Dubai Free Zone Companies Can Now Operate in Dubai Mainland

Dubai Free Zone companies can now operate in the mainland, as a new resolution has been passed by Dubai’s Crown Prince, His Highness Sheikh Hamdan. This revolutionary change has been introduced to strengthen the city’s reputation as an attractive, friendly global investment hub. Besides this, the new resolution also highlights that it will now be easier for even small businesses to expand their operations into new markets. Continue reading to learn more about this revolutionary change introduced to Dubai’s business ecosystem. 

Understanding Free Zone Company Setup in UAE

Before we look at all the details of the latest resolution passed by the Dubai Executive Council, let us briefly understand the free zone company setup in UAE. Many investors and business owners in Dubai and UAE prefer to establish a business in specialized and designated economic areas called free zones. The primary reason for this choice is the excellent benefits, like complete ownership, quick business setup, tax savings, and more. 

Additionally, information about shareholders and companies operating in these self-contained zones is not made public, ensuring better corporate privacy. Each free zone in Dubai is managed by a separate authority, which means businesses need to follow a unique set of rules and license requirements. Previously, companies established in these special zones were not allowed to conduct business with mainland businesses. However, with the new resolution now, they can expand operations on the mainland if they meet all the requirements.

Key Rules for Dubai Free Zone Companies Expanding to the Mainland

On March 17th, 2025, Dubai introduced a new change in business rules that allows Dubai Free Zone Companies to expand their activities into the Mainland. Announced under the Executive Council Resolution No. (11) of 2025, it makes it possible for free zone businesses to apply for a DET license and operate beyond their specific zones. However, this rule does not apply to financial institutions licensed under the DIFC.

1. License Validity

The DET will issue the license for free zone companies expanding into the Dubai mainland. This will feature a validity of one year and can be renewed. They can also apply for a business license that allows the legal conduct of specific activities in the city. The renewal benefit of this license will help businesses maintain uninterrupted operations.

2. Branch Setup Options

This new resolution also makes it possible for free zone businesses to set up a branch in the Dubai Mainland. This rule applies to both companies opening branches in the city and to those whose main office is already in a city’s free zone. Now, businesses can extend their operations on the mainland while keeping their existing main branch in a free zone.

3. Activity Permits

Businesses also need to apply for activity permits from the DET. After securing the permits, they can legally conduct specific business activities in UAE under the new resolution. The guidelines for branch licensing and hiring staff are also explained. A business doesn’t need to completely shift its operations out of the free zone to operate in the Dubai mainland.

4. Regular Inspections

All companies operating in Dubai need to undergo regular inspections by the authorities. The inspections will be done to make sure the businesses follow the rules set by local and federal laws. With expert business setup consultants in Dubai, you can avoid hefty penalties, as they help maintain compliant operations.

5. Separate Account for Free Zone & Mainland Operations

If you’re planning to move from a free zone to mainland company formation in Dubai, you need to maintain two separate accounts for both. This will make it easier for authorities to track your activities and also ensure your compliance with local and federal laws. You can also work with expert business setup consultants in Dubai to make this simpler.

6. Approved Activities List by DET

The DET publishes a detailed list of activities that companies can perform under this new license. When it was announced in March 2024, it was expected that this list would be released within six months of the resolution. This list will help businesses plan successful mainland company formation in Dubai.

7. Operating Outside Dubai 

If you want to expand the operations of your Free Zone Company outside Dubai, you need to obtain permission from the relevant authorities. This will make sure all companies expanding operations are following proper legal rules. 

8. Compliance Timeline

Every business that plans to expand from a free zone company setup in UAE into the mainland in Dubai must meet the new compliance rules within 12 months. If your company needs more time, you can apply for a one-year extension from the DET. 

Greater Business Growth for Free Zone Companies in Dubai 

The new update creates more flexibility for companies set up in free zones. Now they can easily expand operations into new markets, as they don’t need to completely shift their offices to the Dubai mainland. This makes free zone company formation in Dubai a more profitable opportunity for startups and entrepreneurs. 

Additionally, ISEZA, a new free zone for sports and entertainment, was recently announced in Dubai. This move shows that the emirate wants to support new sectors to keep its position as a leading destination for investment and business setup in the UAE.

Impact of Free Zone Companies Expanding into Dubai Mainland

The new update in Dubai business rules highlights the government’s vision to create better opportunities for businesses and job seekers. The emirate is already a preferred destination for global investors planning to enter the UAE market, and this change has reinforced its image as a business-friendly hub. In the previous year, Dubai recorded AED 52.3 billion in Greenfield FDI, showing a 33.2% growth compared to 2023. The newly introduced resolution will allow Dubai Free Zone companies to secure mainland licenses. This update aligns with the city’s D33 agenda, which aims to double its economy in the next 8 years. 

Build Your Business in Dubai with Expert Guidance

By allowing Dubai Free Zone Companies to operate in the mainland, the emirate has created new growth opportunities for them. This new update shows that the emirate aims to simplify business setup and attract more investors worldwide. However, navigating compliance requirements, maintaining separate financial records, and adjusting to new rules might be challenging for businesses. With Start Any Business UAE (India Branch), you can confidently expand your operations in Dubai, as our team manages everything from activity approvals to licensing for our clients. We are trusted among the top-rated business setup consultants in Dubai and support our clients in every step of their journey.

Also Read: Best 5 Investment Opportunities in UAE for Foreign Investors