Dubai Free Zone Companies Can Now Operate in Mainland Dubai
A Major Regulatory Change
Dubai just dropped a game‑changer.
Executive Council Resolution No. 11 of 2025 slashes the boundary between free zones and the mainland. Free zone companies (except those in DIFC) can now operate onshore directly — no more middlemen, no need to carve out separate mainland entities.
This is more than a tweak. It’s a major move under Dubai’s D33 agenda — the mandate to double its economy by 2033.
Free zone businesses can now:
- Apply for a mainland branch license
- Get a hybrid license with headquarters kept in the free zone
- Or use a short‑term, activity‑specific permit (up to six months)
This opens the door to local clients, government contracts, and projects across the whole emirate — without duplicating structures.
What Has Changed?
Until now, free zone companies lived in a bubble.
They could trade inside their zone. Or do business internationally. But the moment they looked toward the mainland, the door shut — unless they set up a separate mainland company or brought in a local partner.
That’s over.
Under Executive Council Resolution No. 11 of 2025, free zone companies — except those in the DIFC doing financial activities — can now operate directly in mainland Dubai.
All they need is a permit from the Dubai Department of Economy and Tourism (DET). No duplicate setups. No sponsor hoops to jump through. Just one legal framework, finally connecting the two worlds.
New Permit & License Options
So how exactly can a free zone company now enter the mainland space?
Dubai has introduced three flexible options, depending on what you want to do — open a full branch, run certain projects, or test the waters.
1. Mainland Branch License
This is for companies that are ready to commit.
You can set up a proper branch office in mainland Dubai — no need to create a new company or find a local partner. It’s still your business, just with a mainland presence.
You’ll use your original trade name and operate legally like any other mainland company.
Great for:
- Long-term expansion
- Serving local clients regularly
- Bidding on government contracts
2. Linked Mainland License
Think of this as a hybrid model.
You keep your main office inside the free zone but get permission to operate in the mainland too. It’s like having a foot in both worlds — you’re still based in the zone, but now legally connected to the mainland market.
Great for:
- Companies that want flexibility
- Managing operations without shifting base
This model also makes compliance easier. One legal structure, two markets.
3. Activity-Specific Permit
This one’s more temporary.
It lets you perform a specific task or project in the mainland, a one-off installation, a limited contract, or a short-term assignment. The permit is valid for up to six months.
You don’t need to open a branch or commit long term, just apply, do the job, and move on.
And There’s More Coming
The Dubai Department of Economy and Tourism (DET) will publish a list of allowed mainland activities by September 20, 2025. That list will show which kinds of work free zone companies can officially take on, so you’ll know what’s possible before applying.
Application Process & Eligibility
Good news: most free zone companies are eligible.
If your business has a valid license from any Dubai free zone and you’re not a financial firm based in DIFC, you can apply. That’s the main requirement.
What You Need to Submit:
- Your current free zone trade license
- Company incorporation documents
- Passport and Emirates ID of the manager or authorized signatory
Pretty straightforward.
If you’re in a regulated sector, like healthcare, education, or anything that needs government oversight — you might need extra approvals from the relevant authority.
For example, a clinic will need sign-off from Dubai Health Authority. A school might need KHDA clearance.
Once your documents are ready, you send them to the Dubai Department of Economy and Tourism (DET). They’re the ones reviewing the application, giving the green light, and issuing the permit or license.
No third parties. No agents. It’s all handled by DET directly.
Compliance Requirements
Getting a permit is just step one. You’ll need to play by the rules to keep it.
1. Keep Separate Financial Records
If you’re working in the mainland, you must track those operations separately.
That means clear books showing what you earned and spent onshore, not mixed in with your free zone accounts.
Why? Because mainland activities may trigger different taxes or regulatory obligations.
Better to stay clean and clear from day one.
2. Follow UAE Laws
Once you’re in the mainland, you’re under both federal and local law.
This includes labor regulations, tax compliance (like Corporate Tax), and having a proper physical presence if your license demands it. No ghost offices allowed.
You’re now part of the onshore ecosystem, so your setup and conduct should reflect that.
3. Regularize If You Were Already Operating Onshore
Some companies were already dipping their toes in mainland waters, however unofficially. If that’s you, Dubai is offering a chance to fix things.
You have 1 year from the law’s start to regularize your status. DET may allow an extension if needed, but it’s smarter to get compliant early and avoid penalties later.
Taxation & Regulatory Impact
Let’s talk money and rules, because operating in the mainland comes with responsibilities.
1. Corporate Tax Still Applies
Even if you’re a free zone company with tax exemptions, mainland profits are taxable.
