capabilities of free zone companies. Executive Council Resolution No. (11) of 2025, issued by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, has effectively bridged the gap between free zone and mainland operations, ushering in a new era of business flexibility and growth. This development is poised to reshape the business landscape of Dubai, offering unprecedented opportunities for companies operating within its numerous free zones.
Understanding the Previous
Landscape:
Historically, free zone
companies in Dubai operated under a distinct set of regulations, enjoying
benefits like 100% foreign ownership and tax exemptions. However, they were
largely restricted to conducting business within their designated free zone
boundaries. Mainland operations required a separate entity and licensing, often
leading to complexities and increased operational costs.
The Revolutionary Resolution:
What It Entails:
The new resolution dismantles
these barriers, allowing free zone companies to:
- Operate Directly on Mainland Dubai:
By obtaining the necessary licenses and permits from the Dubai Department
of Economy and Tourism (DET), free zone entities can now extend their
commercial activities to the mainland.
- Establish Mainland Branches:
The DET is authorized to issue licenses for free zone companies to
establish branches on the mainland, providing a structured pathway for
expansion. These licenses are subject to annual renewal.
- Maintain Separate Financial Records:
To ensure transparency and compliance, companies operating on the mainland
are required to maintain distinct financial records for their mainland
operations.
- Comply with Federal and Local Regulations:
Companies must adhere to all relevant federal and local laws and
regulations, ensuring a level playing field for all businesses in Dubai.
- Allowed Economic Activities:
The DET will, within 6 months of the resolution, issue a list of economic
activities that are allowed on the mainland for free zone companies. This
list will provide a clear framework for businesses to plan their
expansion.
- Compliance time: Businesses
that were operating outside of freezones when the resolution began have a
one year period to comply with the new rules, with the possibility of an
extra year extension.
The Impact and Benefits:
This resolution is expected to
have a profound impact on Dubai's business environment:
- Enhanced Business Flexibility:
Companies can now seamlessly integrate their free zone and mainland
operations, streamlining processes and reducing operational complexities.
- Increased Market Access:
Free zone companies gain access to a wider customer base on the mainland,
fostering growth and expansion.
- Boost to Dubai's Economy:
This move aligns with the Dubai Economic Agenda, D33, aiming to drive
economic growth and attract further investment.
- Enhanced Competitiveness:
Dubai strengthens its position as a leading global business hub by
offering a more attractive and flexible business environment.
- Attraction of Foreign Investment:
Simplifying mainland operations for free zone companies is likely to
attract more foreign investment into Dubai.
Who Benefits Most?
This resolution benefits a
wide range of businesses, including:
- E-commerce companies seeking to expand
their reach to mainland customers.
- Service providers looking to establish a
physical presence on the mainland.
- Trading companies aiming to distribute
goods across Dubai.
- Consulting firms seeking to provide
on-site services to mainland clients.
What Businesses Need to Do:
To capitalize on this
opportunity, free zone companies should:
- Contact the Dubai Department of Economy
and Tourism (DET) to understand the licensing requirements.
- Ensure compliance with all relevant
federal and local regulations.
- Establish separate financial records for
mainland operations.
- Monitor the DET's announcement of allowed
economic activities.
Conclusion:
Dubai's new resolution marks a
significant step forward in creating a more integrated and business-friendly
environment. By bridging the gap between free zone and mainland operations,
Dubai is paving the way for unprecedented growth and innovation. This move is a
testament to Dubai's commitment to fostering a dynamic and competitive business
landscape, solidifying its position as a global hub for commerce and
investment. Don't miss out on the opportunity to leverage this change for your
business. Contact the Dubai Department of Economy and Tourism (DET) directly or
connect with business setup specialists to begin planning your expansion into
mainland Dubai. Stay tuned for updates on the list of allowed economic
activities—we'll be updating this article as soon as the DET releases it. This
is a crucial update for #DubaiBusiness, #DubaiFreeZone, and those seeking
#MainlandDubai opportunities. #InvestInDubai #DubaiD33
