Dubai’s free zones have been an attraction to foreign companies with appealing advantages, including tax benefits, an easy business formation process, and 100% foreign ownership. But the companies that run from free zones were not allowed to function in the busy mainland of Dubai, outside those zones. As per the previous regulations, running a free zone business in the mainland required establishing an independent mainland company, which doubled expenses, complexity, and legal requirements. That paradigm has recently changed, offering a great opportunity for free zone firms.
A new framework, Executive Council Resolution No. (11) of 2025 has been issued under the authority of the Crown Prince of Dubai and Executive Council Chairman, H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum. Without requiring a totally separate mainland firm, free zone businesses can now lawfully operate within the larger Emirate of Dubai (the mainland). This is a well-structured expansion opportunity with clear channels and criteria, ensuring everything stays organised. Consider it more like creating tightly monitored bridges between the free zone environment and the sizable Dubai market than it is like breaking down walls between the two business eco-systems.
Free Zone Meets Mainland
With the help of important Dubai laws and federal laws, the Resolution establishes a clear principle:
Who Does It Apply To:
Free zone establishments that want to operate outside their designated free zone but within Dubai Emirate’s borders, provided they have obtained a license from their respective free zone authority (the “Licensing Authority”).
Who Doesn’t it Apply To:
Financial institutions in the Dubai International Financial Centre (DIFC) are still governed by their own regulations.
Three Ways to Start Business Activity on the Mainland
Mandatory independent entities are no more a thing for most free zone businesses. The Resolution allows the Department of Economy and Tourism (DET) three different ways to approve your free zone business to operate on the mainland.
Dedicated Branch Licence Inside Mainland:
This enables you to open a real branch office on the mainland of Dubai. It’s like placing a direct link to your business in the heart of the city.
The Free Zone-Based Branch Licence :
This license enables you to open a branch in your current free zone, but more importantly, it gives this branch the special authority to carry out commercial operations on the Dubai mainland beyond the boundaries of the free zone. Your reach expands, but your operating base remains constant.
The Permit for Temporary Activities:
This comes into play when a business needs to complete a short-term mainland contract, execute a special project, or take part in an exhibition on the mainland. This permission allows you to carry out specific operations on the mainland without opening a complete branch for a maximum of six months. Ideal for experimenting or fulfilling certain, deadline-driven requirements.
Application Process for free zone companies to run on the Mainland
The approval to function on the mainland is not automatically secured for every free zone company. Instead, the Resolution outlines precise guidelines that serve as guardrails to guarantee adherence to adequate supervision. Although there are differences among the various license types, all applications have certain characteristics:
Formal Application:
You must submit a complete application using DET’s prescribed forms and following their official processes.
Free Zone Green Light:
It is extremely important that you have your Free Zone Licensing Authority’s prior approval. And your growth ambitions must align with your free zone.
Approvals Relevant to Business Activities:
Before DET issues the licence/permit, you must obtain the approval of other relevant Dubai Government bodies that oversee the activity you intend to carry out on the mainland (for example, some healthcare, education, or logistics operations may require extra clearances).
A valid license for the free zone:
You must have a valid and up-to-date free zone operating license for your business.
Documentation dossier:
A copy of your free zone trade license, your company’s Memorandum of Association (MoA), and the manager’s identity (passport and Emirates ID) should all be ready to be submitted.
Fee Payment:
There is a fee for approvals, which must be paid to DET.
DET Director General’s Conditions:
The DET leadership retains the right to set additional conditions through subsequent resolutions, so staying updated is key.
Legal Structure Clarity:
No branch formed under these licenses has a legal identity separate from its parent firm in the free zone. It simplifies structure and liability while remaining an essential component of the original business.
The Price of Expansion: DET Fee Structure for Licences and Permits
| Fee Type | Description | Amount (AED) | Frequency / Duration |
| Branch Licence Fee | Fee for issuing or renewing an Establishment’s Licence to establish a branch operating out of the Free Zone. | AED 10,000.00 | Per Year |
| Temporary Activity Permit Fee | Fee for issuing or renewing a temporary Permit for an Establishment to conduct specific Activities in the Emirate. | AED 5,000.00 | Per Permit Issued/Renewed |
Utilising the Existing Workforce
One of the great advantages of the Resolution is how it benefits your team. You’re welcome to have your existing staff, who are already registered at your free zone’s location, manage these new mainland activities if your free zone business receives the green light to operate on the mainland. Even better, within the free zone structure, your employees can continue to enjoy all the employment perks available to them, like visa sponsorship and benefit packages. This way, you make the most of your current human resources and avoid the costly and complex process of mainland labour contracts just for these services.
Adhering to the rules on the mainland
Under this new arrangement, doing business on the mainland does not entail being in a regulatory bubble. The resolution makes it clear that establishments using these licenses or permits to conduct business within the Emirate (mainland) are subject to all relevant local and federal laws that regulate their particular operations. This involves complying by consumer protection legislation and mainland business regulations, and most importantly, being held accountable for any legal penalties or actions imposed for non-compliance. Operations on the mainland are not protected by the free zone umbrella.
The Grace Period to Get Compliant
The Resolution states that under this new system, several free zone enterprises might already be operating in the mainland of Dubai without first obtaining formal license. A critical window for compliance is provided since the Resolution came into effect on March 3, 2025, all such establishments have one year to completely align their activities with its guidelines.
What This Means for Your Business
The 2025 Executive Council Resolution No. (11) is ultimately an energetic milestone in Dubai’s commercial journey. It is designed not to lessen the importance of free zones but to thoughtfully expand their role and involve them more seamlessly in the dynamic economy of the entire emirate. Notable benefits for the free zone companies include:
- Improved Market Access, allowing them to easily reach Dubai’s extensive client and consumer base
- Cost Efficiency by avoiding the high expenses and administrative burdens of establishing and managing a separate legal entity on the mainland
- Operational Flexibility to choose the model (physical branch, free-zone based branch, or temporary permission) that best suits their company’s needs and operational goals
- The capacity to Leverage Workforce by employing their current staff for mainland operations under existing free zone privileges
- Transparency of Regulation, replacing ambiguity with a clearly defined legal pathway.
