Membres

Free Zone Companies Cleared to Operate on Mainland

In a landmark development poised to reshape the regulatory landscape of business in Dubai, H.H. 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, governing the operations of free zone establishments wishing to expand into mainland Dubai.

Announced on 17 March 2025, the resolution marks a pivotal shift in policy by allowing companies licensed in Dubai’s free zones to conduct business beyond their designated zones—provided they secure the appropriate licenses or permits from the Dubai Department of Economy and Tourism (DET). This move forms part of the Dubai Economic Agenda (D33), which targets a doubling of the Emirate’s economy by 2033 and aims to position the city among the world’s top three global economic hubs.

Dubai's free zones have long been a magnet for international businesses, offering a host of benefits including tax exemptions, full foreign ownership, and streamlined customs procedures. However, the geographical limitations have often been a barrier to further growth. Resolution No. 11 of 2025 dismantles that boundary, offering unprecedented operational flexibility.

A New Framework for Expansion

The provisions of this Resolution apply to all free zone establishments seeking to operate outside their designated zones, with the exception of financial institutions licensed within the Dubai International Financial Centre (DIFC). Under the new framework, any entity licensed by a free zone authority may now conduct business outside the free zone and within Dubai, provided it secures the necessary licenses or permits from the DET.

The updated policy is accompanied by important compliance obligations. Establishments operating beyond their free zone boundaries are required to comply with all relevant federal and local laws governing their activities and to maintain distinct financial records for operations conducted outside the free zone.

For activities carried out outside the Emirate of Dubai, businesses must obtain the appropriate licences and approvals from the competent authorities in the respective jurisdiction, in accordance with that jurisdiction’s regulatory framework.

To provide further clarity, DET—working in coordination with the relevant licensing authorities—will issue, within six months, a comprehensive list of economic activities that free zone entities may carry out in mainland Dubai. This proactive measure is intended to give businesses a clear regulatory roadmap and support their strategic planning.

Reinforcing Dubai’s Global Business Appeal

This progressive regulatory shift reflects Dubai’s unwavering commitment to improving its business environment and stimulating economic growth. The new framework is expected to foster greater integration between free zone and mainland ecosystems, unlock new avenues for job creation and innovation, and support the growth of a more diverse, resilient, and future-ready economy.

Dubai continues to evolve as a global business capital—guided by regulatory foresight and an unwavering commitment to opportunity without borders.