Mainland vs. Free Zone: Choosing the Right Business Setup in the UAE (2025 Edition)

For any foreign entrepreneur or business entering the UAE, one of the first — and most consequential — decisions is choosing between a Mainland or Free Zone setup. This isn’t just a matter of location; it affects everything from ownership rights and tax obligations to client access and future expansion.

In 2025, with corporate tax in full effect and business reforms still unfolding, understanding the pros, cons, and key differences is more critical than ever. At ASTRUC & Co, we advise clients daily on these decisions — and we’ve created this practical guide to help you navigate them with clarity and confidence.

UAE Corporate Tax in 2025: What Businesses Need to Know

Since its official implementation on 1 June 2023, the UAE corporate tax regime continues to evolve — and in 2025, it remains a top priority for both local and international businesses operating in the region. Designed to align with global standards while maintaining the UAE’s competitive business environment, the law introduces a 9% federal tax on the net profits of companies exceeding AED 375,000.

For many businesses — especially SMEs and foreign investors entering the UAE — navigating the nuances of compliance is critical. Missteps can lead to penalties, while strategic structuring can yield significant advantages.

This guide unpacks what businesses need to know in 2025 to stay compliant, optimise their tax strategy, and avoid costly oversights.