The Executive Council of Dubai introduced Decision No. 11 of 2025 on 3rd March, taking a significant step towards modernizing the economic framework of the emirate. As per the new regulations, companies licensed in the free zones in Dubai can legally expand their operations into the mainland.
This is a landmark decision that will further position Dubai as a lucrative business hub at a time when the country has eased FDI restrictions. Now, global investors and businesses can thrive in the evolving marketplace in Dubai. Businesses are seeking professional support from reputed advisors regarding company formation in Mainland to capitalize on the growing opportunities.
However, it is important to note that financial entities licensed in the Dubai International Financial Centre (DIFC) remain outside the scope of this framework. These organizations continue to operate under their own distinct regulations.
Three Key Pathways to Onshore Operations
- Physical onshore branch: This approach involves the establishment of a legally recognized branch in mainland Dubai with a physical presence.
- Free Zone-based onshore operations: Businesses can operate on the mainland while remaining physically based in the free zone. This eliminates the requirement for an onshore office.
- Temporary onshore permit: Organizations may also acquire a temporary onshore permit to operate on the mainland. This permit remains valid for six months, during which the company can conduct specific onshore activities.
However, it’s essential for organizations to obtain prior approvals from relevant authorities. This includes licensing regulators and different governing bodies specific to sectors.
Besides, businesses must also maintain separate records for accounting for their onshore activities. They must comply with the federal corporate tax system in the UAE to adhere to financial regulations.Flexible Workforce and Cost Implications
One of the key benefits for free zone companies as a result of this decision is their ability to use their existing workforce for onshore operations. Employees who are registered under free zone jurisdictions can now work on mainland projects while enjoying the benefits of being employed in a free zone.
This is a notable advantage for businesses navigating Emiratisation policies and workforce quotas. These companies need not hire additional employees based in the mainland.
From a financial perspective, the new framework introduces a structured fee system.
- Establishing a branch in the free zone with operating rights in the mainland will cost businesses AED 10,000 per year.
- Businesses can obtain a six-month temporary permit for short-term business activities in the mainland for AED 5,000.
Implementing the New Norms for Accessing the Mainland
In collaboration with free zone authorities, the Dubai Department of Economy and Tourism (DET), will publish a list of approved economic activities within the next six months. This list will outline the types of businesses that will be allowed to operate onshore under the new framework.
Free zone businesses that currently operate onshore without a proper license need to regularize their status by March 3, 2026. The DET is entitled to extend this grace period if necessary. Thus, businesses will have ample time to comply with the updated regulations.
Professional Consultancy Services to Establish a Company in Mainland Dubai
As businesses await the new regulations to be implemented, they expect a phased rollout from the government. The success of this framework will ultimately depend on how efficiently regulatory bodies streamline application processes.
Organizations must work closely with professional consultants like the IMC Group to streamline the process of establishing their company on the mainland. These experts comprehensively guide businesses on how free Zone companies can operate in the Dubai mainland. Companies looking to capitalize on the strategic decision of Dubai must seek expert support as they expand their operations onshore.
