Importance of Transfer Pricing in UAE Tax Compliance
October 21, 2025
Free Zone Companies Can Now Operate in Mainland Dubai
Free Zone companies can now operate in Mainland Dubai, opening new doors for business expansion, client access, and growth opportunities across the UAE. This strategic move simplifies trade, boosts flexibility, and strengthens Dubai’s position as a global business hub.
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Free Zone Companies Can Now Operate in Mainland Dubai
Hey there, fellow entrepreneur! If you’re running a free zone company in Dubai, you’ve probably felt that itch to break out of the zone and tap into the buzzing mainland market. Well, hold onto your coffee, the stars have aligned. Dubai’s latest game-changer, the Free Zone Mainland Operating Permit, is here to make that dream a reality. No more jumping through hoops or setting up clunky subsidiaries. This isn’t just a policy tweak; it’s a full-on invitation to supercharge your business in the heart of the UAE’s economic powerhouse.
As a seasoned tax and business setup advisor at Tulpar Global Taxation, I’ve seen firsthand how these shifts can transform operations for business owners like you. With our deep roots in the UAE, branches in Dubai, Sharjah, and Ajman, we’re all about making cross-jurisdiction operations feel effortless. In this guide, we’ll dive deep into what this means for your free zone company expansion, why it’s a no-brainer for growth, and how to get started without the usual headaches.
What’s the Buzz About? Decoding the Free Zone Mainland Operating Permit
Your free zone setup has been humming along with perks like 100% foreign ownership and zero taxes on exports, but mainland Dubai’s vast local trading opportunities have been just out of reach. Enter Dubai Executive Council Resolution No. (11) of 2025, a bold move that’s ripping down those barriers. Launched by the Department of Economy and Tourism (DET), this resolution greenlights free zone companies to dive into mainland activities, blending the best of both worlds for ultimate business flexibility.
At its core, the Free Zone Mainland Operating Permit is your golden ticket. It’s a structured, low-cost license that lets you conduct business right in the mainland without relocating your entire operation. Think of it as a bridge connecting the innovative, tax-exempt haven of free zones like DMCC or JAFZA to the dynamic domestic supply chains and government tenders of mainland Dubai. This isn’t some vague promise; it’s backed by the Dubai Business Registration and Licensing Corporation (DBLC) and the Dubai Free Zone Council, ensuring everything’s above board and ready to roll.
The Resolution That’s Redefining Business Setup in Dubai
Dubai’s Executive Council didn’t just wake up and decide to shake things up, this ties straight into the D33 Economic Agenda, aiming to double the emirate’s economy by 2033 and cement its spot as a top global investment hub. Resolution No. (11) of 2025, effective from March 2025, formalizes what savvy free zone entities have been nudging toward for years: true market integration. It excludes financial setups in the Dubai International Financial Centre (DIFC) for now, but for everyone else from tech startups to trading pros, it’s open season on mainland expansion.
What sets this apart from past tweaks, like the UAE Commercial Companies Law amendments in 2020 or Abu Dhabi’s Dual Licence Initiative? It’s the emphasis on simplicity. No need for a local sponsor or endless paperwork; just approval from DET and your free zone authority. This regulatory innovation is all about easing cross-jurisdiction operations, slashing setup times, and fueling that entrepreneurial spirit Dubai does so well.
Who Qualifies? Eligibility for Free Zone Mainland Access
Not every free zone company can jump in feet first, but the bar is refreshingly low. To snag this permit, your business needs a valid Dubai Unified Licence (DUL), that streamlined all-in-one doc that’s become the gold standard for UAE business registration. You’re good to go if you’re in non-regulated sectors like technology, consultancy, design, professional services, or general trading. Regulated industries?
Oh, and a quick heads-up: This is for Dubai-based free zones only, keeping things focused on the emirate’s ecosystem. Whether you’re a small enterprise eyeing local client bids or a multinational scaling up, as long as you’re compliant with federal laws, you’re in the club. At Tulpar Global Taxation, we’ve helped dozens of clients verify their DUL status; it’s a quick chat that can save you weeks of guesswork.
Why This is a Game-Changer for Free Zone Company Expansion
Running a free zone company in Dubai has always been a sweet deal: full foreign ownership, no customs duties on imports/exports, and that enviable 0% corporate tax on qualifying income. But mainland restrictions? They’ve kept you siloed, forcing workarounds like distributors or separate entities. Now, with this permit, you’re unlocking doors to a $100 billion+ local economy, all while keeping your free zone perks intact. It’s like upgrading from economy to business class without ditching your favorite lounge.
This shift isn’t just hype; it’s projected to spike cross-jurisdictional activity by 15-20% in year one, touching over 10,000 active free zone firms. For UAE business owners and finance pros, it’s a chance to weave into domestic supply chains, snag billion-dirham government contracts, and scale without the usual red tape. Tax consultants, take note: this levels the playing field between free zone vs. mainland setups, making hybrid models the smart play for 2025 and beyond.
