Dubai has unveiled a groundbreaking resolution aimed at facilitating the expansion of free zone companies within the emirate, reinforcing its commitment to fostering a dynamic business environment. The new regulation, 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, allows free zone businesses to extend their operations into mainland Dubai under specified conditions.
Under the new framework, any company or institution licensed by a free zone authority can now conduct business outside its designated free zone, provided it secures the necessary permits from the Dubai Department of Economy and Tourism (DET). This regulation, however, does not apply to financial institutions operating within the Dubai International Financial Centre.
Companies looking to expand must adhere to federal and local laws relevant to their operations and maintain separate financial records for activities conducted outside the free zone. Additionally, if a business intends to operate beyond Dubai, it must obtain the required approvals from the respective authorities.
This initiative is expected to streamline the expansion process for free zone companies, eliminating previous barriers and making Dubai an even more attractive destination for businesses. According to the resolution, DET has the authority to issue licenses for establishing mainland branches of free zone companies. These licenses, valid for one year and renewable, allow companies to either set up a branch in Dubai or operate specific activities through permits issued by DET. Within six months, DET, in collaboration with licensing authorities, will also release a comprehensive list of economic activities that free zone companies can legally conduct within Dubai.
Furthermore, the resolution provides a clear framework for licensing requirements, activity permits, and employment conditions. Companies operating under this new regulatory structure will also be subject to inspections to ensure compliance.
This strategic move aligns with Dubai’s ambitious D33 economic agenda, which aims to double the city’s economy to Dh32 trillion ($8.71 trillion) within the next decade. The plan focuses on establishing Dubai among the world’s top three global cities, supporting 30 private companies in reaching unicorn status, and positioning the emirate as a leader in digital transformation, sustainability, and economic diversification by 2033.
Dubai’s economic momentum has remained strong, with the city recording a 3.1 percent growth in the first nine months of last year, reaching Dh339.4 billion. Key sectors such as wholesale and retail trade, transportation, storage, and financial services played a crucial role in driving this growth. Additionally, Dubai maintained its status as the world’s top destination for greenfield foreign direct investment (FDI) projects for the fourth consecutive year. The emirate attracted 1,117 greenfield FDI projects worth over Dh52.3 billion last year—a 33.2 percent increase from 2023—marking the highest recorded investment value since 2020.
Business leaders have welcomed the resolution as a game-changing step towards a more flexible business landscape. Paul Bryson, managing director of Virtuzone, highlighted that while companies have previously been able to establish mainland branches, challenges remained in specific commercial activities, particularly in the trading of physical goods. He suggested that the next logical step would be enabling corporate migration between different UAE jurisdictions, further enhancing business flexibility and economic expansion.
By introducing this progressive regulation, Dubai is reinforcing its position as a global business hub, offering companies greater opportunities to thrive while solidifying its vision for long-term economic growth.