Free Zone companies have restricted mainland trading rights. They cannot directly sell products or services to UAE mainland customers without additional licensing. Solutions include: (1) Appointing a mainland distributor (typical commission 5-15%), (2) Obtaining a dual license (both Free Zone and mainland), (3) Opening a mainland branch, or (4) Focusing exclusively on international trade and free zone-to-free zone transactions. However, Free Zones to Free Zone trading is fully permitted, as is all international import/export business.

Free Zone companies can benefit from 0% corporate tax on qualifying income, provided they: maintain adequate economic substance in UAE, derive income only from qualifying free zone activities, comply with transfer pricing regulations, file annual tax returns, and meet all compliance requirements. Non-qualifying income (such as from UAE mainland business) is taxed at the standard 9% rate. All Free Zone companies must register for corporate tax and file returns, even if enjoying 0% rate benefits. This preferential treatment makes Free Zones highly attractive compared to mainland companies which pay 9% corporate tax.

Setup timeline varies by free zone but typically ranges from 1-5 days for license issuance in most zones. Some zones like RAKEZ and IFZA offer same-day license issuance. The complete process including bank account opening and visa processing takes 2-6 weeks total. Breakdown: company name approval (1-2 days), license processing (1-5 days), bank account opening (5-15 days - often the longest step), and visa processing (7-14 days per visa). Fast-track services are available in many free zones for 20-50% additional fees, potentially reducing total time to 1-2 weeks.

The most cost-effective Free Zones are: RAKEZ (Ras Al Khaimah) from AED 12,000, Ajman Free Zone from AED 10,000, IFZA (Dubai) from AED 14,000, Umm Al Quwain FTZ from AED 12,000, and Fujairah Creative City from AED 15,000. Total first-year setup in these zones ranges from AED 25,000-45,000 including basic flexi-desk office, license, 1-2 visas, and service fees. While more affordable than premium Dubai zones, they offer the same core benefits: 100% ownership, 0% tax (qualifying income), full repatriation rights, and legitimate UAE company status. Location may be less central but suitability depends on business needs rather than prestige.

Yes, Free Zone company owners can obtain UAE residence visas and live in the country. As a shareholder/director, you're eligible for an investor/partner visa (typically 2-3 years validity, renewable). You can also sponsor your family (spouse, children, parents under certain conditions). Visa quota depends on office space: flexi-desk typically allows 1-3 visas, small office 4-6 visas, and larger offices more. With your residence visa, you can rent or buy property anywhere in UAE, open personal bank accounts, get a driving license, sponsor family members, and access all resident benefits. You're not restricted to living near your free zone - you can live in Dubai, Abu Dhabi, or any emirate while your company operates in any free zone.