Free Zone Companies Can Now
Operate on the Mainland with DED Approval
In a landmark move for entrepreneurs and investors, Dubai has introduced a regulation that officially allows free zone companies to operate on the mainland—provided they obtain prior approval from the Department of Economy and Tourism (DED). This bold shift signals a significant step toward greater business flexibility and aligns perfectly with the emirate’s ambitious D33 economic agenda.
What This Means for Free Zone Businesses
Until now, operating outside a Free Zone required businesses to either form a separate mainland entity or partner with a local sponsor. The new regulation changes that. Free zone companies can now legally operate across Dubai’s mainland, offering greater reach, customer access, and operational efficiency.
However, several key conditions apply:
DED approval is mandatory before initiating any mainland activity
Full compliance with all mainland laws and regulations is required
Separate accounting records must be maintained for free zone and mainland operations
A comprehensive list of permitted business activities will be released within six months, starting March 2025
This change opens the door to massive opportunity, but only for those who play by the rules.
Key Requirements for Free Zone Companies Operating in Mainland Dubai
To legally operate under this new framework, according to Dubai Executive Council Decision No. 11 of 2025, Free Zone companies must meet the following conditions:
Obtain pre-approval from DED, valid for 6 months
Apply for a full Mainland license or establish a Mainland branch, if operations continue beyond 6 months
Comply fully with all Mainland commercial regulations
Maintain separate accounting records for Free Zone and Mainland operations
Operate only within the scope of approved business activities, with a detailed list to be published within six months
This new approach, issued on 3 March 2025, enables seamless expansion for businesses while maintaining legal and financial transparency.
A 12-Month Compliance Window for Existing Mainland Activity
Companies that have already been active on the mainland without proper authorization now have a 12-month window to align with the new regulations. In some cases, extensions may be granted, but proactive compliance is highly recommended to avoid penalties or disruptions.
DIFC-Based Financial Firms Remain Unaffected
It’s important to note that this regulation does not impact financial institutions based in the DIFC (Dubai International Financial Centre). These firms will continue to operate under the existing legal and regulatory frameworks established specifically for Dubai’s premier financial hub.
A Strategic Move Under the D33 Economic Agenda
This regulatory update is part of the D33 strategy—Dubai’s plan to double the size of its economy within the next decade and cement its position among the top three global economic cities. By removing key barriers and encouraging broader market access, Dubai is sending a strong message:
The city is more open for business than ever before.
Is Your Free Zone Business Ready to operate in the Mainland?
If you’re operating in a free zone and considering a move into the mainland, now is the time to review your structure, assess compliance requirements, and consult with a trusted advisor.
At JetUp Tax & Business Consulting, we help businesses navigate this transition smoothly—ensuring legal compliance, accounting separation, and strategic alignment with Dubai’s evolving regulatory landscape.
Contact us today to schedule a consultation and take the first step toward expansion.
At JetUp, we specialize in UAE Corporate Tax compliance. Whether you’re setting up a Free Zone or Mainland Company, A Free Zone or Mainland Branch, a foreign permanent Establishment or managing a multi-tier structure, our experts provide end-to-end advisory and compliance services.
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