Free zones in Dubai, or any other emirates in the UAE, offer a lucrative environment. However, the restrictions on Mainland access often dishearten the companies. The announcement of Executive Council Resolution No. (11) of 2025 empowers free zone trading in the mainland.
But what does this mean for you? How can you legally sell in UAE Mainland as a free zone company? Read this blog to know three ways to do so and how you can choose the right strategy for your business.
The Difference Between Mainland And Free Zone In The UAE
Let’s start by understanding these two business environments first.
A Mainland company can operate freely in any emirate of the UAE and internationally. They are licensed by the Department of Economic Development (DED) or equivalent emirate authority. They have to pay the taxes and can bid for the government tenders.
A free company operates in a specialized economic zone within designated areas. These companies can only do business within the economic zone (free zone) or internationally. They are licensed by an independent regulatory body of the free zone. They get 100% ownership and 0% corporate tax up to a limit.
Until March 2025, free zone companies were restricted from trading in the Mainland. However, to support the D33 mission to double the economy’s size by 2033, free zone trading in the mainland has become legal.
How To Sell In The UAE Mainland From A Free Zone Legally?
In the circular of Executive Council Resolution No. (11) of 2025, there are three ways to legally sell in UAE Mainland as a free zone company.
Open A Physical Branch In The Mainland
The first and most recommended option is starting a wholly owned physical brand in the Mainland. This licensed company is the extension of the parent company in the free zone. They have the same structure, but need to be registered with the Department of Economic Development (DED) in the relevant emirate. As per the announcement made in 2025, a free zone company with a mainland branch in Dubai have to pay fees of AED 10,000 to get the license.
This licensed branch must create a separate bank account to manage its expenses for taxation purposes. Additionally, you need to rent an office and get a Ejari registered lease.
Using this branch, you can market your products and interact with clients in the office. Furthermore, you can also bid for government tenders since you are a business operating in the Mainland.
Licence To Operate In Mainland From Within Free Zone
If you don’t want to establish a physical office, you can partner with a mainland distributor in the UAE. If your free zone authority permits, you can create a formal agreement with a distributor or commercial agent who purchases or represents your goods/services and sells them within the mainland.
You can also get a dual licence that allows you to stay in the free zone and do business in the mainland. If you have a service-based company with less direct contact with the customer, this model works best for you.
Get A Temporary Permit For Business Activities
When the free zone company needs to do a specific task for a short term, they need to get a specialized permit. The permit allows them to legally perform defined activities within the mainland for a set period.
The temporary Mainland work permit for the free zone is valid for six months only. The DED or other relevant authority will charge you AED 5000 to issue the permit. This permit is useful for the IT & engineering companies, consultants, and contractors who need to provide services or attend an exhibition or event.
Temporary permits are the most cost-effective option for free zone businesses with occasional, project-based mainland requirements. If you frequently get this permit, switching to a permanent business establishment is a better option.
How To Choose The Best Strategy To Sell In The UAE Mainland As A Free Zone Company?
The legal structure for free zone companies is strict and might get you penalized if you break it. Therefore, if you want your business to grow smoothly, you need to choose the license or permit carefully. Here are the three most critical factors to evaluate before making your decision:
Your Business Activities
The nature of your business and customer interaction plays a decisive role.
If your business is service-based (IT consultancies, marketing agencies, or engineering), where you don’t need to be physically present on the Mainland, you can opt for a specialized permit or mainland distributor in the UAE. However, if client interactions and site visits are necessary, establishing a physical branch is a better option.
Businesses with physical products involved mostly need a license to establish an office or work with local distributors. Moving physical goods across the free zone–mainland boundary requires customs clearance regardless of business structure, so having a mainland entity with the right import/trading licence makes operations easier.
Demand In The Mainland
You must conduct a thorough assessment to get demand estimates. You can start with temporary permits to conduct the research and then make the final decision. If the demand and sales keep growing, you can establish a physical office.
Budget Consideration
Getting permits or establishing a company is costly for a business. The permits and licenses have a price attached to them that the company must pay.
Establishing a physical brand is the most costly because of the license and rental expenses. Additionally, they may need to buy furniture and hire more team members for smooth operations.
You should consider all these factors before choosing a way to sell in the UAE Mainland as a free zone company. Still not sure? We can help you!
365 Day PRO Service can help you find the best structure for free zone trading in the mainland. For 15+ years, we have helped many companies set up their business and get visas for the UAE. Check our website or contact us to know more.
Conclusion
With the announcement of the Executive Council Resolution No. (11) of 2025, you can sell in UAE Mainland as a free zone company. Under this resolution, you can start selling in the mainland by establishing a physical branch controlled by the parent company, partnering with a mainland distributor in the UAE, or getting a temporary license for 6 months. You must consider your business activity, budget, and market demand before making the final decision. 365 Day PRO Services can help you with each strategy to ensure that you don’t break any laws and get penalized. Contact us to know more.
FAQ
Can a freezone company sell in the Mainland in the UAE?
Yes, businesses in free zones can sell in the Mainland if they get the right licenses or permits from DED or other relevant authorities. You can also work with a local distributor or commercial agent to promote your brand and make it more well-known in the market. When all the steps are followed, each route is legal and approved by the government. Get in touch with us for expert help.
Do free zone companies pay taxes?
The UAE introduced a 9% Corporate Tax applicable to businesses with annual net profits exceeding AED 375,000. Free zone companies can still benefit from a 0% qualifying income rate when operating in the free zone. However, if they conduct free zone trading in the mainland, the income generated from this trade is subject to tax based on the mainland law.
How to start a Free Zone company with a mainland branch in Dubai?
Two major tasks to start selling in the mainland as a free zone company are getting permits from the free zone authority and the mainland authority. You need to submit the free zone company’s documents, a board resolution authorizing the branch, a completed application form, and a valid office lease (Ejari). Once the documents are processed and verified, you’ll receive the desired license or permit. 365 Days PRO Services can handle this entire process so you can focus on your business.
Can a free zone company in Dubai bid for government tenders?
Once the free zone company establishes a mainland branch with a DED licence, that branch can bid for government contracts, register on government procurement portals, and fulfil public sector work.