The types of companies in the UAE fall into three families: mainland companies licensed by an emirate, free zone companies licensed by one of the country's free zone authorities, and offshore companies registered for holding and international business. Each gives you 100% foreign ownership for most activities, the same federal corporate tax and a UAE bank file.
The hard part is that they are not interchangeable. A mainland company can sell to anyone in the country but needs a registered office. A free zone company is cheaper and simpler but is licensed to operate inside its zone. An offshore company cannot trade in the UAE at all. Pick the wrong type and you end up forming a second company later.
This is where we come in. We form UAE companies ourselves, so the choice of type, emirate and zone, the licence and the bank file all run through one team. You get one clear price and a company in about a week.
Ready to set up? Our team forms mainland, free zone and offshore companies across the UAE.
UAE Company Incorporation
Binderr
Corporate tax
0% up to AED 375,000
Freezone Tax
0%
Time to Incorporate
1 Week
Cost
Starting from €1,899
Types of Companies in the UAE at a Glance
There are three main types of companies in the UAE, plus the two financial free zones, which run their own legal systems. This table shows how they compare on the points that decide most choices.
Point | Mainland | Free zone | Offshore |
|---|---|---|---|
Licensed by | The emirate's economic department | A free zone authority | An offshore registry such as RAK ICC or JAFZA |
Where it can trade | Anywhere in the UAE | Inside its zone and abroad; the mainland needs extra approval | Outside the UAE only |
Foreign ownership | 100% for most activities | 100% | 100% |
Office | Registered lease required in most emirates | Flexi desk or office package | Registered agent's address |
Residence visas | Yes, under the MOHRE quota | Yes, tied to the office package | Not the vehicle for visas |
Corporate tax | 9% above AED 375,000 | 0% on qualifying income if it meets the conditions, 9% otherwise | 9% above AED 375,000 |
Typical use | Local trade, shops, contracts with UAE companies | Services, trading abroad, e-commerce, holding | Holding shares, property and assets |
Mainland Companies
A mainland company is licensed by the economic department of the emirate where it is based, such as the Department of Economy and Tourism in Dubai or ADRA in Abu Dhabi. It holds a trade licence, can sell to any customer in the UAE, bid for contracts with UAE companies and open premises where its market is. Since Federal Decree-Law No. 26 of 2020, foreign owners can hold 100% of a mainland company for most activities.
Free Zone Companies
A free zone company is licensed by a free zone authority, such as IFZA, DMCC, RAKEZ or SHAMS. Each zone has its own rules, packages and fees. Free zone companies are fully foreign-owned, can trade abroad freely and can qualify for 0% corporate tax on qualifying income. The federal portal says a free zone company may not carry out business outside its zone on the mainland without the right approval.
Set Up a Company in the UAE
Choosing between the types of companies in the UAE is very doable once your activity and customers are clear. This is what we do for you.
- Right type first: Mainland, free zone or offshore matched to how you will trade.
- We form it ourselves: Trade name, approvals and licence, one team.
- The right emirate or zone: Fees and office rules compared before you commit.
- 100% ownership checked: Your activity tested against the strategic list.
- Bank file built in: KYC prepared while the company is formed.
- Clear pricing, no surprises: One quote, from €1,899, with every government fee listed.
Offshore Companies
An offshore company is registered with an offshore registry, mainly RAK ICC in Ras Al Khaimah, JAFZA Offshore in Dubai or Ajman Free Zone's offshore regime. It has no trade licence to operate in the UAE. Ajman Free Zone's own page says its offshore company is not suitable for companies trading directly within the UAE market. It is used to hold shares, property, intellectual property and assets.
Financial Free Zones
The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) are financial free zones with their own common law, courts and regulators. They suit funds, banks, asset managers and holding structures. Our guide to private equity and VC firm setup in ADGM or DIFC covers them.
Mainland Company Types in the UAE
Within the mainland there are several legal forms. The Commercial Companies Law, Federal Decree-Law No. 32 of 2021, sets five company forms, and the emirates also license sole establishments, civil companies, branches and representative offices.
Limited Liability Company (LLC)
The LLC is the standard choice among the types of companies in the UAE mainland. Article 71 allows between 1 and 50 owners, each liable only up to their share, and Article 76 sets no fixed minimum capital, only that the capital be sufficient for the company's purpose. Article 102 requires an LLC to appoint an auditor each year. Our guide to LLC formation in the UAE goes deeper.
Sole Establishment
A sole establishment is owned by one person and has no separate legal personality, so the owner is personally liable for its debts. It is simple and cheap, and it suits a single professional or a small trader.
Civil Company
A civil company is a partnership of professionals, such as doctors, engineers or consultants, who practise together. Partners carry unlimited liability.
Branch of a Foreign Company
A branch lets a foreign company operate on the mainland under its own name. It is not a separate company, so the parent is fully liable. The Ministry of Economy and Tourism charges AED 3,500 for the branch's initial approval, which takes 3 working days.
