Dubai has introduced a new resolution that facilitates the expansion of free zone companies beyond their designated zones, enabling them to conduct business within the emirate.
Issued by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Deputy Prime Minister, and Minister of Defence, in his capacity as Chairman of the Executive Council of Dubai, the regulation streamlines the process for free zone companies to extend their reach across Dubai.
Licensing and Compliance Requirements
Under the new resolution, any company or institution licensed by a free zone authority can operate outside its designated free zone, provided it secures the required permits and licenses from the Dubai Department of Economy and Tourism (DET). However, the resolution does not apply to financial institutions regulated under the Dubai International Financial Centre (DIFC).
Businesses must comply with federal and local regulations relevant to their industry. Additionally, they are required to maintain separate financial records for their operations outside the free zone, distinguishing them from their free zone activities. If a company intends to operate outside Dubai, it must obtain the necessary authorizations from the respective authorities.
This initiative is a key step in improving Dubai’s business landscape by allowing free zone companies to seamlessly expand their operations into mainland Dubai. The resolution empowers DET to issue licenses for free zone companies to establish branches within the emirate, with such licenses being valid for one year and renewable. Additionally, DET can grant permits for specific business activities within Dubai.
DET, in collaboration with licensing authorities, has been tasked with publishing a comprehensive list of economic activities that free zone businesses can engage in within six months.
Regulatory Oversight and Economic Impact
Companies licensed under this resolution will be subject to inspections to ensure compliance with the outlined regulations. The resolution also details the procedures for acquiring licenses, activity permits, and the employment regulations governing workforce operations.
This initiative aligns with Dubai’s ambitious D33 economic agenda, which aims to double the emirate’s economy to AED 32 trillion ($8.71 trillion) over the next decade. The agenda also seeks to support 30 private enterprises in reaching unicorn status—valued at over $1 billion—and to position Dubai as a leader in the global digital economy, sustainability, and economic diversification by 2033.
Economic Growth and Foreign Investment
Dubai’s economy witnessed a 3.1% growth in the first nine months of the previous year, reaching AED 339.4 billion. This expansion was primarily driven by key sectors such as wholesale and retail trade, transportation, storage, and financial services.
Furthermore, Dubai has maintained its position as the world’s leading destination for greenfield foreign direct investment (FDI) projects for the fourth consecutive year. In the past year alone, the emirate attracted 1,117 greenfield FDI projects worth over AED 52.3 billion, marking a 33.2% increase from 2023. This figure represents the highest FDI value recorded since 2020 and the highest number of projects in Dubai’s history.
A Step Toward Greater Business Flexibility
This new resolution represents a crucial advancement in facilitating business operations within Dubai, simplifying the process of company formation. While free zone businesses have previously been able to establish branches in the mainland, certain restrictions, especially on physical goods trading, have posed challenges.
The next logical progression in Dubai’s regulatory framework would be enabling corporate migration between different jurisdictions within the UAE. Such a move would further enhance operational flexibility and drive economic growth, reinforcing Dubai’s position as a leading global business hub.
Source: https://www.thenationalnews.com/business/2025/03/17/dubai-issues-new-regulation-for-free-zone-companies/