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Operating a Free Zone company in Dubai offers significant advantages: full foreign ownership, tax benefits, and simplified administration. However, until recently, businesses were restricted from engaging directly with mainland clients without intermediaries, often incurring distributor commissions of up to 25 per cent.
That framework has now been redefined. On 3 March 2025, Crown Prince Sheikh Hamdan introduced Executive Council Resolution No. 11 of 2025, establishing a clear legal basis for Free Zone businesses to conduct operations within the mainland.
This blog explains what the new resolution means for your business and whether it’s worth making the shift.
Dubai operates two parallel business jurisdictions; each is designed for different strategic purposes. Understanding this structure is essential before exploring how Resolution 11 bridges them.
Dubai’s Free Zones offer compelling advantages that have driven remarkable growth. From early 2021 to November 2024, Free Zone licenses surged 200%, from under 70,000 to over 210,000. Dubai alone holds 112,000+ free zone licenses, representing 53% of all UAE free zone licenses. The value proposition is straightforward:
Dubai’s major Free Zones, including DMCC, JAFZA, Dubai Silicon Oasis, and Dubai Healthcare City, target specific industries from technology to healthcare.
Mainland companies, registered through the Department of Economic Development (DED), operate under different rules with distinct advantages:
However, these benefits come with higher costs: licensing fees typically run AED 12,000-15,000+, physical office space is mandatory, and compliance requirements include annual audited financials. The 9% corporate tax on profits above AED 375,000 also applies.
Until March 2025, Free Zone companies were not permitted to trade directly in the mainland. Businesses overcame this restriction through costly alternatives:
Under the Dubai Economic Agenda D33, the Emirate aims to double its economy to AED 32 trillion over the next decade, driven by boosting foreign trade, FDI inflows, and productivity. Yet one structural bottleneck remained: Free Zone firms contributing immense economic value couldn’t sell directly within Dubai itself.
Resolution 11 removes this limitation, aligning regulatory structure with economic ambition and enabling more integrated growth.
Executive Council Resolution No. 11 of 2025
Since March 3, 2025, Free Zone companies across Dubai have gained legal pathways to mainland operations. After seven months of implementation, the framework has proven both practical and accessible.
The resolution applies to companies in Dubai’s Free Zones with one notable exception: the Dubai International Financial Centre. DIFC operates under its own independent legal framework with specialised financial services regulations and a separate judicial system, so it remains outside this framework.
For everyone else, from DMCC to JAFZA to Dubai Healthcare City, the resolution provides three distinct authorization options.
The compliance obligations
Free Zone companies must:
Businesses already operating in the mainland (before the resolution) must regularize their status by March 3, 2026, the one-year compliance deadline. DET may grant one-time extensions, but applications must be submitted before the initial deadline.
By September 3, 2025, DET published the approved activities list, specifying which business activities qualify for branch licenses versus temporary permits. Not all activities received immediate approval, so verification against the official list is essential.
Resolution 11 outlines three methods for Free Zone companies to access mainland markets. Each option addresses various operational requirements and investment amounts.
Annual Cost: AED 10,000 license + office rental (typically AED 20,000-50,000+)
Validity: 12 months, renewable annually
Legal Status: Extension of parent Free Zone company (not a separate legal entity)
This option establishes a physical branch office in mainland Dubai. The branch operates under your Free Zone company’s name, with the parent company retaining full legal responsibility.
Requirements include:
Strategic fit:
This pathway suits businesses requiring physical mainland presence. Retail operations needing storefronts, showrooms requiring high-traffic locations, and client-facing services where customers expect to visit, these scenarios justify the additional office investment.
For companies with substantial mainland revenue projections (AED 500,000+), the office cost becomes proportionally insignificant relative to the market opportunity.
Annual Cost: AED 10,000
Validity: 12 months, renewable annually
Physical Location: Free zone only (no mainland office required)
This option provides full mainland market authorization while operating entirely from your existing Free Zone premises. Same legal authorization, same activity scope, but without mainland office expenses.
Key advantages:
Strategic fit:
This pathway benefits e-commerce businesses fulfilling mainland orders from Free Zone warehouses, B2B service providers (consulting, IT, professional services) serving clients remotely, SaaS and technology companies operating digitally, and trading entities that don’t require physical mainland visibility.
For businesses asking can Free Zone company do business in mainland while optimizing costs, this represents the most efficient solution. You gain full market access for AED 10,000 annually, no additional infrastructure investment required.
Cost: AED 5,000
Validity: Up to 6 months (non-renewable, but convertible to full license)
Scope: Specific, time-limited activities
The temporary permit authorizes limited mainland operations for specific projects or market testing purposes. It’s not renewable in the traditional sense; after six months, you either convert to a full branch license or cease mainland operations.
Requirements include:
Strategic fit:
This option suits businesses testing mainland market demand before committing to permanent infrastructure, companies with short-term project contracts, seasonal operations with time-limited activity, and pilot programs exploring new market segments.
The six-month timeframe provides sufficient data for informed decision-making about long-term mainland investment.
Cost and return on investment
Understanding the financial implications is essential when assessing mainland expansion. Resolution 11 greatly lowers the entry costs compared to traditional distributor setups.
Traditional distributor model (before March 2025):
Branch licence model (after March 2025):
Return on investment:
A company breaks even with a branch licence at approximately AED 50,000 in mainland revenue. Beyond this point, additional income directly increases net profit.
Temporary permit model:
At higher volumes, the cost efficiency becomes even more evident. For instance, a company generating AED 2 million in mainland sales could save nearly AED 390,000 annually compared to the previous distributor-based model.
Use Stratrich’s Cost Calculator to estimate your own potential savings.
Resolution 11 removes this limitation, aligning regulatory structure with economic ambition and enabling more integrated growth.
The question isn’t just “can freezone company do business in mainland,” but which pathway optimizes your specific business model.
Choose the physical branch when:
Your industry requires customer-facing locations. You’re in retail, healthcare, education, or services where clients expect to visit you. Your mainland revenue projections (AED 1 million+) justify the office investment. You’re building long-term brand presence in mainland markets.
Choose the branch from Free Zone when:
Your operations are digital or remote service focused. You’re in e-commerce, B2B services, SaaS, or trading where physical location doesn’t impact service delivery. Cost optimization is a priority. You want to test mainland markets before infrastructure commitment. This option provides maximum value for most businesses.
Choose the temporary permit when:
You’re validating market assumptions before permanent investment. You have a specific 3-6 month project or contract. You’re exploring seasonal opportunities. You want to minimize financial risk during initial market entry. After six months, you can convert to a full license if validation succeeds.
Executive Council Resolution No. 11 of 2025 is a genuine breakthrough. It officially allows Dubai’s Free Zone businesses to engage directly with mainland customers, eliminating inefficiencies and unlocking new growth potential.
Can a Free Zone company do business in the mainland? Yes, clearly and legally. The more vital question is: Which pathway best suits your business?
Not sure where to start? Consult with a Stratrich business setup advisor to assess costs, compliance, and the fastest route for your expansion.
