Free Zones
UAE Free Zone vs Mainland Employment: Complete Comparison 2025
Compare free zone and mainland employment in UAE. Understand differences in labor law, WPS, visas, leave entitlements, and gratuity between DIFC, ADGM, and mainland.
Published: January 23, 2026
14 min read read
8 topics covered
Quick Summary: Compare free zone and mainland employment in UAE. Understand differences in labor law, WPS, visas, leave entitlements, and gratuity between DIFC, ADGM, and mainland.
Understanding the difference between free zone and mainland employment is essential for both employers and employees in the UAE. While mainland companies fall directly under MOHRE and Federal Labor Law, free zones have their own regulations that may offer different benefits and processes. This guide helps you understand which environment best suits your needs.
| Aspect | Details |
|---|---|
| Free Zone Law | Zone regulations + Federal Law backup |
| Mainland Law | Federal Decree-Law 33/2021 |
| Free Zone Authority | Zone Authority |
| Mainland Authority | MOHRE |
| WPS | Mandatory for most zones and mainland |
Understanding the Difference
What makes free zones different from mainland UAE for employment purposes.
What is a Free Zone?
Free zones are designated areas in the UAE offering 100% foreign ownership, tax benefits within limits, simplified regulations, specific industry focus, and their own authority and rules. Examples include DMCC, JAFZA, TECOM, DIFC, and ADGM.
What is Mainland?
Mainland refers to any UAE location outside free zones with full MOHRE jurisdiction, unrestricted trading within UAE, standard licensing process, and Federal labor law applies directly.
Which Zones Have Independent Laws?
DIFC and ADGM have fully independent employment laws based on common law. Most other zones like DMCC, JAFZA, TECOM, and Dubai South follow Federal Law with additional zone regulations.
Key Employment Differences
Understanding how employment differs between free zones and mainland.
Labor Law Application
Free zones primarily follow zone employment regulations with Federal law as backup. Mainland follows Federal Decree-Law 33/2021 directly. Special courts exist only in DIFC and ADGM. For most free zones, dispute resolution starts with the zone authority, then proceeds to courts.
Contracts
Free zone contracts are registered through the zone authority portal with varying contract types by zone. English language is standard. Mainland contracts are registered through MOHRE portal, are fixed-term only, and must be in Arabic though bilingual is acceptable.
Visa and Sponsorship
In both cases, the company sponsors the employee. Free zone visa quotas are based on package or office space, with zone-issued labor cards. Mainland quotas are based on office space with MOHRE-issued labor cards. Immigration through GDRFA is the same for both.
| Aspect | Free Zone | Mainland |
|---|---|---|
| Primary law | Zone Regulations + Federal | Federal Law 33/2021 |
| Labor authority | Zone Authority | MOHRE |
| Contract registration | Zone portal | MOHRE portal |
| Labor card | Zone-issued | MOHRE-issued |
| Trade in UAE | Restricted (needs agent) | Full access |
DIFC and ADGM Employment Laws
These financial free zones have independent employment laws that differ significantly from Federal Law.
DIFC Employment Law
DIFC follows a common law system with DIFC Courts handling disputes. Annual leave is 20 working days compared to 30 calendar days on mainland. Sick leave is 60 working days. The DEWS (defined contribution pension) replaces traditional gratuity. Probation maximum is 6 months with minimum notice of 7 days for less than 3 months service.
DEWS System
DEWS (DIFC Employee Workplace Savings) is a monthly contribution by the employer to an employee-owned account. It is portable between DIFC employers and invested rather than just held. It replaces traditional gratuity calculation.
