In a landmark development, companies in the Free Zone can now operate in Mainland Dubai after obtaining the relevant permits and licenses from the Department of Economy & Tourism (“DET”).
New Regulation: Dubai Executive Council Decision No. 11/2025
His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, has issued Dubai Executive Council Decision No. 11/2025 On the Regulation of Free Zone Establishments Practicing their Activities within the Emirate of Dubai (“the Decision”), which regulates the operations of free zone establishments in Dubai, allowing them to expand beyond the designated free zones.
This Decision permits companies or establishments that are licensed and registered in any free zone in Dubai to operate outside the free zone after obtaining the necessary permit or license from the DET. This initiative will make it easier for free zone companies to expand their businesses into mainland Dubai.
Types of Permits and Licenses Issued by the DET
The DET can permit a free zone company or establishment to practice its activities outside the free zone and within the Emirate by:
- Issuing a license to establish a branch of the Free Zone Company in Mainland Dubai.
- Issuing a license to establish a branch of the Free Zone Company with its headquarters within the free zone. The fee for this would be AED 10,000.
- Issuing a permit for the Free Zone Company to practice some activities within the Emirate (temporary permit). The fee for this would be AED 5,000.
Key Requirements for Free Zone Companies
The free zone company or establishment proposing to carry out any of the above should ensure that:
License Validity and Relevant Approvals
- Its license is valid and it shall pay all the relevant fees prescribed by the DET.
- Obtain the prior approvals from the DET or other licensing authority(ies) by submitting the necessary forms, documents, and copies of the Free Zone Company’s license, Articles of Association, and copies of the passport and EID of the manager.
- Obtain relevant approvals from other government authorities concerned with supervising the business activity of the branch that is proposed to be established.
Operational Conditions
- Open a headquarters for the branch of the establishment within the Emirate.
- Maintain separate financial records for the business carried out in mainland Dubai.
- Complying with any other conditions or requirements specified by the Director General, by a decision issued by him in this regard
It is important to note that the branch of a free zone company or establishment licensed according to the provisions of this Decision does not enjoy a separate legal personality and will not be considered independent of the parent entity.
List of Economic Activities
The DET shall within a period of six months from the date of this Decision issue a list of economic activities that the free zone company or establishment may practice in the mainland, depending on whether it practices these activities under a license to establish a branch within the Emirate or a license to establish a branch with its headquarters in the free zone or a permit to practice some activities.
Another noteworthy aspect of this Decision is that companies can use their existing free zone workforce for operations in mainland Dubai and continue benefitting from the free zone employment benefits.
Grace Period for Existing Businesses
All existing businesses currently practicing their activities outside the free zone and within the Emirate at the time of implementation of this Decision are given a grace period of one year to comply with the provisions of this Decision.
Being one of the top law firms in Dubai, James Berry & Associates has qualified and experienced lawyers in Dubai who can assist you with your company incorporation requirements.
To know more contact Deepa – deepa@jamesberrylaw.ae
This is a general guide on the subject matter and should not be construed as specific legal advice.
Senior Legal Consultant, Corporate & Commercial