You might have setup a free zone company in the UAE, but now want to expand in Dubai? You might have hundreds of questions on what to do or not do if you want to operate in the mainland as a free zone company.
But the burning question is, can a Free Zone Company operate in Mainland Dubai?
A short answer to this question is yes; you can operate and sell in Dubai, but with a few restrictions. In 2025, Executive Council Resolution No. (11) of 2025 was announced regarding the regulation of free zone business activities in the Dubai Mainland. This has brought new hope for the free zone businesses, overcoming the challenges of traditional regulations and securing clients in the UAE.
In this blog, you’ll find all the necessary information regarding the free zone – mainland trade rules to start your operations in Dubai. By the end of this blog, you’ll get a checklist to make your transition process better. If you need expert guidance, feel free to contact
Difference Between How Free Zone And Mainland Operate
Before jumping into the details, let’s take a step back to understand how these two business structures operate.
Free trade zone in Dubai
Free zones are specialized economic zones regulated by individual free zone authorities. This free zone provides you with the necessary infrastructure to kick-start your business. While free zone companies are subject to 0% corporate tax, their reach is limited within the free zone and the global market.
Mainland trade in Dubai
Mainland companies in Dubai are regulated by the Department of Economy and Tourism (DET) and other relevant authorities. These businesses operate as any other company in Dubai and must comply with the local regulatory framework. Additionally, the mainland company operator can also apply for government contracts.
Read about the differences between the Mainland and the Free Zone Company here.
Highlights Of Executive Council Resolution For Free Zone-Mainland Business
The new executive resolution enables the free zones to enter the Mainland under strict regulation related to their business structure, finances, and more. Here are a few highlights of this resolution:
- The DET will provide licences/permits for a select few business activities that aren’t highly regulated, such as consulting, creative services, logistics, and more.
- The free zone entities need a licence/permit approved by DET.
- A free zone entity might need a mainland agent or partner for specific business activities.
- Maintain separate and transparent financial records for free zone and mainland operations.
- The income from the mainland branch may be subject to the mainland tax structure.
Under this new resolution, the free zones can apply for:
- Licence to start a branch of a company existing in the free zone
- Licence to start a brand of company headquartered in a free zone, but operates on the Mainland
- Permit to conduct specific Activities within the Dubai Mainland
How Can Free Zone Companies Do Business On The Mainland In Dubai?
A free zone company has 4 primary routes to enter the mainland in the Emirate of Dubai, as mentioned below:
Open A Mainland Branch
The most common route is to open a brand of your business in the Mainland. A company needs to register a branch with the DET and follow the mainland trade rules (taxes, physical office, etc.). The free zone company becomes the parent organization.
Get A Dual License
A few free zones allow you to get a dual licence to operate in the free zone as well as the Mainland. You need to find such free zones and secure the necessary permits and licences to trade freely within the Mainland.
Partner With Local Distributor Or Agent
If you don’t want to establish a full company in the Mainland, you can partner with local distributors and agents. You need an agency or distribution agreement to trade legally and more efficiently.
Get A Temporary Work Permit
If you need to do a specific activity for a limited time, you can apply for a limited permit. This lasts for about 6 months, enabling you to carry out operations smoothly.
Checklist For Free Zone Companies To Operate In The Mainland
Here’s a checklist to help you expand your free zone company activities in the Mainland.
Understand The Legal And Financial Rules For Mainland Trade
The mainland business regulations are different from those in the Free Zone. Therefore, you must understand the differences between the regulations, especially regarding the legal framework, taxes, and financial reports.
If you get a licence to open a Mainland branch, it will operate as a Mainland entity with separate reports adhering to the Dubai federal laws.
Get NOC And Approval From The Relevant Authority
You must get a NOC or approval from the free zone to expand into the mainland. Many free zones also allow you to get dual licenses to help your business grow beyond the free zone premises. Register your company with the DET or other relevant regulatory authority to get a licence approved.
Check If You Need A Local Agent Or Distributor For Business
A free zone company might need a local agent or distributor for certain business activities in the Mainland. For example, highly regulated business activities in the finance, healthcare, or other such sectors may need supervision through local partners.
Understand The Mainland Business Regulations
All the mainland licensed businesses must follow the local federal laws. Therefore, thoroughly understand the mainland trade rules that a company operator needs to follow. It includes the regulations regarding business operations, revenue management, taxes, physical office setup, and more.
Create Separate Accounts For Revenue
Your Mainland brand is treated as a separate entity following local regulations. Therefore, you need to create a separate bank account for all the financial transactions related to the Mainland business. This account will play a crucial role in paying the applicable taxes.
How Can 365 Day PRO Services Help You Expand In The Dubai Mainland?
Entering the Dubai Mainland as a free zone company is a complex process. With 365 Day PRO Services, you can sell in the Dubai Mainland without any hassle. We can assist you in getting the necessary licences and expanding your business in the UAE. For 15+ years, we have helped 1000+ clients start their business, get visas, and manage their taxes in the UAE. Whether you want to start a business in the Mainland or the free trade zone in Dubai, contact us now!
Conclusion
Can a free zone company operate in the Mainland? Yes, it can, but with a few restrictions.
Recently, Dubai has announced a new resolution to allow companies from the free trade zone to enter the Mainland with a certain licence or permit. They need to operate as a separate branch of the free zone company or get a short-term permit for specific business activity. These branches must follow the federal law applicable to Mainland companies. Certain business activities need these companies to partner with a local agency or distributor. Contact 365 Day PRO Services to know how you can expand from the free zone to the Dubai Mainland.
FAQ
Does a free zone company need a licence to sell in the Dubai mainland?
Yes, a free zone company needs a license or permit to sell in the Mainland of Dubai. This license makes them a separate legal entity under the parent company that must adhere to the Mainland trade regulations with a separate account for financial management.
What are the Mainland trade rules in Dubai for free zone companies?
A few Mainland trade rules for free zone companies are:
- Freezone companies need to create a separate branch with a Mainland license
- Separate bank accounts to differentiate the income generated by the Mainland branch
- Might need to find a local agent or distributor for highly regulated business activities
- Pay income tax based on Mainland regulations
Do free zone businesses have to pay taxes when trading on the Mainland?
Yes, the Mainland branch of the free zone company needs to pay taxes. The mainland branch will pay all the taxes based on the regulations of the local authority. The 0% corporate taxes in the free zone don’t apply in the Mainland. Contact 365 Day PRO Services to know more about the tax structure of mainland and free zone companies.
What are the benefits of expanding in the Dubai Mainland?
The following are a few benefits of expanding your business in the Dubai Mainland:
- Get access to the larger market in the UAE Emirates
- You can still operate as a free zone to claim its benefits
- Scale your operations and grow your business
- Connect with the locals to build your network
- Attract local and global investors