Investors, developers, and business owners are still drawn to Dubai’s real estate market. Establishing a real estate firm in Dubai is a wise choice because of the rich prospects in property management, brokerage, and development. Selecting the appropriate jurisdiction, the mainland or the free zone, is a critical choice that enterprises must make.
Both choices have special benefits, but which one is best for you will depend on your target market, business model, and compliance requirements. The licenses, ownership, rules, expenses, and operational flexibility of mainland and free zone countries for real estate startups will all be compared in this extensive guide.
Entrepreneurs who want to optimize business prospects while maintaining regulatory compliance must comprehend these distinctions. The scalability, market reach, and long-term profitability of your business will be greatly impacted by the jurisdiction you choose, regardless of whether your goal is to concentrate on international real estate consulting or the UAE’s booming local market.
Mainland vs Free Zone: Which is Better for Real Estate?
Setting up a real estate business in Dubai requires careful evaluation of the jurisdiction where you will incorporate.
Mainland:
- Allows direct business with the UAE local market.
- Access to lucrative government projects and tenders.
- Subject to UAE commercial laws and DED licensing.
- Flexible office location within the emirate.
Free Zone:
- 100% foreign ownership without the need for a UAE national sponsor.
- Tax exemptions and customs duty benefits.
- Business activities are limited within the Free Zone or international markets (unless a distributor is appointed for the UAE mainland).
- Streamlined company setup process with Free Zone authorities.
The mainland is frequently chosen by businesses aiming to serve a local market or those wishing to do real estate brokerage throughout Dubai. But for businesses that specialize in property tech, international real estate consulting, or investment services, Free Zones are perfect, particularly for foreign investors looking for complete ownership and a less complicated regulatory framework. Furthermore, Free Zones provide customizable office packages that enable entrepreneurs to keep their worldwide operating reach while reducing early overheads.
What is a Mainland Real Estate License in Dubai?
A mainland real estate license is issued by the Dubai Department of Economic Development (DED) and regulated by the Real Estate Regulatory Agency (RERA). Key points include:
- Eligibility: Open to UAE nationals and foreign investors (with local sponsor/shareholding if required).
- Activities Covered: Real estate brokerage, property management, leasing, development, and consultancy.
- License Types: Commercial License for brokerage and property management, Developer License for property developers.
- RERA Certification: Mandatory for real estate brokers and consultants.
A mainland license offers unrestricted business operations within Dubai and the UAE, including direct dealing with individuals and corporations.
See Also How to Set Up a Real Estate Business in Dubai, UAE
Setting Up a Real Estate Business in a Free Zone
Starting a real estate business in a Free Zone involves working within a designated economic zone that provides business-friendly policies. Steps include:
- Choose the Free Zone – DMCC, DSO, DIFC are popular choices.
- Select Business Activity – Real estate consultancy, investment services, or tech-based property platforms.
- Reserve Trade Name – Register a business name with the Free Zone authority.
- Submit Application & Documentation – Passport copies, business plan, NOC (if applicable).
- Lease Office Space – Flexi-desk, shared office, or private office options.
- Obtain License & Visas – Acquire trade license and apply for visas.
Note: Free Zones in Dubai generally do not allow direct brokerage activities involving local property sales without appointing a mainland agent or distributor.
Free Zone vs Mainland: Legal and Ownership Differences
| Aspect | Mainland | Free Zone |
|---|---|---|
| Ownership | Up to 100% foreign ownership (subject to activity and regulations) | 100% foreign ownership |
| Market Access | Local UAE market | Limited to Free Zone and international markets |
| Regulatory Body | DED & RERA | Respective Free Zone Authority |
| Office Requirements | Physical office mandatory | Flexi-desk/shared office allowed |
| Business Activities | Full scope of real estate services | Limited unless appointed distributor |
| License Cost | Moderate to high | Competitive packages available |
RERA Registration: Is It Needed for Free Zone Companies?
- Mainland Companies: Mandatory RERA registration and certification.
- Free Zone Companies: Not required unless engaging in UAE mainland property activities.
If a Free Zone company plans to operate in Dubai’s real estate brokerage sector, it must either:
- Open a Mainland branch with a RERA license.
- Appoint a registered mainland distributor/agent.
See Also Choosing the Right Free Zone for Media Business in Dubai
Cost Comparison: Mainland vs Free Zone Setup
| Cost Factor | Mainland | Free Zone |
|---|---|---|
| License Fee | AED 15,000 – 25,000 | AED 12,000 – 18,000 |
| RERA Certification | AED 5,000 – 7,500 | Not required (unless operating in mainland) |
| Office Space | AED 20,000+ (based on size & location) | Flexi-desks from AED 8,000 |
| Visa Cost | AED 3,500 – 7,000 per visa | Included in packages (varies) |
| Setup Time | 2–3 weeks | 5–10 days |
Free Zones provide a cost-effective entry for startups focusing on consulting, property investment advisories, or proptech platforms. Mainland is necessary for companies engaging in local real estate brokerage or development.
Which Is Best for Foreign Entrepreneurs?
Mainland Setup is best if:
- Your primary target market is within Dubai/UAE.
- You plan to engage in property brokerage, management, or development.
- You need flexibility to operate across the UAE.
Free Zone Setup is best if:
- Your business model is a global consultancy or digital real estate platform.
- You prefer 100% ownership without complex local partner structures.
- You want lower setup costs and flexible office requirements.
Office Requirements for Mainland Real Estate Firms
To obtain a mainland real estate license, businesses are required to lease physical office space in Dubai. Requirements include:
- Minimum 200 sq.ft. for consultancies or solo agents.
- Executive Suites or Shared Offices may be accepted if compliant with activity rules.
- Virtual offices are not permitted for real estate brokerage.
See Also How to Set Up a Company in Dubai as a UK Citizen
Tax Benefits: Free Zone vs Mainland
| Taxation Aspect | Mainland | Free Zone |
|---|---|---|
| Corporate Tax | Exempt (certain activities may apply) | Exempt (for qualifying activities) |
| VAT | 5% VAT applies | 5% VAT applies |
| Customs Duty | Applicable | Exempt within the Free Zone |
| Dividend Repatriation | Allowed | Allowed |
Final Checklist: Choosing the Right Jurisdiction
- Target Market: UAE residents or international clients?
- Business Activities: Brokerage or consultancy?
- Ownership Preference: Need 100% ownership?
- Compliance: Prepared to meet DED & RERA rules?
- Budget: Ready for license fees and rent?
- Scalability: Need room for growth?
- Timeline: Require fast setup?
Conclusion
For a real estate startup in Dubai, deciding between a mainland and free zone setup is a strategic choice that affects your operational reach, regulatory requirements, and market penetration.
To access the local market and operate lawfully, a mainland license governed by DED and RERA is essential for full-scale real estate brokerage, management, or development. Mainland companies enjoy access to government projects, high-value developments, and a wider client base.
Free Zones are ideal for global real estate consultancy, tech platforms, or investment services. They offer full ownership, simplified compliance, tax incentives, and cost-effective entry—perfect for entrepreneurs targeting international growth.
