A groundbreaking move to stimulate investment, allowing free zone establishments to open branches in mainland Dubai with annual renewals and specialized permits.
In a significant step to further stimulate investment and enhance the business landscape, Dubai has introduced a new resolution allowing establishments based in free zones to expand into mainland Dubai. This move, part of Executive Council Resolution No. (11) of 2025, aims to create new growth opportunities for businesses operating within Dubai’s free zones by giving them the flexibility to open branches across the emirate.
Issued by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, and Deputy Prime Minister and Minister of Defence of the UAE, this resolution is expected to have a profound impact on Dubai’s business ecosystem. The new policy allows free zone businesses to acquire a licence from the Department of Economy and Tourism (DET) to operate in mainland Dubai, potentially opening new doors for diversification and market penetration.
Key Highlights of the Resolution:
- Business Expansion: Free zone establishments are now allowed to expand their operations by opening branches in mainland Dubai. This expansion can occur under a new licensing framework that requires establishments to renew their licences annually.
- Specific Activity Permits: The resolution also allows businesses to seek permits for specific activities outside the free zone and within the broader emirate of Dubai, further broadening the scope for growth.
- Financial Records & Compliance: To ensure transparency, businesses will need to maintain separate financial records for their operations outside the free zone. They will also be subject to relevant federal and local laws and regulations, with inspections carried out by the relevant authorities.
- Special Conditions for Financial Institutions: The new resolution does not apply to financial institutions licensed under the Dubai International Financial Centre (DIFC), which operates under a separate regulatory framework.
- Detailed Procedures for Branch Licensing: The resolution outlines a clear and structured procedure for licensing branches both within Dubai and in other free zones. It also specifies the process for issuing activity permits and conditions related to workforce employment.
- Economic Activity List: Within six months of the resolution’s effective date, the DET, in coordination with licensing authorities, will issue a list of economic activities that businesses can engage in across Dubai. This will be contingent on whether the business holds a branch licence in the emirate, a branch with headquarters in the free zone, or a specific activity permit.
- Transition Period: Establishments operating outside free zones will be required to comply with the provisions of the resolution within one year of its effective date. However, this period may be extended by the Director General of the DET for an additional year if necessary.
What This Means for Dubai’s Business Landscape
This new resolution positions Dubai as an even more attractive destination for global businesses, providing an opportunity for established free zone companies to further expand and diversify their operations within the mainland. The ability to set up a branch within the city’s thriving commercial and residential areas offers businesses increased exposure to a broader customer base, while maintaining the operational flexibility that free zones are known for.
Dubai’s free zones have long been a magnet for international companies, offering them tax incentives and a streamlined setup process. Now, by allowing these businesses to operate in mainland Dubai, the resolution not only broadens market access but also fosters greater collaboration between businesses based in both free zones and the mainland.
By easing restrictions and simplifying the licensing process, Dubai has taken another step towards reinforcing its reputation as a global business hub. This development is expected to attract both foreign direct investment (FDI) and regional businesses looking to expand their reach, making Dubai a strategic base for innovation and enterprise.
Conclusion
Dubai’s new resolution is a forward-thinking policy aimed at supporting business growth and enhancing the city’s competitiveness on the global stage. By enabling free zone businesses to establish a foothold in mainland Dubai, the emirate is providing companies with new opportunities to grow and adapt to an ever-evolving market. As the regulatory framework continues to evolve, Dubai remains at the forefront of facilitating business expansion and innovation.