Joint Stock Companies
Private and public joint stock companies are for larger businesses that plan to raise capital or list. Few founders start here.
Representative Office
A representative office promotes the parent company's products and services but cannot trade or earn income in the UAE.
Free Zone Company Types
A free zone company takes the legal form its zone allows. The names differ by zone, such as FZE, FZCO or FZ-LLC, but they are all limited liability companies owned by one or more shareholders.
Free Zone Company or Establishment
The standard free zone company is a limited liability company with one or more shareholders. It holds a licence for the activities it lists, a visa quota tied to its office package and an office address in the zone. Our guide to free zone company formation in the UAE compares the process across zones.
Branch of a Foreign or UAE Company
A foreign company or a UAE company can open a branch in a free zone. The parent's documents must be attested for use in the UAE.
Choosing the Zone
There are dozens of free zones across the emirates, and the right one depends on your activity, budget and visa needs. RAKEZ publishes a Biz Starter package from AED 6,000, IFZA suits service companies wanting a Dubai address, and DMCC suits commodity and trading businesses. Our guide to the best free zones in the UAE for company formation compares them, and you can read about IFZA company formation and RAKEZ company formation.
Offshore Company Types in the UAE
An offshore company is the right type when you need to hold assets, not run a business in the UAE. The three registries differ on fees, documents and property rights.
RAK ICC
RAK ICC's 2026 fee schedule sets incorporation at AED 3,250 for one year and renewal at AED 3,950. Its companies can register freehold property in Dubai under a 2019 agreement with the Dubai Land Department. Read our guide to RAK ICC company formation.
JAFZA Offshore
JAFZA charges AED 10,000 to register a new offshore company and AED 2,500 to renew it, and registration must go through a JAFZA registered agent. Corporate shareholders' documents must be notarised and attested. See our guide to JAFZA offshore company formation.
Ajman Offshore
Ajman Free Zone offers offshore companies for holding, special purpose vehicles and real estate holding, with a typical timeline of 1 to 3 working days. It publishes no fee schedule. Read our guide to Ajman offshore company formation.
UAE Company Incorporation
Binderr
Corporate tax
0% up to AED 375,000
Freezone Tax
0%
Time to Incorporate
1 Week
Cost
Starting from €1,899
Mainland vs Free Zone
Mainland vs free zone is the choice most founders face. Both give you 100% ownership, a trade licence, visas and a bank account. The difference is where you can trade, what you must rent and how you are taxed.
Trading Rights
A mainland company can trade with anyone in the UAE. A free zone company trades freely within its zone and abroad, but selling to mainland customers needs a distributor, a branch or a permit, depending on the emirate and the zone.
Office and Premises
In Dubai, a mainland company registers its lease through Ejari, which costs AED 177.75. Abu Dhabi's Tajer licence needs no office lease for the first three years (see business setup in Abu Dhabi). Free zones sell flexi desks and small offices as part of the package, which is usually cheaper. Our guide to Ejari and the office requirement for a mainland licence covers the detail.
Visas
A mainland company's visa quota is set by MOHRE, based partly on the premises. A free zone company's quota is tied to its office package. Read about free zone visa quota and costs.
Cost
Government fees on the mainland are lower than many quotes suggest: Abu Dhabi caps setup and renewal at AED 1,000, and Ajman charges AED 600 to issue an economic licence. The office and visas drive the total. Free zone packages bundle the licence and a desk into one annual price.
Free Zone vs Mainland in Dubai
Free zone vs mainland in Dubai changed in 2025. Dubai Executive Council Resolution No. 11 of 2025 lets a free zone company operate on the Dubai mainland through a branch licence at AED 10,000 a year or a temporary permit at AED 5,000, with separate financial records. It does not apply to the DIFC. So a Dubai free zone company can now reach mainland customers without forming a second company, for eligible activities. Our guide to company formation in Dubai compares the Dubai routes.
Tax for Every Type of Company in the UAE
Every type of company in the UAE is inside the federal corporate tax. The Federal Tax Authority treats companies incorporated under UAE law as resident persons, and that includes offshore companies.
Corporate Tax
The rate is 0% on taxable income up to AED 375,000 and 9% above it, for financial years starting on or after 1 June 2023. Companies incorporated on or after 1 March 2024 must register within 3 months, or face an AED 10,000 penalty. Returns are due within 9 months of the year end. Our guide to UAE corporate tax for companies covers the rules.
The 0% Free Zone Rate
A free zone company that meets the conditions of a Qualifying Free Zone Person pays 0% on qualifying income. Non-qualifying revenue must stay under 5% of total revenue or AED 5 million, whichever is lower, and the company needs audited accounts. A mainland company cannot be a Qualifying Free Zone Person. Read about the Qualifying Free Zone Person and the 0% rate.
Small Business Relief
A company with revenue up to AED 3 million can elect Small Business Relief for periods ending on or before 31 December 2029, after the Ministry of Finance extended it in August 2026.
