UAE: Dubai allows free zone businesses to expand to mainland

 

Introduction:

The Dubai government has recently allowed the companies in free zones to expand in the mainland Dubai. The decision was taken through Executive Council Resolution No 11 of 2025 and is aimed to increase investment and promote growth in the region. 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.

The free zones will require yearly renewable licenses from the Department of Economy and Tourism (DET) to expand into the free zone.

Key provisions of the resolution:

The businesses which previously were constrained to the free zones they registered in are now allowed to expand into the mainland by simply taking a license from the DET. Establishments expanding to the mainland must renew their brand licenses annually, ensuring continued compliance with regulatory requirements. Companies can apply for permits to conduct specific activities outside their free zone jurisdiction while remaining compliant with Dubai’s economic framework.

The resolution however does not apply to financial institutions licensed under the Dubai International Financial Centre (DIFC) maintaining DIFC’s distinct regulatory framework. Companies operating in both free zones and the mainland must maintain separate financial records for their respective operations to ensure financial clarity and regulatory compliance.

Further, the resolution requires any businesses licensed under this resolution to be subjected to inspection as per Dubai’s federal and local laws. 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.

All free zone entities expanding into Dubai’s mainland must adhere to the resolution’s provisions within one year of its implementation.

Implications for businesses and investors:

The resolution will have a positive impact on businesses operation in the free zone which can also take advantage of the markets of the mainland by serving local customers. The resolution provides clear guidelines on licensing, financial transparency, and compliance, so businesses can operare with greater confidence. The structured approach to expansion ensures that companies align with Dubai’s overall economic vision while maintaining transparency and accountability.

Conclusion:

Dubai’s Executive Council Resolution No. (11) of 2025 is a massive change to the business environment of free zones. This resolution creates a level playing field for free zone companies, allowing them to compete directly with mainland businesses. It enhances Dubai’s attractiveness as a destination for entrepreneurs looking for a business-friendly environment with minimal restrictions.

 

For further information, please contact:

Thomas Paoletti, Managing Partner

Paoletti Legal Consultants, UAE

e: t.paoletti@paoletti.com

t: +971529113255

 

#WLNadvocate #UAE #Dubai #AbuDhabi #business #law #legalnews #finance #economy #corporatelaw #companylaw #freezone #entrepreneur #investor #economichub