What is UAE Mainland Company?
A UAE company licensed by the local Department of Economic Development, allowed to trade anywhere in the UAE. 100% foreign ownership now allowed in most activities.
- Last updated
- Updated May 9, 2026
- Reading time
- 3 min read
How it works
A UAE Mainland Company is licensed by the Department of Economic Development (DED) of the relevant emirate (Dubai DED, Abu Dhabi DED, Sharjah DED, etc.) — operating under federal UAE company law (Commercial Companies Law of 2021) plus emirate-level regulations.
Mainland vs free zone — key differences:
| Mainland | Free Zone | |
|---|---|---|
| Where can trade | Anywhere in UAE + worldwide | Free zone + outside UAE; restricted into mainland |
| Foreign ownership | Up to 100% (since 2021 reform) | Always 100% allowed |
| Local sponsor | No longer required for most activities | Never required |
| Office requirement | Real physical office in mainland | Virtual office often sufficient |
| Visa quota | Tied to office size + activity | Per package, fixed allocation |
| Setup cost | AED 15,000-30,000+ | AED 8,000-25,000+ |
| Annual cost | Higher (real office, larger compliance) | Lower (virtual office option) |
| Corporate tax | 9% on profit > AED 375k | 9% standard / 0% on Qualifying Income for QFZP |
The 2021 ownership reform
Before 2021, most mainland UAE companies required a local Emirati sponsor holding at least 51% of the shares. The foreign founder retained economic control via side agreements but legal ownership was structurally Emirati.
Federal Decree-Law 26 of 2020 (effective June 2021) abolished the local-sponsor requirement for most commercial activities. Foreign nationals can now own 100% of mainland UAE companies in most sectors. Strategic sectors (oil & gas, defence, banking, insurance) retain ownership restrictions or sponsor requirements.
Corporate tax (since 2023)
Same regime as free zone companies (Federal Decree-Law 47 of 2022):
- 0% on taxable income up to AED 375,000.
- 9% on taxable income above AED 375,000.
Mainland companies do not qualify for the QFZP 0% regime — that's free-zone-only. So a mainland company with profits above AED 375k pays 9% on the excess across all activities.
VAT
UAE VAT applies at 5% on most goods and services since 2018. Mainland companies cross the AED 375,000 mandatory registration threshold at relatively low revenue and must register, charge, and remit VAT.
When to choose mainland over free zone
Mainland is typically right for:
- Trading directly with UAE consumers (B2C retail, restaurants, services to mainland customers).
- Government contracting in the UAE.
- Real estate brokerage and trading in UAE.
- Activities requiring physical mainland presence (clinics, schools, certain professional services).
- Operations needing Emirates ID + visa for many employees.
Free zone is typically better for:
- Export-only operations.
- B2B services to non-UAE customers.
- Foreign-source activities managed from UAE.
- Cost-sensitive structures without need for mainland trading.
Examples
- British founder opens UAE Mainland LLC for retail clothing brand. Operates physical store in Dubai Mall + e-commerce to UAE customers. Mainland licence required (free zone wouldn't allow B2C UAE sales). 100% foreign ownership under post-2021 reform. 9% CIT on profit above AED 375k. VAT registration mandatory above AED 375k revenue.
- Indian software founder considers mainland vs free zone. SaaS sold globally, no UAE customers. Free zone is operationally simpler + cheaper + similar tax. Mainland makes no sense for this profile.
Common mistakes
- Believing the local sponsor is still required. Most activities post-2021 allow 100% foreign ownership.
- Choosing mainland for export-only operations. Free zone is usually cheaper + simpler.
- Underestimating VAT obligations. 5% VAT registration mandatory at AED 375k turnover; meaningful compliance burden.
- Treating UAE residence visa as automatic tax residency. UAE tax residency requires presence + ties under Cabinet Decision 85.
Frequently asked questions
Do I still need a local sponsor?
No — most activities since 2021 allow 100% foreign ownership without a local Emirati sponsor.
What's the corporate tax rate?
9% on profits above AED 375,000 since June 2023.
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