Dubai ‘removes walls’ for free zone companies, allows them to operate in mainland

Dubai has announced new rules that will allow companies set up inside its many free zones to operate outside of them in a move that is being hailed as “a gateway to growth”.

Until now, a company in the free zone could operate only within the zone and outside the UAE. It could not conduct its operation in a non-free zone in the UAE.

But a new resolution was recently announced by H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, according to which, “any company or institution licensed by a free zone relevant authority may operate outside the free zone and within Dubai, as long as it obtains the necessary licences or permits from the Dubai Department of Economy and Tourism (DET).”

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A statement by the government said the move “marks a significant advancement in enhancing the business landscape” by allowing free zone businesses to “seamlessly integrate into the mainland.”

It added that the move aligns with the city’s D33 Agenda to create a dynamic business ecosystem and elevate the competitiveness of the city’s business sector.

“This progressive initiative sends a clear message to the global business community that Dubai is a destination for investment, as well as a forward-thinking partner committed to nurturing entrepreneurial ambitions and driving sustainable development,” it said.

What does the resolution say?

Companies must adhere to the federal and local regulations related to their activities and maintain separate financial records for their operations conducted outside the free zone.

If businesses wish to operate outside Dubai, they must secure required licences and permits from relevant authorities in the location where they plan to carry out their activities.

DET is authorized to grant an establishment the permission to operate outside its free zone and within Dubai by issuing a licence for establishing a branch within the emirate or issuing a licence for a branch with its headquarters in the free zone. These licences are valid for one year, after which they can be renewed. Additionally, permits may be issued for specific activities within the emirate.

Provisions of this resolution apply to establishments seeking to operate outside the free zone, with the exception of financial institutions licensed to operate within the Dubai International Financial Centre, which has its own legal and regulatory framework.

What does this mean for businesses?

The move has been met with positive reception. Business lawyer Kamal Jabbar said “Dubai has removed the walls” for free zone companies, who have until now “operated like ships confined to a harbor — thriving within their limits but blocked from fully availing mainland opportunities.”

“Now, Dubai has opened the waters, allowing them to trade directly with mainland clients, and expand seamlessly. This is more than a regulatory update—it’s a gateway to growth,” he told Business Recorder.

“Businesses can now scale faster, reduce costs, and tap into a much larger market.

For global investors, Dubai’s free zones just became even more attractive,“ he added.

Meanwhile Milad Azar, market analyst at online investment platform XTB MENA, said the resolution will create a more cohesive business environment in Dubai, by giving flexibility to companies vying to expand outside the free zones.

Talking to Business Recorder, he said not only could these companies see faster growth, but they can also help solidify the emirate’s standing as a global FDI destination, enhancing its competitiveness on a global scale.

“The increased flexibility could appeal to multinational companies looking to establish headquarters in the region,” he stated.

What are free zones?

“The free zone concept was introduced by the Dubai government to generate foreign interest to set up businesses in the city. Essentially, it’s a special economic area where business owners can enjoy many ownership and taxation benefits,” H.E. Hamad Buamim, Chairman of the Board of Dubai Multi Commodities Centre (DMCC) had told Business Recorder back in 2022.

There are over 30 free zones in Dubai. Generally, each is designed around an industry category ranging from media to jewellery, health care and manufacturing.

For instance, DMCC is suitable for companies in the commodities and service industry, while the Dubai Design District focuses on fashion, furniture and beauty care.

“Dubai’s free zones’ cluster-specific approach groups together similar businesses to create a network of knowledge and expertise in one location, to the advantage of both businesses and users or consumers,” Buamim explained.

Free zones perks include assistance with visas, opening corporate bank accounts, advice and networking opportunities.

Copyright Business Recorder, 2025