics, and pharmacies requires a Mainland license and approval from health authorities (DHA, MOH).
5. Education Services
- Schools, training centers, and educational institutions must be set up as Mainland entities.
6. Legal Services
- Law firms and advocacy practices are only allowed as Mainland companies.
- Consulting services such as IT or business advisory may still be conducted under certain Free Zone licenses.
7. Government Contracts
- To bid for and execute government projects, a Mainland license is mandatory.
Free Zone vs Mainland: A Comparison
Category | Free Zone Company | Mainland Company |
Ownership | 100% foreign ownership | 100% foreign ownership (since 2021) |
Scope of | International trade, e-Commerce, B2B | Local UAE market, retail, government contracts |
Advantages | Tax benefits, easy setup, global focus | Broad business opportunities, full market access |
Limitations | No direct Mainland trade | Higher costs, more regulatory steps |
Conclusion: Choosing the Right Path
- If your business focuses on global trade, e-Commerce, or export-oriented services, a Free Zone company may be the most efficient option.
- If you plan to operate in retail, real estate, healthcare, education, or government contracting, you must establish a Mainland company.
At Premia TNC, we analyze your business goals and industry requirements to recommend the most suitable structure. Understanding the distinction between Free Zone and Mainland entities is the foundation of a successful UAE market entry.