Key Highlights

• A Dubai Free Zone General Trading license does not guarantee 0% corporate tax. The 9% rate applies to profits above AED 375,000 unless your business holds QFZP status in an FTA-recognized Designated Zone like JAFZA.
• As of March 2025, Free Zone companies can legally sell inside Dubai’s mainland market by obtaining a Dubai Executive Council Resolution No. (11) of 2025 branch permit for AED 10,000 per year.
• Foreign investors can own 100% of a Dubai Mainland General Trading LLC with no local Emirati partner required, under Federal Decree-Law No. 26 of 2020.

A Dubai Mainland General Trading LLC and a Free Zone General Trading license are both valid structures in 2026 but they serve fundamentally different business models, tax strategies, and banking needs. Choosing the wrong one based on price alone costs founders far more in restructuring than the savings were worth.

Here’s how that plays out in real life. You pay AED 12,000 for a budget Free Zone license. Three months later, your bank application is rejected because you have a virtual desk. You apply for a Resolution 11 mainland permit to reach UAE customers. 

That’s another AED 10,000 annually. Then your accountant tells you the 0% tax rate doesn’t apply because your Free Zone isn’t a Designated Zone. You’ve now spent more fixing the setup than a correctly structured Mainland license would have cost from day one.

This guide solves the five most critical setup problems facing international entrepreneurs choosing between a Dubai Free Zone and Mainland for General Trading in 2026. Keep reading the article to learn more.  

Problem 1: Why Is a Dubai Mainland General Trading License More Expensive Than Advertised?

A Dubai Mainland General Trading license costs more than a standard commercial license because the Department of Economy and Tourism (DET) charges a specific, mandatory government activity fee for the “General Trading” classification applied on top of standard license issuance fees. This is not a consultant markup. It is an official UAE government fee.​

What Does a Dubai General Trading License Actually Cost in 2026?

Commercial and trading licenses in Dubai generally range from AED 10,000 to AED 20,000 depending on activity type and jurisdiction. 

For Mainland General Trading, total all-in costs, including the DET activity fee, Ejari-registered physical office, and license, typically land between AED 20,000 and AED 35,000 before visa costs. 

Free Zone setups can start lower on paper, but the Total Cost of Ownership closes that gap quickly once you factor in office upgrades, permit fees, and banking requirements.​

Real scenario: Daniel, an electronics trader based in India, compared a DMCC Free Zone setup at AED 22,000 against a Dubai Mainland LLC at AED 28,000. Daniel chose DMCC for the lower upfront cost.

Six months later, the true cost picture looked very different. To reach UAE retailers, Daniel needed a Resolution 11 branch permit for an additional AED 10,000 per year. 

A physical office upgrade inside DMCC was required to resolve a corporate bank account rejection, costing another AED 15,000 per year. On the tax side, Daniel’s accountant confirmed that all profits above AED 375,000 were taxable at 9%. Because Daniel’s B2C sales to UAE retail stores do not constitute Qualifying Activities under QFZP rules. Mainland sales and B2C consumer revenue are taxed at the standard 9% rate regardless of which Free Zone the company operates from.

Total first-year cost for the DMCC route: AED 47,000+, before visa costs. The Dubai Mainland LLC at AED 28,000 would have been the lower-cost and structurally simpler choice from day one.

Disclaimer: All fees are set by the DET and respective Free Zone authorities and are subject to change without notice. Verify current government fees directly at investindubai.gov.ae or with the relevant Free Zone authority before making any financial commitments.​

Problem 2: Can a Free Zone Company Legally Sell Products Inside Dubai in 2026?

Yes. As of March 2025, a Free Zone company can legally sell goods and services within Dubai’s mainland market by obtaining a permit under Dubai Executive Council Resolution No. (11) of 2025. 

This ended the biggest historical barrier to a Free Zone General Trading setup—the need for a mainland distributor to reach UAE customers.​​

What Is Dubai Executive Council Resolution No. (11) of 2025?

Dubai Executive Council Resolution No. (11) of 2025 was signed by H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister, and Minister of Defence of the UAE, published in the Official Gazette on 3 March 2025, and took immediate effect. 

It introduced a structured legal framework allowing Free Zone entities to conduct licensed business activities on the Dubai mainland without establishing a separate onshore LLC. The only exception is DIFC-registered entities, which remain under a separate regulatory regime.

