Dubai Eases Path for Free Zone Firms to Operate Mainland

Under the new resolution, companies licensed by free zone authorities can now operate beyond their designated zones, provided they secure the necessary licenses or permits from the Dubai Department of Economy and Tourism . This development excludes financial institutions licensed within the Dubai International Financial Centre . The initiative is designed to enhance Dubai’s business ecosystem by facilitating the seamless expansion of free zone businesses into the mainland, thereby boosting the city’s competitiveness and appeal to both local and international investors.

The DET is vested with the authority to issue licenses permitting free zone establishments to either establish branches within Dubai or operate directly from their free zone headquarters. These licenses are valid for one year and are subject to renewal. Additionally, permits for specific activities within the emirate can be obtained. Within six months, the DET, in collaboration with relevant licensing authorities, is expected to release a list of economic activities eligible under these new provisions.

Compliance with both federal and local regulations is mandatory for establishments operating outside their respective free zones. They are required to maintain separate financial records for activities conducted within and outside the free zones. Furthermore, companies aiming to operate beyond Dubai’s borders must obtain appropriate licenses from the pertinent authorities in those regions.

Inspections to ensure adherence to applicable laws will be conducted as per federal and local guidelines, supplemented by procedures agreed upon between the DET and the respective licensing authorities. Establishments currently operating outside free zones have a one-year window from the resolution’s effective date to comply with its provisions, with the possibility of a one-year extension at the discretion of the DET’s Director General.