Dubai: New resolution now allows free zone businesses to expand into mainland

Dubai's recent regulatory changes have significantly altered the landscape for free zone companies aiming to operate on the mainland. Here's an in-depth look at these developments:

Historical Context

Traditionally, companies registered in Dubai's free zones were restricted to operating within their designated zones. Engaging in business activities on the mainland required either setting up a separate entity or partnering with a mainland distributor or agent. This process involved additional costs and complexities, making mainland expansion difficult for many businesses.

Key Developments

1. New Permit System
   Dubai authorities have introduced a system that allows free zone companies to establish branches on the mainland without the need for a local sponsor or separate entity. This major change simplifies expansion and removes previous regulatory barriers.

2. Flexibility in Operations
   Free zone businesses can now engage directly with mainland customers, access a larger market, and operate more efficiently without having to restructure their ownership or business model.

3. Cost Reduction & Market Growth
   By eliminating the need for local sponsorships and additional entity setups, businesses can now save significantly on costs. This change is expected to boost foreign investment and enhance Dubai’s economic competitiveness.

4. Regulatory Compliance
   While free zone companies can now operate in the mainland, they still need to comply with relevant licensing and operational regulations. Specific business activities may require additional approvals depending on the nature of the business.

What This Means for Businesses

✅ Easier Expansion – Free zone companies can now serve both local and international clients more effectively.
✅ Lower Costs – No need for a separate mainland entity or local sponsor.
✅ Increased Market Access – Businesses can now tap into Dubai’s growing consumer and corporate base.
✅ Enhanced Investment Opportunities – Encourages more global firms to establish and expand operations in Dubai.

This move reinforces Dubai’s position as a global business hub, providing companies with more freedom, flexibility, and opportunities for growth.

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