The UAE government has recently announced a major change that allows companies set up in free zones to now operate in the mainland. This exciting update, part of Executive Council Resolution No. (11) of 2025, was introduced by H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai. The move is part of Dubai’s D33 Economic Agenda, which aims to double the city’s economy and make it one of the top three business hubs in the world.
New Business Freedom for Free Zone Companies
Previously, businesses registered in Dubai’s free zones were restricted to operating only within their respective zones or outside the UAE. To conduct business in the mainland, they had to either partner with a mainland-licensed company or set up a separate entity, which involved additional costs and legal requirements.
Now, under the new resolution (Executive Council Resolution No. 11 of 2025), companies licensed by a free zone authority can now expand into mainland Dubai. This is subject to obtaining the necessary licenses and permits from the Dubai Department of Economy and Tourism (DET).
The move aligns with the Dubai Economic Agenda (D33), which aims to solidify Dubai’s position as a global economic powerhouse. By allowing free zone businesses to seamlessly integrate into the mainland, Dubai is further enhancing its competitiveness and economic appeal.
To ensure a smooth transition, companies must adhere to federal and local regulations related to their activities and maintain separate financial records for their operations conducted outside the free zone. Additionally, if businesses wish to operate outside Dubai, they must secure the required licenses and permits from the relevant authorities in the locations where they plan to carry out their activities.
Key Rules for Free Zone Companies Expanding to the Mainland
As exciting as this new policy is, businesses must still follow specific regulations to ensure a smooth transition from free zone operations to the mainland. Here’s what you need to know:
1. Free Zone Companies Can Now Expand to the Mainland
Companies set up in over 40 free zones across Dubai can now sell products and services directly in the mainland. This means they no longer need third-party distributors or local service agents to reach mainland customers. However, companies must apply for a special license or permit from DET to legally operate in the mainland.
2. Licensing Requirements
Companies must obtain either:
- A branch license to set up an extension in the mainland.
- A special activity permit for conducting specific business operations in the mainland.
3. Annual Renewal
The license is valid for one year and must be renewed annually.
4. Regulatory Compliance
Businesses must adhere to federal and local laws governing their activities. Companies must also comply with the UAE’s Anti-Money Laundering (AML) laws and corporate governance policies to avoid any legal issues.
5. Separate Financial Records
Companies must maintain separate financial records for free zone and mainland operations to ensure regulatory compliance.
6. Some Exceptions Apply
Financial institutions licensed in the Dubai International Financial Centre (DIFC) are not covered under this resolution, as DIFC has its own legal framework.
How Does This Benefit Free Zone Businesses in Dubai?
This update is a huge opportunity for businesses in Dubai’s free zones. Previously, these companies had to rely on third-party agents to access the mainland market, which increased costs and limited direct customer interactions. Now, they can sell directly, expand faster, and increase their profits.
1. Access to a Larger Market
Free zone companies can now sell directly to mainland businesses and consumers, increasing revenue potential and eliminating the need for intermediaries.
2. Lower Costs & Faster Growth
Previously, businesses had to establish a mainland branch to operate in Dubai, which meant additional costs for registration, sponsorship, and office space. With this new regulation, expansion is now more affordable and efficient.
3. Increased Foreign Investment
This change strengthens Dubai’s reputation as a business-friendly city and will likely attract more international companies and entrepreneurs looking for a flexible setup with minimal restrictions.
4. Encouraging Innovation & Economic Growth
With fewer limitations, businesses in technology, e-commerce, consulting, trade, and services can now scale their operations more easily, driving innovation and boosting job creation.
Which Businesses Will Benefit the Most?
Industries that are expected to benefit significantly from this change include:
- E-commerce & Online Retail: Free zone companies can now directly deliver to mainland customers.
- Consulting & Professional Services: Firms can expand their client base without setting up a mainland entity.
- Trading & Import-Export Businesses: Companies can sell products in Dubai’s local market without additional barriers.
- Tech Startups & IT Companies: IT firms can offer services to mainland businesses with ease.
How to Set Up a Business in Dubai Free Zone?
Dubai’s free zones offer benefits like 100% foreign ownership, tax exemptions, and simplified business setup. Here’s how you can start your free zone company:
1. Choose Your Business Structure & Trade Name
Decide on a Free Zone Establishment (FZE) (single owner) or a Free Zone Company (FZC) (multiple owners). Pick a unique trade name that follows the free zone’s guidelines.
2. Select Your Business License
Choose a Trading, Service, or Industrial License based on your activities. Submit your application and required documents to the free zone authority.
3. Find Office Space
Free zones offer flexi-desks, private offices, and warehouses based on your needs. The type of space you choose may affect the number of visas you can apply for.
4. Get Approvals & Register Your Business
Once your application is reviewed, sign the incorporation documents, pay the fees, and receive your business license.
5. Apply for Visas
After obtaining your license, apply for visas for yourself, employees, and dependents.
Read more: How to start a business in Dubai free zone
Ready to Expand Your Business in Dubai Mainland?
If you have a free zone company and want to expand into the mainland, Shuraa Business Setup can guide you through the process. We can help you with obtaining the right DET license and permits, setting up a mainland branch, compliance with UAE business regulations, and managing corporate banking, visas, and office space solutions.
With 25+ years of experience and over 100,000 businesses successfully set up, we make expanding your business in Dubai simple and hassle-free. Contact Shuraa Business Setup today for expert guidance on making the most of this exciting new opportunity.
