Dubai has introduced a transformative framework enabling Free Zone companies to extend their operations into the mainland without establishing a separate mainland entity. Issued under Executive Council Resolution No. (11) of 2025, the framework administered by the Department of Economy and Tourism (DET) including the Free Zone Mainland Operating Permit marks a pivotal step toward seamless business integration across the emirate’s economic zones. This Resolution is a new legislative framework that leverages the Dubai Unified License (DUL) system to allow Dubai Free Zone companies to operate directly in the mainland.
Key Highlights and Framework Overview
The DET-administered framework enables eligible more than 10,000 Free Zone companies to conduct permitted commercial activities in the mainland. A Free Zone Mainland Operating Permit, valid for six months and renewable for an equal term at a fee of AED 5,000, offers a flexible, cost-efficient route for Free Zone entities to expand their mainland presence without forming a separate entity. This Resolution does not apply to financial establishments licensed to operate in the DIFC.
Applicable activities designated by DET including technology, consultancy, design and trading, the framework provides three access routes:
- establishing a mainland branch
- obtaining a dual licence for a Free Zone branch
- securing a temporary six-month permit for specific activities.
This tiered system allows businesses to select the model best suited to their operational and strategic needs.
For context under the UAE Corporate Tax Law, mainland-derived income may be subject to the 9% corporate tax. Companies should maintain separate financial records for mainland and Free Zone activities to support transparency and compliance. The framework also allows Free Zone establishments to deploy existing Free Zone registered employees on authorized mainland activities without new visas or hires.
Economically, the initiative is projected to boost cross-jurisdictional activity by 15–20% within its first year and aligns with the Dubai Economic Agenda D33, which targets doubling the emirate’s economy by 2033. The framework currently excludes DIFC entities and regulated sectors, though future expansions are anticipated as implementation progresses.
Compliance and Transition (Article 13 of the Resolution)
Free Zone establishments have one year to regularise their position under the new system. During this transitional phase, entities should align their operations with DET requirements, update records, segregate financial accounts, and ensure full tax and regulatory compliance for mainland activities.
Regulatory and Tax Considerations
Mainland activities are subject to Dubai legislation, audit and inspection in coordination with DET and the relevant Licensing Authority. In addition, mainland-related income is subject to 9% corporate tax, while Free Zone income continues to benefit from applicable exemptions.
Strategic Implications
The introduction of the Free Zone Mainland Operating Permit marks a significant advancement in Dubai’s business liberalization strategy, creating stronger links between Free Zones and the mainland economy. By bridging regulatory boundaries, it enables Free Zone entities to access new markets, bid for government contracts, and engage in broader commercial ventures all while maintaining their established Free Zone structure.
This integrated model reinforces Dubai’s standing as a global hub for investment and innovation, furthering its long-term goal of fostering an agile, interconnected, and competitive business ecosystem.
Should you wish to explore the practical implications of these developments or their potential impact on your business, our legal team would be pleased to assist. You are welcome to contact Suneer Kumar at suneer@alsuwaidi.ae , Vida Grace Serrano at vida@alsuwaidi.ae, or Mamdouh Tawfik at m.tawfik@alsuwaidi.ae