The 9% UAE corporate tax kicks in for anything you earn onshore. So, if you’re billing mainland clients, that revenue falls under the tax net.
You’ll need to keep your accounting clean and report mainland income separately.
2. VAT Still Counts
If your business hits the VAT threshold (AED 375,000), you need to register, no matter where you’re based.
If you’re already registered, make sure your mainland transactions are properly recorded. If not, and you cross the limit, it’s time to sign up.
3. Renewals and Inspections
All permits and licenses need to be renewed annually. That’s standard.
Also, expect regular inspections by the Dubai Department of Economy and Tourism (DET). They’ll check for compliance — like whether you’re actually doing what your license allows, if your office setup is legit, and whether your documents are in order.
It’s not meant to hassle you — just to keep the system fair and clean.
Benefits for Businesses
This change isn’t just regulatory noise. It’s real opportunity.
1. Direct Access to Mainland Customers
No more middlemen. You can now deal directly with mainland clients, sign contracts, and deliver services, all under your free zone entity.
2. Fewer Headaches, Lower Costs
You don’t need to open a separate mainland company anymore. That means no double licensing, no duplicate admin, and fewer compliance layers to juggle.
3. Keep Your Free Zone Perks
Even while operating in the mainland, your free zone status stays intact.
You still enjoy:
- 100% foreign ownership
- 0% corporate tax on eligible free zone income
- The flexibility that comes with being based in a zone
Only the mainland income gets taxed. The rest stays protected.
4. Government Contracts Are Now In Play
Previously, free zone companies couldn’t bid for many public sector projects. That’s changed. With a DET-issued permit or branch, you can now join government tenders and contracts that require an onshore license.
5. Growth, On Your Terms
Whether you want a full branch or just want to test the market with a short-term permit — you’ve got options.
This system is built for scalable growth, not forced expansion.
Market & Business Response
The reaction? Loud and positive.
Business leaders are calling it a “game changer” and a “gateway to growth.”
And for good reason, it’s the kind of reform people have been asking for.
There’s already been a spike in inquiries and new business registrations since the announcement. Companies that were holding back are now moving fast to enter the mainland market without starting from scratch.
Analysts expect a strong ripple effect:
- More foreign investment
- New jobs
- Increased competition
- And a boost in innovation as companies expand their reach
It’s a big shift, not just in policy, but in mindset. Dubai isn’t just making it easier to do business. It’s making it hard not to.
Next Steps
So, what happens now?
The Dubai Department of Economy and Tourism (DET) will publish the official list of permitted mainland activities by September 20, 2025. That list will clarify exactly which services free zone companies can legally offer onshore.
In the meantime, businesses should:
- Keep an eye on DET updates
- Get legal or licensing advice before applying — no assumptions
- Review internal systems to ensure full compliance, especially around taxes, staffing, and reporting
This reform opens up serious potential. But like any major shift, it rewards those who prepare, not just those who rush in.
Conclusion
This is more than a policy update, it’s a bold step in Dubai’s long game.
Letting free zone companies operate in the mainland brings the city closer to its vision of becoming one of the world’s top business hubs. It tears down walls, clears up red tape, and gives companies the flexibility to grow without losing the advantages they already have.
For businesses ready to expand, this isn’t just an opportunity. It’s an open door.
References
- Authority, Dubai Health. DHA Home. https://www.dha.gov.ae/en. Accessed 22 Jul. 2025.
- Department of Economy and Tourism. https://www.dubaidet.gov.ae/en/.
- DET Licences and Permits. https://www.dubaidet.gov.ae/en/licences-and-permits.
- Dubai Economic Agenda ‘D33’. https://www.investindubai.gov.ae/en/why-dubai/d33-agenda.
- Executive Council Resolution No. (11) of 2025 Regulating the Conduct of Free Zone Establishments’ Activities within the Emirate of Dubai. https://dlp.dubai.gov.ae/Legislation%20Reference/2025/Executive%20Council%20Resolution%20No.%20(11)%20of%202025%20Regulating%20the%20Conduct%20of%20Free%20Zone%20Establishments%E2%80%99%20Activities.pdf.
- Federal Law. https://u.ae/en/about-the-uae/the-uae-government/the-federal-judiciary.
- KHDA. https://web.khda.gov.ae/en/.
- Mainland Companies. https://www.investindubai.gov.ae/en/business-setup/mainland-companies.
- United Arab Emirates Legislations. https://uaelegislation.gov.ae/en.
- Young, Ernst &. Dual Licence | ADRA. https://www.adra.gov.ae/en/establishing/dual-licence.
