The first step when you want to open a business in Dubai is to choose the right economic zone — Free Zone or Mainland. This choice will influence your costs, the type of license, the customers you can sell to, but also whether you can easily get a bank account or a residency visa.
In 2025, choosing between Free Zone and Mainland is essential for any Romanian entrepreneur who wants to open a business in the UAE.
What is Free Zone and Mainland?
Free Zone— is a special economic zone with flexible legislation that allows 100% foreign ownership of the company, reduced taxes and simplified administrative processes.
Mainland (Mainland area)— refers to the territory directly governed by the local government. Here firms can operate directly with the local market, but with stricter requirements and more complex regulations.
1. Advantages and limitations of a business in the Free Zone
Advantages:
•100% foreign ownership (no local partner needed)
•Fast registration process (in 5—7 business days)
•Low cost: license + visa + virtual address can start from AED 12,000—15,000
•Zero charge: 0% income tax and dividends (below the threshold of AED 375,000)
•You can carry out international activity (e.g. e-commerce, consulting, IT, marketing)
Limitations:
•You can't bill directly to clients in Dubai (international only)
•You don't have free access to government contracts
•Certain commercial activities are not allowed without local partners
2. Advantages and limitations of a business in Mainland
Advantages:
•You can provide local services in Dubai and the rest of UAE
•You have access to government tenders and contracts
•You can open a physical store or office in the city
•Flexibility in commercial and industrial activities
Limitations:
•Costs are higher (licenses start at AED20,000+)
•Some activities require a local partner (in certain areas)
•Bureaucracy is bigger than in the Free Zone
•Stricter tax and banking control
3. Free Zone vs Mainland — Clear and meaningful comparison
Ownership of the company:
•Free Zone:100% owned by the Romanian citizen, without a local partner
•Mainland:in most cases, it can also be 100% foreign, but sometimes a local sponsor is required in certain industries
Customers and sales market:
•Free Zone:ideal for international customers — you can't invoice directly in Dubai without a local distributor
•Mainland:you can provide services directly to clients from Dubai and the rest of the UAE
Workspace:
•Free Zone:many areas offer virtual address (included in the package) — no physical office needed
•Mainland:a physical office is required for registration (even if it is a shared office)
Taxation:
•Free Zone:0% income tax up to AED 375,000/year, then 9%
•Mainland:the same regime, but tax checks are more frequent
Access to bank account:
•Free Zone:sometimes more difficult, but possible — banks demand clear explanations about the activity
•Mainland:easier access, if the license is clear and the premises are active
Setup Time:
•Free Zone:firm ready in 5—7 working days
•Mainland:the process takes between 10—15 working days
4. When to choose Free Zone
Free Zone is the right choice if:
•You are a freelancer or consultant working with international clients
•You have an e-commerce business or digital agency
•You want a business with low costs and zero tax liabilities
•You don't need a physical office in Dubai
•You don't want local laws complicating you
Concrete example:A Romanian entrepreneur who owns an SEO agency and works with clients from Europe and the USA can set up a company in the Free Zone (ex: Meydan, IFZA, SHAMS) with 100% ownership, virtual address and no tax, all in 5—6 days.
5. When is the Mainland variant better
Mainland is the right choice if:
•Do you want to provide services in the territory of Dubai (ex: construction, IT, medical services)
•Do you want to work with local companies or public institutions
•Open a restaurant, cafe, shop or physical showroom
•You have a local partner and want to scale in the UAE market
Concrete example:A Romanian who wants to open an aesthetic clinic in Dubai, with services for the local public, must have a business in the Mainland and comply with the regulations imposed by the medical authorities.
6. Beware of common pitfalls
•Many people choose Free Zone just because it's cheaper, but then realize they can't operate legally in Dubai
•In Mainland, if you do not choose the type of license well, you risk additional costs and bank account refusal
•Certain Free Zones require mandatory physical space, even if the package is “virtual”.
Final recommendation: how to choose correctly
Choosing the right area depends on your actual business and where your customers are from. Before you choose between Free Zone and Mainland, answer the following questions:
1. Who do you sell to? (local vs international)
2. Do you need an office or showroom?
3. Do you want to get a visa for your/family?
4. Do you want to minimize taxes or have access to the local market?
The most effective way to avoid mistakes is to work with a consulting firm that can do an eligibility analysis before you invest money.
Want to find out exactly what type of business is right for you in Dubai? Ask for specialized advice and we give you a personalized recommendation based on your activity, budget and goals.
.jpg)