Free Zone companies already conducting mainland activities without authorization must regularize their status within one year of the resolution’s effective date, with a possible one-time extension.​

Three legal pathways for Free Zone companies to access the mainland:

1. Dual License/Branch Permit—Approved jointly by the DET and your Free Zone authority. Annual fee: AED 10,000. Best for companies that regularly operate across both markets.​
2. Temporary Activity Permit—A short-term route for specific, time-limited activities or projects. Fee: AED 5,000.​
3. Direct Mainland LLC — Still the most structurally straightforward option if your entire customer base is inside the UAE.​

How to decide your path:

• 100% UAE-based customers (B2C or local B2B)? A direct Mainland license is simpler and less expensive over 3+ years.​
• Global trader who occasionally sells inside the UAE? A Free Zone license plus a Resolution 11 permit is the optimal hybrid—you keep international trading advantages and gain legal mainland access.​
• Already in a Free Zone and selling locally without a permit? Regularize within one year of March 2025 to avoid penalties.​

Problem 3: Does a Free Zone General Trading License Automatically Give You 0% Corporate Tax?

No. A Free Zone General Trading license does not automatically guarantee a 0% corporate tax rate. The 9% UAE Corporate Tax rate applies to taxable profits exceeding AED 375,000 for both Mainland and Free Zone companies, unless very specific qualifying conditions are met.​​

Who Actually Qualifies for 0% Corporate Tax in a UAE Free Zone?

Achieving 0% corporate tax requires your Free Zone company to obtain Qualifying Free Zone Person (QFZP) status under Federal Decree-Law No. 47 of 2022 on Corporate Tax, as further refined by Ministerial Decision No. 229 of 2025. For QFZP status, your business must meet all of the following conditions:

• Be incorporated and maintain adequate physical substance inside a UAE Free Zone
• Derive income exclusively from Qualifying Activities with Qualifying Customers
• Prepare annual audited financial statements
• Comply with applicable transfer pricing rules under UAE CT legislation
• Not elect to be taxed under the standard UAE Corporate Tax regime
• Keep non-qualifying income below the de minimis threshold

The critical rule specific to General Trading companies:

The distribution of physical goods qualifies for the 0% tax rate only if those goods are imported through and distributed from an FTA-recognized Designated Zone such as JAFZA (Jebel Ali Free Zone Authority). If you’re trading from a standard Free Zone (not a Designated Zone) or conducting B2C sales, that income is disqualified and taxed at 9%.​​

Real scenario: A Hong Kong-based consumer goods company set up in a standard Dubai Free Zone expecting 0% tax. 

Their accountant confirmed post-setup that because they were selling to UAE retail stores (not B2B international buyers) from a non-Designated Zone, all profits above AED 375,000 were taxed at 9%. 

Moving to JAFZA with a physical warehouse would have qualified them but that came with significantly higher overhead.

Disclaimer: Corporate tax eligibility depends entirely on your specific business structure, revenue streams, and compliance status. Verify your position with a UAE-registered tax advisor and check current FTA guidance at tax.gov.ae before making any tax-related decisions.​

Also Read: Off-Plan vs. Secondary Market Profitability in Dubai: The Investor’s Guide to UAE Business Setup and Real Estate Wealth

Problem 4: Why Do UAE Banks Keep Rejecting Free Zone Company Bank Account Applications?

UAE banks reject Free Zone company bank account applications when the company cannot demonstrate adequate physical economic substance because virtual offices and flexi-desk setups fail the verification requirements banks are legally obligated to apply under the UAE’s AML/CFT framework. This is not a discretionary bank policy. It is a regulatory obligation.​​

What Does UAE Law Require Banks to Verify Before Opening a Business Account?

The UAE’s AML/CFT framework is governed by Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering and Countering the Financing of Terrorism. 

The Central Bank of the UAE established a dedicated AML/CFT department in August 2020 to supervise all licensed financial institutions operating in the country. Banks are required to conduct full Customer Due Diligence (CDD), verify beneficial ownership, assess the source of funds, and maintain records for a minimum of five years.

All financial entities and Designated Non-Financial Businesses and Professions (DNFBPs)—a defined category that includes real estate brokers, dealers in precious metals and gemstones, independent accountants, and corporate service providers are required to register on the goAML platform managed by the Financial Intelligence Unit (FIU). General Trading companies that do not fall under a DNFBP category are not directly subject to goAML registration obligations but remain subject to banks’ CDD requirements under the broader AML/CFT framework. 

