Dubai Eases Restrictions for Free Zone Companies Seeking Mainland Presence

Doing business in Dubai has been continuously evolving over the past couple of decades and this change shows no signs of slowing down. After all, change is inevitable for a metropolis that aspires to establish its position at the forefront of global economic activity and aims to double the size of its economy by 2033, as outlined in the Dubai Economic Agenda D33. Now, the issuance of Executive Council Resolution No. (11) of 2025 by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai, means that business owners in Dubai's several Free Zones might soon have to reconsider their operating model.

Dubai Connects Free Zones to the Mainland

So, first and foremost, what exactly is this new resolution about? Traditionally, Free Zone entities were restricted to operating within their designated zones or outside the UAE, unless they partnered with a mainland distributor or obtained special permits. Now, the new framework allows Free Zone establishments to operate within mainland Dubai, provided they secure the necessary licenses from the Dubai Department of Economy and Tourism (DET). The DET is authorized to grant establishments permission through various licensing options: establishing a branch within the emirate, licensing a branch with headquarters in the Free Zone, or issuing permits for specific activities.

It's worth noting that businesses will have to maintain separate financial records for their operations outside the Free Zone and adhere to all applicable federal and local regulations related to their activities. What's more, these licenses are supposed to remain valid for one year with renewal options.

This initiative reflects Dubai's commitment to creating an even more business-friendly environment that accelerates economic activity and encourages innovation. By enabling Free Zone businesses to seamlessly integrate into the mainland, Dubai strengthens its reputation as a global business hub with business-friendly regulations. Establishments already operating outside Free Zones when this resolution takes effect must comply with its provisions within one year, with possible extension for an additional year at the DET Director General's discretion. The resolution, which supersedes any conflicting regulations, takes effect upon its publication in the Official Gazette and excludes financial institutions licensed within the Dubai International Financial Centre (DIFC) from its provisions.

The Real World Impact

This new resolution is a step in the right direction for service providers, digital businesses and e-commerce companies that had a hard time reaching their clients in the mainland. After securing the required operational permits, these entities should be able to legally invoice and serve clients directly in the mainland with way less hassle.

The shift demonstrates Dubai's ongoing efforts to harmonize its regulatory frameworks, attract more foreign investment and support business scalability. Nonetheless, companies must still evaluate their specific licensing requirements and ensure compliance with tax and regulatory obligations, especially in light of the new corporate tax framework.

Without a doubt, this could very well be game-changing news for companies established in Free Zones, but we currently have a few more months to wait – six in total, counting from the introduction of the Executive Council Resolution No. (11) of 2025 in March – before getting all of the important details, including the list of the activities that will be subject to the regulation.

While it's natural to be wondering about the potential benefits and costs of expanding your business to the mainland, the reality is that there is no one-size-fits-all answer. In fact, this development underlines the significance of having a trusted partner offering tailored advisory services and corporate structuring solutions. When seeking sustainable growth and long-term financial security, collaborating with a team of elite experts committed to simplifying complex processes and delivering effective, tailored strategies, is the only way forward.