Dubai is home to multiple free zones, which are designated areas offering businesses 100% foreign ownership, tax exemptions, and simplified trade regulations. These zones cater to various industries, such as finance, technology, logistics, and media, attracting international companies looking for a strategic base in the Middle East. However, until now, businesses operating in free zones were restricted from directly engaging in commercial activities on the Dubai mainland unless they partnered with a local distributor or established a separate mainland entity.
In a significant move to enhance Dubai’s business landscape, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister, and Minister of Defence, has issued Executive Council Resolution No. (11) of 2025.
This resolution allows free zone establishments to operate outside their designated zones within Dubai, aligning with the goals of the Dubai Economic Agenda, D33, which aims to double the size of Dubai’s economy by 2033 and position it among the world’s top three economic cities.
New Regulations for Free Zone Companies Operating on Mainland
Under the new resolution, companies licensed by a free zone authority can conduct business on the Dubai mainland, provided they obtain the necessary licenses or permits from the Dubai Department of Economy and Tourism (DET).
The resolution mandates that establishments comply with all applicable federal and local regulations related to their activities. They are also required to maintain separate financial records for operations conducted outside the free zone.
The DET is authorized to grant permissions for free zone establishments to operate on the mainland by issuing licenses for establishing a branch within the emirate or for a branch with its headquarters in the free zone. These licenses are valid for one year and can be renewed.
Within six months, the DET, in coordination with the licensing authority, is required to issue a list of economic activities that establishments can conduct in Dubai.
Establishments operating outside the free zone and within Dubai when this resolution takes effect must comply with its provisions within one year from its effective date, with a possible extension of an additional year if needed.
Impact on Dubai’s Business Environment
This resolution underscores Dubai’s dedication to supporting businesses, encouraging economic activity, job creation, and innovation, positioning the city as a global hub for investment and entrepreneurship.
The resolution annuls any other resolution that conflicts with it and will be effective from the date of its publication in the Official Gazette.
Souce: Mediaoffice UAE
