Dubai Free Zone Businesses Now Allowed to Expand into Mainland Under New Resolution

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, issued the resolution in his capacity as Chairman of The Executive Council of Dubai. The new regulation permits free zone businesses—except financial institutions licensed under the Dubai International Financial Centre (DIFC)—to operate outside their designated zones, provided they obtain necessary approvals from the Dubai Department of Economy and Tourism (DET).

Aligning with the Dubai Economic Agenda (D33)

This decision is part of Dubai’s Economic Agenda (D33), which aims to double the city’s economy by 2033 and solidify its status as one of the world’s top three economic hubs. By eliminating barriers between free zones and the mainland, Dubai is reinforcing its commitment to fostering a business-friendly environment that encourages innovation, investment, and expansion.

Key Benefits for Businesses

The resolution brings several advantages for businesses operating in Dubai’s free zones:

• Access to Mainland Markets: Free zone companies can now expand their customer base by entering Dubai’s mainland economy.
• Flexible Licensing Options: Businesses can either apply for a DET-issued license to open a branch in mainland Dubai or obtain a permit for specific activities. Licenses will be valid for one year and renewable.
• Boost to Innovation and Job Creation: Allowing businesses to operate seamlessly across Dubai’s economic landscape is expected to drive entrepreneurial growth and employment opportunities.
• Regulatory Compliance: Companies will need to maintain separate financial records for their free zone and mainland operations while complying with federal and local laws.

Implementation and Compliance Timeline

The Dubai Department of Economy and Tourism (DET) will:

• Publish a list of permitted economic activities within six months in coordination with licensing authorities.
• Require existing businesses already operating outside free zones to comply with the new regulations within one year.
• Allow a one-year extension for compliance upon approval by DET.

Enhancing Dubai’s Business-Friendly Environment

The new resolution reflects Dubai’s ongoing commitment to business-friendly policies, making it easier for companies to expand, invest, and thrive. With fewer restrictions and streamlined licensing procedures, this move is expected to attract more investors, enhance economic diversification, and drive long-term growth.