Tapping into Local Markets and Lucrative Government Tenders
No more relying on middlemen for those high-value local trades. You can now bid on tenders, integrate with UAE suppliers, and serve clients from Deira to Downtown. Imagine your consultancy firm landing a DET contract or your trading outfit supplying Jumeirah retailers. This permit opens floodgates to opportunities once reserved for pure mainland players, boosting revenue streams and market share overnight.
For tech and professional services outfits, it’s especially potent. You get to leverage Dubai’s innovation ecosystem, think partnerships with local startups or plugging into the emirate’s digital economy push. It’s all about that seamless blend: Free zone efficiency meets mainland reach, driving real growth in a post-2023 corporate tax landscape.
Effortless Staff Deployment: No New Hires Required
Here’s where it gets even better for operational continuity. Your existing free zone team? They can now hop over to mainland gigs without missing a beat. Deploy that star consultant to a client meeting in Bur Dubai or send your trading exec to seal deals in Al Quoz, all while they keep their free zone visas and privileges. This workforce flexibility cuts hiring costs, speeds up onboarding, and lets you scale teams based on demand, not bureaucracy.
In a talent-hungry market like Dubai, this is pure gold. No visa quotas tied to office space or endless immigration filings. Just efficient, cost-saving deployment that keeps your business agile and your employees happy.
Low-Risk, Cost-Effective Pathways to Mainland Growth
Expansion shouldn’t break the bank, right? At just Dh5,000 for a six-month permit (renewable at the same rate), this is the ultimate low-risk entry. Compare that to full branch setups or dual licenses, which can run into tens of thousands. It’s tailor-made for SMEs and startups testing mainland waters — dip a toe in, measure the splash, then dive deeper. Plus, with no need for physical mainland offices right away, you’re saving on rent and setup while reaping the rewards.
Your Roadmap: How to Secure the Free Zone Mainland Operating Permit
Ready to make it happen? The beauty of this permit is its digital-first vibe — no queues at government offices, just a few clicks on the Invest in Dubai (IID) platform. We’ve walked clients through this at Tulpar, and it’s smoother than a souk bargain. From eligibility checks to approval, expect the whole shebang in days, not weeks. Let’s break it down so you can hit the ground running.
Quick Eligibility Check: Is Your Business Ready?
Confirm your DUL is active and covers eligible activities. Non-regulated? You’re golden for phase one. Got a free zone entity outside DIFC? Check. Compliant with UAE corporate tax rules? Double-check. If you’re unsure, tools on the IID site or a quick consult can flag any gaps. Review your current setup against DET’s upcoming activity list (due September 2025) to stay ahead.
The Straightforward Application Process
Head to the Invest in Dubai platform; it’s user-friendly, even if tech isn’t your forte. Upload your DUL, business profile, and activity details. Pay that Dh5,000 fee online, and submit. DET and your free zone authority review it (usually 5-7 business days), and boom, permit in hand. No notary stamps or sponsor sign-offs; it’s all about that digital efficiency Dubai champions.
Post-Approval: Launching Your Mainland Operations
Once approved, you’re live! Maintain separate books for mainland revenues (more on that below), deploy your team, and start trading. Track performance quarterly to decide on renewal or upgrades like a full branch license. Tulpar’s pros can handle the backend, ensuring you’re audit-ready from day one.
Navigating Tax and Compliance: Staying on the Right Side of UAE Regulations
Ah, taxes the unglamorous but essential side of expansion. This permit doesn’t erase your obligations; it just makes them crystal clear. UAE’s 9% corporate tax kicks in on mainland-generated income, but your free zone exports? Still exempt. It’s a balanced setup that rewards smart structuring, and as tax consultants, we’re here to optimize it for you.
Understanding Corporate Tax Implications for Hybrid Operations
That 9% rate applies only to qualifying mainland profits, per Federal Tax Authority (FTA) guidelines. Free zone income remains sheltered, creating a hybrid tax haven. For trading firms, this means exporting goods duty-free while taxing local sales fairly. Finance pros will love the clarity: No double taxation traps if you segregate properly. It’s a win for cash flow in Dubai’s competitive landscape.
Mastering Separate Financial Records and Audits
Keep it simple: Ring-fence mainland transactions with dedicated ledgers, invoices, and bank accounts. This isn’t busywork; it’s your shield against FTA audits and ensures smooth renewals. Expect occasional DET inspections, but with clean records, it’s a breeze. At Tulpar, we specialize in these setups, blending free zone exemptions with mainland compliance for zero-stress filings.