ADGM Employment (2025)
ADGM features 20 working days annual leave with explicit coverage for remote workers starting in 2025. Part-time workers receive proportional entitlements. Probation maximum is 6 months. DEWS-style or gratuity options are available.
| Feature | DIFC | ADGM | Mainland |
|---|---|---|---|
| Legal system | Common law | Common law | Civil law |
| Annual leave | 20 working days | 20 working days | 30 calendar days |
| Sick leave | 60 working days | Similar | 90 calendar days |
| End of service | DEWS pension | DEWS option | Traditional gratuity |
| Dispute forum | DIFC Courts | ADGM Courts | MOHRE + UAE Courts |
Leave and Gratuity Comparison
Key differences in employee benefits between jurisdictions.
Annual Leave
Most free zones following Federal Law provide 30 calendar days after 1 year of service. DIFC and ADGM provide 20 working days with carry forward allowed. Mainland provides 30 calendar days calculated as calendar days.
Sick Leave
Most free zones and mainland follow Federal Law with 90 days total: 15 days full pay, 30 days half pay, 45 days unpaid. DIFC provides 60 working days: 10 days full pay, 20 days half pay, 30 days unpaid.
Gratuity
Most free zones and mainland follow the standard formula of 21 days per year for years 1-5, then 30 days per year for 5+ years, capped at 2 years salary. DIFC and ADGM use DEWS: 5.83% monthly contribution for years 1-5, then 8.33% for 5+ years, with no cap and portability between employers.
Choosing the Right Option
Guidance for employers and employees on selecting between free zone and mainland.
Choose Free Zone If
Your business is export or international focused, a specific industry zone matches your sector like tech or media, you want a simpler setup process, you prefer the zone's ecosystem and networking, you do not need to trade directly in the UAE market, or you need cost-effective options for small teams.
Choose Mainland If
You need to trade directly in the UAE, require government contracts, operate retail with physical stores, work on construction projects, want flexibility in location, or need multiple branches across the UAE.
For Employees
Before joining a free zone company, check which zone it is in as different rules apply. DIFC and ADGM are very different from other zones. Verify leave entitlements, whether it is gratuity or DEWS, and confirm the visa sponsor is the zone company.
Dispute Resolution
How labor disputes are handled in different jurisdictions.
Free Zone (Non-DIFC/ADGM)
Start with a zone authority complaint, then attempt mediation. For Federal law matters, proceed to MOHRE, then to UAE Labor Courts if unresolved.
DIFC Disputes
Options include DIFC-LCIA Arbitration Centre, DIFC Courts Small Claims Tribunal for smaller matters, DIFC Court of First Instance, and DIFC Court of Appeal.
ADGM Disputes
Use ADGM Courts with Small Claims Tribunal for claims under AED 100,000. Court of First Instance handles larger claims, with ADGM Court of Appeal for appeals.
Mainland Disputes
File a MOHRE complaint first for mediation. If unresolved, proceed to Labor Court, then Appeal court if necessary.
Frequently Asked Questions
Multi-Zone HR Management
NeuralHR supports all UAE free zones with zone-specific configurations for contracts, WPS, leave calculations, and gratuity/DEWS.
Was this guide helpful?
NeuralHR Team
VerifiedUAE HR Compliance Experts
Our team of HR professionals and legal experts specializes in UAE labor law compliance, with extensive experience helping businesses navigate MOHRE regulations, Emiratisation requirements, and workforce management in the UAE and GCC region.
Related Guides
Free Zones
DMCC Employment Guide: HR Compliance in Dubai Multi Commodities Centre 2025
Complete DMCC employment guide for employers. WPS compliance, visa quotas, contract registration, and HR requirements in JLT free zone.
Read more
Free Zones
JAFZA Employment Guide: HR Compliance in Jebel Ali Free Zone 2025
Complete JAFZA employment guide for employers. Personnel Sponsorship Agreement, bank guarantee, WPS compliance, and HR requirements in Jebel Ali.
Read more
Free Zones
TECOM Employment Guide: DIC, DMC and Knowledge Park HR Compliance 2025
Complete TECOM employment guide for Dubai Internet City, Dubai Media City, and Knowledge Park. Visa process, freelance permits, and HR compliance.
Read more