VAT
VAT is 5%. Registration is mandatory above AED 375,000 of taxable supplies and voluntary above AED 187,500, whatever the type of company. Read about UAE VAT registration for new companies.
Banking for Different Types of Companies in the UAE
The type of company changes how easily you open a bank account. A mainland company with an office and a resident signatory is the file UAE banks approve fastest. A free zone company with a flexi desk and owners abroad is a weaker file, and an offshore company, with no trade licence, is closed to most standard packages.
Our partners open multi-currency accounts for all three types in days, online and with no resident signatory. Our guide to opening a business bank account in the UAE explains the options.
Equals Money
Business Bank Account
Time to onboard
2 Days
Account opening fee
Free
Monthly fee
€30
3S Money
Cross-border payments
Time to onboard
4 Days
Account opening fee
Free
Monthly fee
Starting from € 100
How to Choose Between the Types of Companies in the UAE
Start with where your customers are and what you need to hold. These paths cover most founders choosing between the types of companies in the UAE.
You Sell to UAE Customers
Choose a mainland company, or a Dubai free zone company with a mainland branch or permit if your activity is on the eligible list. Read our guide to mainland company formation in Dubai.
You Serve Clients Abroad
Choose a free zone company. It is cheaper, needs no mainland lease and can qualify for 0% on qualifying income. See our guide to free zone company formation in Dubai.
You Need a Residence Visa
Choose a mainland or free zone company. An offshore company has no premises or trade licence and is not the vehicle for visas.
You Only Hold Assets
Choose an offshore company, or a free zone holding company if you also want a visa. Read how to set up a holding company in Dubai.
You Run a Regulated Financial Business
Look at the DIFC or ADGM, or at the regulator that covers your activity on the mainland.
Form the Right Type of UAE Company
Most founders who form the wrong type find out when they try to sign their first contract or open a bank account. We check before you start.
- Customers mapped first: The type chosen for where you actually sell.
- Tax planned early: Qualifying Free Zone Person conditions checked before you pick a zone.
- Visas covered: A quota that fits the people you plan to bring.
- Holding structures: Offshore or free zone holding set up to match the group.
- Bank ready: A file that fits the bank or partner you will use.
- Fast formation: Most companies are formed in about a week.
Costs of the Main Types of Companies in the UAE
The costs differ as much within each family as between them. These are published government or authority figures, not full packages.
Type | Published figure | Source |
|---|---|---|
Abu Dhabi mainland | AED 1,000 for setup or renewal, covering Abu Dhabi government fees | Abu Dhabi Media Office, 2021 |
Ajman mainland | AED 600 to issue the economic licence | Ajman government service catalogue |
Sharjah mainland | AED 15,000 to AED 30,000 in the first year | Sharjah Economic Development Department |
RAKEZ free zone | Biz Starter package from AED 6,000 | RAKEZ |
RAK ICC offshore | AED 3,250 incorporation, AED 3,950 renewal | RAK ICC 2026 fee schedule |
JAFZA offshore | AED 10,000 registration, AED 2,500 renewal | JAFZA |
A full first-year budget adds the office, visas, the agent or registered agent, audit and banking. We form UAE companies from €1,899, usually in about a week, and quote every government fee up front. Our guide to the cost of business setup in Dubai breaks down a Dubai budget.
Common Mistakes When Choosing Between Types of Companies in the UAE
Most expensive mistakes come from choosing on price alone.
Choosing a Free Zone for Local Customers
A free zone company that needs to sell to the mainland may need a distributor, a branch or a permit. Check the route before you form it.
Treating Offshore as Tax-Free
An offshore company incorporated under UAE law is a resident person for corporate tax. It must register and file like any other company.
Assuming a Minimum Capital
The Commercial Companies Law sets no fixed minimum for an LLC. The AED 300,000 figure some guides still quote is not in the law.
Assuming a Local Sponsor
Since 2021, most mainland activities allow 100% foreign ownership. Only a short strategic list, set by Cabinet Resolution No. 55 of 2021, needs a national share.
Forgetting the Bank
A company type the bank cannot place leaves you with a licence and no account. Plan the bank file with the company.
Get Advice on the Right Company Type
Not sure which type fits your business? Talk to us before you pay any fees.
- Your activity checked: Against mainland, free zone and offshore rules.
- Tax view: Whether the 0% free zone rate is realistic for your income.
- Group structures: Where a holding company should sit.
- Owners abroad: A plan for the licence, visa and bank together.
- A written plan: Clear next steps sent to you after the call.
Bottom Line
The types of companies in the UAE come down to mainland, free zone and offshore. Mainland lets you trade anywhere in the country, free zone gives you a cheaper package and a possible 0% rate on qualifying income, and offshore holds assets but cannot trade in the UAE. All three are fully foreign-owned for most activities and all three sit inside corporate tax.
Choose by where your customers are, whether you need visas and what you plan to hold. We form the company and build the bank file with you, from €1,899.
