Free Zone or Mainland? How to choose the right license for your UAE online business in 2025

Launching an online business in the UAE has never been easier, or more popular. With streamlined licensing, 100% foreign ownership, and world-class infrastructure, thousands of entrepreneurs are going digital-first in 2025. But one key decision can impact everything from your banking to your compliance: free zone or mainland license?

This guide walks you through the setup process and breaks down what type of license you really need depending on your goals.

The online business boom in the UAE

From e-commerce and consulting to digital courses and content creation, online-first businesses dominate the UAE’s new license registrations. This is driven by:

• Low-cost startup packages

• Access to regional and global markets

• A 0% personal income tax environment

• Flexible visa options

• Remote-friendly setup and management

Step-by-step: How to legally launch your online business

1. Choose the right licensing jurisdiction

This is where many founders get it wrong. Your license doesn’t just determine your setup cost, it impacts who you’re legally allowed to sell to, what banks you can work with, and whether you’re liable for corporate tax.

In the UAE, you can register your business in either a mainland jurisdiction (e.g. Dubai DED) or a free zone (e.g. SPC, SHAMS, Meydan).

So which should you choose?

Free zone vs mainland: Which one suits your online business?

Choose a free zone license if:

• Your customers are based outside the UAE

• You're selling digital products, courses, or services internationally

• You want a fast and low-cost setup (starting from AED 5,500)

• You don’t need a local payment gateway or physical office

• You’re aiming to benefit from 0% corporate tax under qualifying income

Choose a mainland license if:

• You’re selling products or services directly to UAE residents

• You want full access to UAE payment gateways and bank integrations

• You plan to advertise or collaborate with UAE-based brands and clients

• You need to apply for government tenders or permits

• You want to avoid any ambiguity in compliance or long-term scale

Still unsure? Here's the quick logic:

• Selling to the UAE = mainland is safer

• Selling from the UAE to the world = free zone is ideal

• Doing both = consider a hybrid structure

2. Select your business activities

Make sure your license allows the right commercial activities. Popular ones for online businesses include:

• E-commerce via internet portals

• Online education and content creation

• IT consulting

• Marketing and social media services

• Web or app development

Tip: Some zones offer multi-activity bundles under a single license.

3. Register your license

Most zones offer fully digital applications. You’ll need a passport, digital photo, and a completed application form. Some zones request a basic business plan or activity explanation.

Setup cost range in 2025:

• AED 5,500 – 8,000 (license only, no visa)

• AED 9,000 – 14,000 (license + visa eligibility)

4. Open a bank account

Banking is easier in 2025, especially with digital banks like Wio and Zand. But your success still depends on the zone you’re registered in and how well you present your business model.

Banks to consider:

• Wio Bank

• Zand

• RAKBank

• Mashreq NEOBiz

Tip: Prepare a brief business profile, links to your website or portfolio, and expected income sources.

5. Connect a payment gateway

To legally accept payments online, you’ll need an approved UAE payment processor.

Popular options in 2025:

• PayTabs

• Telr

• Checkout.com

• Stripe (available via select partner zones)

• Tap

Note: Some gateways are only available with mainland licenses. Always confirm eligibility based on your setup.

6. Build and launch your online platform

Most entrepreneurs now use:

• Shopify or WooCommerce for e-commerce

• Stan Store or Podia for creators

• Kajabi or Thinkific for education

• Wix or Webflow for service businesses

Social-first commerce (Instagram Shops, TikTok Shop, WhatsApp Catalog) is rapidly expanding in the UAE and GCC.

7. VAT and corporate tax compliance

If your annual revenue exceeds AED 375,000, you must register for VAT with the Federal Tax Authority.

For corporate tax:

• Free zone companies may still qualify for 0% corporate tax if income is from outside UAE or same-zone entities

• Mainland companies pay 9% on profits above AED 375,000

When in doubt, consult a licensed tax advisor to ensure compliance.

Final thoughts

Whether you’re building a side hustle or scaling a regional business, setting up in the UAE is now faster and more flexible than ever. Just remember: your licensing choice impacts your operations, bank access, and long-term compliance.

If you're still unsure which path fits your online business, Sakani can help you map it out and launch without the guesswork.