When a bank sees a General Trading company registered to a virtual desk address with no physical lease, it has no verifiable evidence of UAE economic substance. That triggers a rejection not because of the business type, but because the bank cannot complete its legally required due diligence.​​

Two proven structural fixes:

Fix 1 — Choose Mainland (fastest resolution): Mainland companies are legally required to register a physical commercial lease through Dubai’s Ejari system before license issuance. This registered Ejari lease is the single strongest proof of economic substance you can provide a bank and it comes automatically with every Mainland setup.​​

Fix 2 — Get a physical, dedicated office in your Free Zone: If you’re committed to a Free Zone structure, budget for a physical office space inside the zone, not a flexi-desk or virtual address. Major UAE banks, including Emirates NBD, Mashreq, and ADCB require demonstrable substance before approving corporate accounts for General Trading companies.​​

Corporate bank account checklist for General Trading companies in Dubai:

• Physical office with signed, registered lease (Ejari for Mainland; zone lease for Free Zone)​
• Detailed business plan specifying trading activities, suppliers, buyers, and revenue model
• Proof of source of funds and initial capital
• Shareholder and beneficial owner identification documents
• Bank statements from existing accounts (3–6 months minimum)
• Audited financial statements (for established companies)
• VAT/Tax Registration Number if applicable​
• goAML registration confirmation (for applicable entity types)​

Average bank account activation timeline after full document submission: 2–4 weeks.​

Problem 5: Do You Still Need to Give 51% of Your Dubai Mainland Company to a Local Emirati Partner?

No. This requirement no longer exists. Foreign investors can hold 100% legal and operational ownership of a Dubai Mainland General Trading LLC, with no obligation to share equity with a UAE national. This law changed in 2020 and is now fully in effect.​​

When Did the UAE Abolish the Local Sponsor Requirement for Mainland Companies?

Federal Decree-Law No. 26 of 2020 officially abolished the 51% UAE national shareholding requirement that existed under Federal Law No. 2 of 2015. 

Dubai’s government now permits 100% foreign ownership across more than 1,000 commercial and industrial activities, explicitly including General Trading. 

The current governing legislation is Federal Decree-Law No. 32 of 2021 on Commercial Companies, which consolidated these foreign ownership provisions.

Activities that remain restricted are those classified as having “strategic impact,” limited to sectors such as defense, certain banking activities, and telecommunications governed by Cabinet Decision No. 55 of 2021. General Trading is not on this restricted list.

What 100% ownership means for you in practice:

• You retain 100% of all profits—no revenue-sharing with a local partner​
• You have complete operational control and all decision-making authority​
• You can appoint a UAE national as a Local Service Agent for specific government-facing administrative tasks if required—but this is a paid service relationship, not an equity stake​

Real scenario: Priya, a Malaysian entrepreneur selling industrial components, delayed her Mainland setup by 14 months because her agent told her she’d need a local Emirati partner. 

After consulting with JSB Incorporation, Priya learned the law had changed six years earlier. She set up a 100% foreign-owned Mainland LLC, registered her Ejari office, opened her business bank account in 18 days, and began selling directly to UAE contractors—no partner, no shared profit, and no delays.

How Do You Set Up a General Trading Company in Dubai in 2026? (Step-by-Step)

Setting up a General Trading company in Dubai takes 7–10 working days on average when all documents are ready and no restricted-activity approvals are required. Here are the exact steps for both Mainland and Free Zone routes.​

Step 1: Choose your jurisdiction.

Use the decision matrix below to select Mainland or Free Zone based on your target market, tax strategy, and banking needs. This one decision determines everything downstream.​

Step 2: Select your legal structure.

For most General Trading businesses, a Mainland LLC or Free Zone LLC (FZ-LLC) is the standard structure. Both allow 100% foreign ownership.​

Step 3: Reserve your trade name.

Submit your preferred trade name to the DET (Mainland) or the relevant Free Zone authority. Names must reflect your business activity and cannot infringe existing trademarks. Approval takes 2–3 working days.​

Step 4: Obtain initial approval.

The DET or Free Zone authority, confirms no regulatory objection to your business. This is not your final license; it authorizes you to proceed. Non-GCC foreign investors setting up on the Mainland must obtain General Directorate of Identity and Foreigners Affairs—Dubai (GDRFA) clearance at this stage.​

Step 5: Arrange your physical office space.