Partner with Tulpar Global Taxation: Your Trusted Ally for UAE Business Success
Why go it alone when you can team up with experts who’ve navigated every twist in Dubai’s regulatory maze? At Tulpar Global Taxation, we’re more than consultants. We’re your strategic partners for free zone mainland expansions, tax optimization, and beyond. With over a decade of experience serving UAE business owners, finance whizzes, and tax pros, we provide proven expertise, authoritative insights, and rock-solid trustworthiness.
Our Dubai Branch: Heart of the Action
Nestled in the vibrant core of Dubai, our flagship branch is your one-stop hub for DET filings, permit applications, and real-time advice on cross-jurisdiction operations. From DMCC to JAFZA clients, we’ve streamlined expansions for tech firms and traders alike, ensuring you hit the mainland running with minimal fuss.
Sharjah Branch: Cost-Smart Solutions with Regional Reach
In Sharjah’s industrial powerhouse, our team excels at bridging free zone perks with mainland ambitions. Perfect for manufacturing or logistics outfits, we handle FTA compliance and dual setups, leveraging Sharjah’s lower costs to maximize your ROI without sacrificing Dubai access.
Ajman Branch: Agile Support for Swift Growth
Ajman’s free zone scene is booming, and so is our support there. Our Ajman pros focus on quick-turnaround permits and tax strategies for SMEs, making it easy to expand from Ajman’s affordability into Dubai’s opportunities. Whether it’s visa deployments or record-keeping, we’re geared for your pace.
There you have it, your blueprint to thrive in this new era of free zone mainland operations. Dubai’s doors are wide open, and with the right moves, your business could be the next big success story. Got questions? Contact Tulpar Global Taxation – let’s plot your expansion.
Can Free Zone companies legally operate in Mainland Dubai now?
Yes, Free Zone companies in the UAE can now operate in Mainland Dubai under updated regulations, provided they meet specific compliance requirements set by the authorities. This move aims to boost economic flexibility and cross-border business within the UAE. Tulpar Global Taxation can guide Free Zone businesses on how to expand legally and efficiently into the mainland.
What has changed in UAE laws allowing Free Zone companies to operate in the mainland?
Recent reforms under UAE commercial laws have relaxed the restrictions on Free Zone entities, allowing them to conduct business in the mainland without the need for a local distributor in certain sectors. These changes are part of the UAE’s wider strategy to attract foreign investment and ease of doing business.
Do Free Zone companies need a Mainland trade license to operate outside the Free Zone?
In most cases, yes. Free Zone companies must obtain a Dual License or work through specific arrangements approved by authorities to legally conduct business in the mainland. Tulpar Global Taxation helps you understand which licensing model fits your business structure.
What are the benefits for Free Zone companies expanding to Mainland Dubai?
The key benefits include:
Access to a larger customer base in the mainland
Ability to work with government contracts
Freedom to open branches and offices across the UAE
More flexibility in hiring and partnerships
Tulpar Global Taxation helps UAE businesses leverage these benefits while staying compliant with tax and licensing laws.
Are there tax implications for Free Zone companies operating in the mainland?
Yes, there are corporate tax considerations. Operating in the mainland may mean a Free Zone company is no longer eligible for 0% corporate tax benefits. The UAE’s Corporate Tax Law defines taxable income based on where and how the business operates. Consult with Tulpar Global Taxation for a compliance-first tax strategy.
How can a Free Zone company get approval to operate in the mainland?
You’ll typically need:
Approval from your Free Zone authority
A No Objection Certificate (NOC)
Application for a Dual License with DED (Department of Economic Development)
Registration with the Federal Tax Authority if applicable
Tulpar Global Taxation handles this end-to-end process to ensure smooth legal transition.
Can Free Zone companies open branches or offices in Dubai mainland?
Yes. Free Zone companies can open a branch or a representative office in Dubai mainland if they fulfill legal and regulatory requirements. This setup allows brand expansion without forming a new entity. Our experts at Tulpar Global Taxation assist in strategic branch setup and compliance.
What sectors benefit most from Free Zone to Mainland business activity?
Sectors like tech, consulting, logistics, e-commerce, and professional services stand to benefit the most. These industries gain immediate access to Dubai’s vast business network and customer base. Tulpar Global Taxation works closely with sector-specific clients to optimize their market entry strategy.
Is a UAE national partner still required for Free Zone companies to operate in the mainland?
No, 100% foreign ownership is now allowed in many business activities, thanks to UAE’s updated commercial laws. However, some regulated sectors may still require a local service agent or partnership. Tulpar Global Taxation offers precise structuring advice based on your activity code and business goals.
How can Tulpar Global Taxation help Free Zone companies expand into Dubai mainland?
Tulpar Global Taxation specializes in:
Structuring compliant expansions into the mainland
Obtaining Dual Licenses or DED approvals
Managing corporate tax and VAT implications
Ensuring legal and regulatory compliance
With deep experience in the UAE market, Tulpar helps Free Zone businesses confidently scale across Dubai and beyond.
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