What is the difference between an offshore and free zone company?

There are a few major differences:

1. An offshore company is not allowed to do business in the UAE, but a free zone company can import goods and provide services in the territory of the UAE.
2. An offshore company is not eligible for UAE resident visas, whereas a free zone company is usually entitled for resident visas.
3. А Free Zone company may be liable for VAT if it does business in the UAE, but an offshore company never has to pay UAE VAT.
4. An offshore company is the cheapest type of UAE corporate entity, and any free zone would always cost higher.