For Mainland: signing a commercial lease and registering it via the Ejari system is legally mandatory. For Free Zone: a physical, dedicated office is strongly recommended for banking success.​​

Step 6: Prepare your documents.

Core documents required for both Mainland and Free Zone:​

• Passport copies of all shareholders
• UAE residence visa or entry permit (for non-GCC nationals)
• Memorandum of Association (MoA)
• Detailed business plan
• Proof of office lease

Step 7: Submit your license application.

Submit to DET (Mainland) or the Free Zone authority with all supporting documents. License issuance typically takes 3–7 working days.​

Step 8: Open your corporate bank account.

Submit your license, Ejari, MoA, shareholder documents, and business plan to your chosen UAE bank. Allow 2–4 weeks for full account activation.​

Step 9: Register for Corporate Tax.

Register with the FTA within 3 months of your date of incorporation or establishment. Verify your specific registration deadline, as deadlines are linked to your license issuance date under FTA Decision No. 3 of 2024.

Step 10: Register for VAT and Customs.

VAT registration is mandatory if annual taxable turnover exceeds AED 375,000, with voluntary registration available from AED 187,500. Customs registration through the Federal Authority for Identity, Citizenship, Customs and Port Security (ICP) is required for all import/export operations.​

Also Read: Dubai Business Setup Under 25,000 AED: Mainland or Free Zone?

Free Zone vs. Mainland for General Trading: Which one is right for you 

Choose your structure based on your business model—not the headline license price.

Frequently Asked Questions

Q: Why is my consultant charging an extra AED 15,000 for a Dubai Mainland General Trading license?

A: This is an official, mandatory government activity fee charged by the DET specifically for the “General Trading” classification — applied on top of standard license fees. It is not a consultant markup. Verify exact current fees at investindubai.gov.ae.​

Q: Can a Free Zone company legally sell goods inside Dubai in 2026?

A: Yes. Dubai Executive Council Resolution No. (11) of 2025, effective March 2025, allows Free Zone companies to operate on the mainland via a DET-approved branch permit (AED 10,000/year) or a temporary activity permit (AED 5,000). DIFC-registered entities are excluded.​

Q: Does a Free Zone General Trading license guarantee 0% corporate tax?

A: No. The 9% UAE Corporate Tax rate applies to profits above AED 375,000 for both Mainland and Free Zone companies. The 0% rate on goods distribution requires QFZP status and operation from an FTA-recognized Designated Zone such as JAFZA with B2B transactions only, not standard B2C retail.​

Q: Do I need a local Emirati partner for a Mainland General Trading LLC in Dubai?

A: No. Under Federal Decree-Law No. 26 of 2020, foreign investors hold 100% ownership of a Mainland LLC for General Trading across 1,000+ commercial activities in Dubai. No local equity partner is required.​

Q: Why do UAE banks reject Free Zone company bank account applications?

A: UAE banks are legally required to verify physical economic substance under Federal Decree-Law No. 20 of 2018 on AML/CFT, supervised by the Central Bank of the UAE. Virtual offices and flexi-desks cannot satisfy this requirement. A registered Ejari lease (Mainland) or physical office inside a Free Zone resolves this.​

Q: How long does it take to get a General Trading license in Dubai in 2026?

A: License issuance takes 3–7 working days after full document submission for both Mainland and Free Zone setups. Add 2–3 days for trade name approval and 2–4 weeks for bank account activation.

Q: What is the minimum share capital required for a Dubai General Trading company?

A: For a Dubai Mainland LLC, no minimum share capital is typically required. For Free Zones, it varies; DMCC requires a minimum of AED 1,000,000 specifically for General Trading licenses. Always confirm with your chosen Free Zone authority before applying.​

Set Up the Right Way with JSB Incorporation

The right jurisdiction for your General Trading company depends on one thing: your specific business model. Mainland if your customers are inside the UAE. Free Zone with a Designated Zone structure if you need QFZP tax status. The hybrid approach if you need both.

At JSB Incorporation, our team has guided entrepreneurs through UAE company formation with transparent pricing, end-to-end support, and zero surprises after the license is issued. From jurisdiction selection and DET approvals to corporate bank account opening and VAT registration, we handle every step.

Get in touch today and let’s match the right structure to your trading business before you spend a dirham in the wrong direction.

Book your free consultation call today with the experts of JSB Incorporation to learn more.