Dubai Unlocks New Business Frontier: Free Zone Companies Can Now Operate in the Mainland

In a bold move to fuel economic growth and foster business integration, Dubai has introduced a landmark regulation on March 2025 that allows free zone companies to expand their operations into the mainland. This decision marks a significant shift in the emirate’s business landscape, offering unprecedented flexibility to companies looking to scale beyond the confines of their free zones.

Announced by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai and Chairman of the Executive Council, the resolution is part of the city’s wider strategy to accelerate innovation, investment, and economic diversification under the ambitious D33 economic agenda.

What’s New: Free Zones Can Now Reach the Mainland

Under the new rule, any business licensed by a Dubai free zone authority can now expand its operations across Dubai, provided it obtains the necessary approvals from the Dubai Department of Economy and Tourism (DET).

This move opens the door to a more connected and dynamic business ecosystem, bridging the gap between the previously segmented free zone and mainland jurisdictions.

Key Highlights of the Regulation

  • Free zone firms can now legally operate in mainland Dubai by securing a DET-issued license.
  • DIFC-licensed financial institutions are excluded from this regulation.
  • Businesses must maintain separate financial records for mainland and free zone operations to ensure compliance.
  • Companies looking to expand beyond Dubai’s borders must get additional approvals from relevant federal and local authorities.
  • DET will issue renewable one-year licenses to free zone companies for opening branches or conducting specific activities in the mainland.

Aligning with Dubai’s D33 Vision

This regulation directly supports Dubai’s D33 economic agenda, a transformative vision aimed at:

  • Doubling Dubai’s economy to AED 32 trillion by 2033
  • Positioning Dubai among the top 3 global economic cities
  • Nurturing 30 unicorn companies (start-ups valued at $1B+)
  • Strengthening Dubai’s role in the global digital economy
  • Advancing sustainability and economic diversification

With the removal of major barriers between free zone and mainland operations, businesses will find it easier to scale, collaborate, and contribute to Dubai’s future-ready economy.

Economic Resilience and FDI Milestones

Dubai’s regulatory flexibility comes on the heels of impressive economic resilience:

  • 3.1% GDP growth in the first nine months of 2023
  • Strong contributions from the wholesale, retail, transport, and financial sectors
  • Record-breaking foreign direct investment (FDI) with 1,117 greenfield projects valued at AED 52.3 billion
  • 33.2% year-on-year increase in FDI—the highest in Dubai’s history

These figures signal strong investor confidence and affirm Dubai’s standing as a global hub for innovation, entrepreneurship, and sustainable growth.

What This Means for Your Business

For entrepreneurs, SMEs, and international investors, this regulation is a game-changer. It significantly reduces the operational friction between Dubai’s free zones and mainland market, allowing companies to:

  • Access a broader customer base
  • Collaborate with mainland partners
  • Bid for local government contracts
  • Hire talent from across the emirate
  • Optimize logistics and supply chains

With a simplified licensing pathway through DET, free zone companies can now test, validate, and grow their presence in the broader Dubai economy, without having to set up entirely new legal entities.

The Road Ahead: What to Expect Next

DET, along with other authorities, releases further guidelines and an official list of approved economic activities. These will help businesses navigate their expansions with clarity and confidence, ensuring full compliance with federal and local laws.

In the meantime, companies planning to expand into the mainland should start:

  • Reviewing their operational structure
  • Consulting with business setup specialists
  • Preparing financial systems to maintain dual records
  • Identifying applicable DET activity codes

Final Thoughts: A Bold Step Toward a Unified Business Ecosystem

Dubai’s decision to allow free zone companies to operate in the mainland is more than a policy change; it’s a strategic leap toward building an inclusive, future-ready economy. As part of the D33 vision, it aligns with Dubai’s ongoing efforts to enhance ease of doing business, attract global investment, and promote sustainable growth. For entrepreneurs, investors, and established free zone companies, the message is clear: now is the time to explore new horizons and unlock the full potential of Dubai’s vibrant business landscape. If you want to read further, refer to the Executive Council Resolution No. (11) of 2025 by the Dubai government.

Thinking of Expanding Your Business in Dubai?

We’re here to help. At Gulf Central, our expert consultants provide end-to-end support for business expansion, licensing, and compliance across all Dubai jurisdictions. Whether you’re a free zone startup or an international firm, we’ll guide you every step of the way. If you are confused about the right choice for your business, refer to our guide, Free Zone vs Mainland in the UAE: Which is Right for Your Business?

👉 Contact us today to learn how you can seamlessly extend your operations to Dubai’s mainland under the new regulation.

Leave a Comment

Your email address will not be published. Required fields are marked *