The Executive Council of Dubai has adopted Resolution No. 11, which lifts the restrictions on mainland business operations for companies registered in free economic zones.
What is required to enter the UAE mainland market?
Companies licensed in Dubai’s Free Zones can now conduct business outside their designated areas, provided they obtain the appropriate licenses or permits from the Dubai Department of Economy and Tourism (DET).
What types of permits can Free Zone companies obtain?
DET may issue the following types of permits to such companies:
• A license to open a branch in the mainland of Dubai.
• A license for a branch with the head office in a Free Zone (valid for 1 year).
• A temporary permit for specific activities in the mainland (valid for up to 6 months).
Responsibilities of Free Zone companies operating in the UAE mainland:
• Comply with all applicable federal and local laws.
• Maintain separate accounting for operations outside the Free Zone.
• If planning to operate outside the Emirate of Dubai, obtain the relevant licenses and approvals from competent authorities in the respective jurisdictions.
Taxation
Income generated from mainland activities is subject to a 9% corporate tax under UAE law. Income earned within the Free Zone may remain tax-exempt if specific conditions are met.
Deadlines and Transition Period
Companies already operating outside their Free Zones as of the resolution’s effective date (March 17, 2025) must comply with the new requirements within one year. This period may be extended by another year at the discretion of the Director General of DET.
