Setting up a company in Dubai as a French business: free zone or mainland?
It is the first question almost every French founder asks when looking at the UAE. The right answer depends less on tax than on a simple question: who are you going to sell to, and where?
Two statuses, two logics
In Dubai, a company can be set up on the “mainland”, with a licence issued by the Department of Economy and Tourism (DET), or in one of the emirate’s free zones (DMCC, DIFC, Dubai South, IFZA, Meydan…), each with its own authority. Both now allow 100% foreign ownership for most activities.
Mainland: sell anywhere in the UAE
Since the 2021 company-law reform, a 51% local partner is no longer required for most commercial activities, except certain activities deemed strategic. A mainland company can sell directly to any customer in the UAE, open retail outlets and bid for government contracts. In return, it needs a physical office and the process is somewhat heavier.
Free zone: simple, fast, outward-looking
Free zones offer fast incorporation, shared-office or “flexi-desk” packages and customs advantages for import and re-export. Their limit: as a rule, a free zone company does not sell directly into the UAE domestic market. It goes through a distributor, an agent or an additional licence. Ideal for international services, a holding or regional trading; less so for a brand that wants to sell in Dubai stores.
The tax picture has changed
The UAE is no longer a corporate-tax-free jurisdiction. For financial years starting from June 2023, a 9% tax applies to profits above AED 375,000. Free zone companies that meet the “Qualifying Free Zone Person” conditions can keep a 0% rate on qualifying income — but not on all income. VAT is 5%. Large multinational groups are also subject to a 15% minimum tax since 2025.
On the French side, a tax treaty has linked France and the UAE since 1989, but setting up a company in Dubai does not make you a UAE tax resident: your tax residence depends on your home, your main activity and the centre of your economic interests. Tax advice on both sides is essential before structuring.
The five questions that decide
- 01Who are your customers: businesses and consumers in the UAE (rather mainland) or an international clientele (rather free zone)?
- 02Do you need a shop, a warehouse or access to government contracts?
- 03How many residence visas do you need for yourself and your team? The quota often depends on office space.
- 04What annual budget? Licence, office, visas and accounting range from a few thousand to several tens of thousands of euros a year, depending on the zone and activity.
- 05Are you ready for bank account opening? Banks expect a solid file and real substance; allow several weeks.
What if you didn’t set up a company straight away?
Many French companies set up a structure too early, before knowing whether the market responds. It is often possible to start differently: a local distributor or agent, an e-commerce store to test demand, events or pop-ups, first commercial meetings. The company comes later, when the numbers justify it.
That is the idea behind SCENA Market Access: test the UAE market using existing infrastructure, then build a local presence once demand is proven. And when the time comes, we help you choose between mainland and free zone, alongside your legal and tax advisers.
This article is for information only and does not constitute legal or tax advice. Rules change: check your situation with a professional.