Dubai’s Executive Council has introduced Resolution No. (11) of 2025, which aims to break down barriers between free zones and the mainland, offering enhanced flexibility for businesses and creating new opportunities for growth.This landmark initiative is designed to support free zone companies in expanding their operations into the mainland, positioning Dubai as an even stronger global business hub.
Key Features of the Resolution
The primary goal of the resolution is to enable companies based in Dubai’s free zones to secure onshore licenses, which allows these companies to expand their operations beyond their designated free zone boundaries and enter the mainland market. By fostering greater opportunities for growth, this resolution is set to stimulate economic activity and elevate Dubai’s position as a global business hub.
While the resolution offers substantial benefits for free zone companies, it explicitly excludes financial institutions licensed within the Dubai International Financial Centre (DIFC) from the provisions. These entities will continue to be governed by their current legal structure.
Simplified Licensing Options
To ensure a smooth transition for free zone companies, the resolution outlines various licensing options. These include branch establishment licenses and temporary permits for specific activities. These licenses will be issued by the Dubai Department of Economy and Tourism (DET), which will be in charge of ensuring regulatory compliance.
Approved Activities and Licensing Timeline
Within the next six months, the DET will finalize a list of approved economic activities for mainland operations. The impact of this resolution will vary depending on whether businesses hold a branch license in the emirate, a branch with headquarters in the free zone, or a permit for specific activities.
Tax Implications for Mainland Operations
While businesses in free zones benefit from a 0% corporate tax rate on qualifying income, this tax advantage does not not apply to activities carried out in mainland Dubai. Companies expanding into the mainland will be subject to the standard 9% corporate tax rate. It’s essential for businesses to understand this distinction when planning their expansion strategies.
Economic Growth and New Market Access
The resolution opens up new avenues for business expansion, providing free zone companies with the ability to access additional markets and broaden their reach. This initiative is expected to stimulate increased economic activity, create more jobs, and encourage innovation. As a result, Dubai is strategically positioned to enhance its global appeal as a prime destination for business, innovation, and sustainability.
A Clear Signal to the Global Business Community
By implementing this resolution, Dubai reaffirms its commitment to supporting business growth and positioning itself as a forward-thinking global business hub. The initiative sends a clear message to the international business community that Dubai is a progressive, investment-friendly destination that encourages innovation and entrepreneurial success.
Compliance and Inspection Requirements
All businesses operating outside the free zones within the Emirate of Dubai must comply with the resolution’s provisions within one year from its effective date. If necessary, the Director General of the DET may extend this compliance period by an additional year. Furthermore, businesses operating under the resolution will be subject to inspections in accordance with relevant federal and local laws and the procedures agreed upon between the DET and the licensing authority.
Future Prospects and Strategic Implications
This resolution is expected to attract new businesses to Dubai by creating a more flexible and competitive environment. As Dubai continues to expand as a global business hub, initiatives like this one are critical to shaping the future of the city’s economy. The resolution is a clear step toward fostering a dynamic, business-friendly ecosystem that supports sustainable growth and global investment.
