Free Zone Mainland Operating Permit in Dubai

A practical guide for free zone companies expanding onshore

Dubai has introduced a landmark reform that reshapes how free zone companies access the mainland market. Implemented in 2025 under Executive Council Resolution No. (11) of 2025, the Free Zone Mainland Operating Permit allows eligible Dubai free zone companies to operate legally onshore without setting up a separate mainland entity or appointing a local sponsor.

For international founders and established businesses alike, this marks a structural shift. The historic separation between free zone and mainland jurisdictions has evolved into a more connected commercial environment, within each emirate’s boundaries.

What the permit allows

The permit authorises Dubai licensed free zone companies to sell goods and deliver services directly in the mainland market while retaining full foreign ownership and applicable free zone tax advantages. The permit is valid for six months and renewable at a government fee of AED 5,000.

This framework currently applies only in Dubai. Other emirates operate their own dual licence or branch systems under separate regulations. A permit issued in one emirate does not grant operating rights in another.

Dubai as the launchpad for unified licensing

Under Executive Council Resolution No. (11) of 2025, the system is implemented by the Dubai Department of Economy and Tourism in coordination with the Dubai Business Registration and Licensing Corporation. Applications are processed digitally through the Invest in Dubai platform.

Eligible free zones include DMCC, JAFZA, DAFZA, Dubai Silicon Oasis, Dubai South, TECOM Group free zones and Meydan. Financial free zones such as the Dubai International Financial Centre are excluded.

The permit currently applies to non regulated activities including technology services, consultancy, design, marketing, general trading and e commerce. According to DET estimates, more than 10,000 Dubai free zone companies can now access the mainland market under this model.

How other emirates handle free zone to mainland access

The UAE does not operate a federal permit. Each emirate applies its own framework, valid only within that jurisdiction.

Abu Dhabi offers a dual licence system issued by the Abu Dhabi Department of Economic Development through the TAMM platform. Free zone companies in ADGM, Masdar City, twofour54 and KIZAD can operate onshore under a one year branch style licence.

Sharjah applies a combined licence model. Through arrangements between Sharjah free zones and the Sharjah Economic Development Department, one entity can operate across both jurisdictions.

Ras Al Khaimah enables dual licensing via RAKEZ in coordination with the RAK Department of Economic Development. Free zone companies may open a mainland branch without leasing additional premises.

Ajman, Fujairah and Umm Al Quwain allow free zone companies to register mainland branches with their respective economic departments, usually following the issuance of a free zone No Objection Certificate.

Choosing the right structure

The best option depends on the duration, scale and regulatory nature of your mainland activity.

A six month mainland operating permit suits companies testing demand, executing short projects or entering the market quickly. A mainland branch licence is better for established operations, government tenders or teams requiring MOHRE registration. A full mainland LLC remains the appropriate structure for permanent, large scale operations with a broad activity scope.

At NUR Advisors Group, we often recommend starting lean. A permit allows validation of the mainland market with minimal cost and setup time, followed by a structured upgrade once revenue and operational needs justify it.

Activities currently permitted

Phase one covers non regulated activities such as information technology, digital services, management consultancy, marketing, e commerce, logistics and general trading.

Regulated sectors including finance, healthcare, education, real estate and energy are expected to follow once relevant regulators are integrated into the system.

Service based businesses may operate from their free zone office. Activities requiring public access, such as retail or clinics, must register a physical mainland location.

Costs and first year budgeting

In Dubai, the government fee is AED 5,000 for six months, with renewal at the same rate. There are no additional DET fees for renewal.

When budgeting for the first year, most small and medium sized businesses should expect total costs under AED 15,000, including licensing, accounting setup, VAT compliance, chamber registration and document attestations.

Documentation and processing time

Applications require a valid free zone licence, constitutional documents, shareholder and manager identification, and a free zone No Objection Certificate. Certain activities may require external approvals or Arabic translations.

Processing time in Dubai and Abu Dhabi typically ranges from three to five working days. In many cases, permits are issued electronically within seventy two hours.

Corporate tax and VAT treatment

Mainland sourced profits are subject to corporate tax at nine percent. Qualifying free zone income and export income may continue to benefit from zero percent treatment if accounting segregation is properly maintained.

VAT registration is mandatory when total UAE taxable supplies exceed AED 375,000 over a twelve month period, regardless of whether revenue is generated in the free zone or mainland.

Maintaining separate ledgers for free zone and mainland activities is essential. Records must be audit ready for inspection by DET or the Federal Tax Authority.

Using free zone visas onshore

Employees sponsored under free zone visas may perform mainland work under the permit, provided the activity is licensed and documentation is available on site. To hire staff directly under MOHRE or establish a mainland labour file, a branch licence is required.

Staying compliant

Compliance hinges on operating strictly within licensed activities, renewing permits on time, respecting emirate boundaries and issuing contracts and invoices under the correct legal trade name. Tax filings must be accurate and timely.

Dubai has introduced a grace period until March 2026 for free zone companies already operating onshore without authorisation. During this window, businesses can regularise their position without penalties.

Why this reform matters

The Free Zone Mainland Operating Permit is more than an administrative update. It signals a strategic shift toward integration, flexibility and investor friendliness within the UAE business environment.

By reducing duplication, preserving ownership rights and lowering the cost of market entry, Dubai has effectively removed one of the most significant barriers faced by free zone companies.

For entrepreneurs and international investors, the question is no longer whether mainland access is possible. It is how quickly and strategically it can be achieved.

NUR Advisors Group supports clients at every stage. From eligibility assessment and NOC coordination to permit filing and tax structuring, we ensure your mainland expansion is compliant, efficient and aligned with your growth objectives. clientecare@nur.ae