When Dubai announced the new free zone mainland operating permit in October 2025, it marked one of the most significant shifts in the UAE’s business landscape in years. For the first time, companies based in Dubai’s free zones can legally operate in the mainland without forming a separate onshore entity. This simple permit removes years of red tape, bridging a long-standing divide between two of Dubai’s most dynamic business ecosystems.
For founders, SMEs, and global companies already based in free zones like DUQE, this new permit means direct access to mainland clients, government contracts, and new revenue opportunities, all while keeping the flexibility and tax advantages of a free zone setup.
What Is the Free Zone Mainland Operating Permit?
The free zone mainland operating permit is a Dubai-led initiative that allows free zone companies to conduct approved business activities within Dubai’s mainland jurisdiction. It was launched under Executive Council Decision No. 11 of 2025, a move designed to simplify the rules for companies operating across Dubai’s economic zones.
In practical terms, it is a time-bound licence issued by the Dubai Department of Economy and Tourism (DET) that extends a free zone company’s right to do business with mainland clients. The permit is valid for six months at a cost of 5,000 and can be renewed at the same rate.
It initially covers non-regulated activities such as technology services, consultancy, creative design, and trading. Regulated industries like healthcare, finance, and education are expected to be added later once specific frameworks are in place.
The permit is available exclusively to Dubai-licensed free zone companies that hold a Dubai Unified Licence (DUL), a unique identifier connecting their business across government systems. The entire application process is completed online through the Invest in Dubai digital platform.
Why Dubai Introduced It
For decades, companies in Dubai’s free zones and those on the mainland operated under separate regulatory systems. Free zones offered 100% foreign ownership and tax incentives, but companies were limited to international trade or business within their zones. Mainland companies, on the other hand, could freely serve local clients but required more complex licensing.
Dubai’s new economic strategy, the D33 Agenda, aims to double the emirate’s GDP by 2033. To achieve that, regulators are dismantling internal barriers that slow growth. The free zone mainland operating permit is part of this effort, allowing over 10,000 free zone businesses to access new markets, while helping Dubai attract and retain investment.
Officials describe it as a step toward a “single, seamless Dubai marketplace” where businesses can grow without jurisdictional limitations. It also aligns with the UAE’s corporate tax framework introduced in 2023, which requires clear separation between free zone and mainland income.
Who Is Eligible
Any Dubai-based free zone company that holds a valid licence and a Dubai Unified Licence (DUL) can apply. The company must be in good standing and engaged in permitted, non-regulated activities.
The permit is currently open to businesses operating in sectors such as technology, digital media, consulting, design, and general trading. Financial institutions, healthcare providers, and educational institutions are excluded for now.
Companies in financial free zones like DIFC and ADGM are not eligible because they are governed by separate federal laws.
How It Works in Practice
The permit effectively creates a mainland branch of the free zone company. This branch has no separate legal personality; it operates under the name and liability of the parent entity. That means the free zone company remains responsible for contracts, obligations, and tax compliance arising from its mainland activities.
A company can keep its existing staff and office in the free zone. Employees do not need new visas or sponsorship transfers to deliver services onshore, which is particularly advantageous for startups and small teams.
For instance, a creative agency based in DUQE Free Zone can now sign contracts with Dubai-based clients, attend meetings downtown, and deliver work onsite, all under the new permit. It does not need to set up a separate mainland company or appoint a local distributor.
Another example is a logistics firm in JAFZA that can sell directly to mainland retailers. The sale is taxed at 9% on mainland revenue, but the company still enjoys 0% tax on exports or international trade.
Compliance and Tax Considerations
While the permit makes operations easier, compliance remains critical. Free zone companies using the permit must maintain separate accounts for their mainland and free zone activities. Any income earned from mainland clients is subject to the UAE’s 9% corporate tax, while qualifying free zone income remains tax-exempt.
This distinction is vital for maintaining status as a Qualifying Free Zone Person (QFZP) under federal tax law. Companies should also ensure correct VAT registration and invoicing for onshore transactions.
In terms of employment, the branch structure allows existing staff to work across jurisdictions, and current policy confirms that Emiratisation quotas do not apply to these branches. However, companies should keep records of staff assignments and ensure compliance with federal labour law.
Costs, Timelines, and Documentation
The permit costs 5,000 for a six-month period and can be renewed indefinitely at the same rate. Compared with forming a mainland branch, which can cost 10,000 or more annually, this is a flexible and cost-efficient option.
Applications are processed entirely online via Invest in Dubai. The main documents required include a copy of the free zone licence, the DUL number, valid Emirates ID or passport of the owner or manager, and a list of intended mainland activities.
Approvals are usually issued within a few working days, reflecting Dubai’s commitment to maintaining a fast, digital-first business environment.
Benefits for Businesses
The introduction of this permit delivers clear advantages to entrepreneurs and investors.
Free zone companies can now access the mainland market directly, expanding their client base and revenue potential. They can also bid for government contracts, a major opportunity previously reserved for mainland-licensed firms.
SMEs benefit from reduced risk. Instead of investing in a new company structure, they can test demand onshore for six months and decide whether to continue. Larger firms can integrate their Dubai operations under one entity, simplifying management and compliance.
The change also benefits the broader economy by encouraging cross-jurisdiction collaboration. Mainland companies can partner directly with free zone firms, driving competition, innovation, and knowledge sharing.
Risks and Limitations
While the permit is an important breakthrough, businesses should understand its boundaries. It is only valid within Dubai’s mainland and cannot be used to operate in other emirates. Companies wishing to work in Abu Dhabi or Sharjah must comply with those emirates’ regulations.
The 6-month duration also means renewals are frequent, so businesses must stay organised. Late renewals could interrupt their ability to operate legally onshore.
Additionally, regulated activities remain excluded until further notice. Companies in healthcare, education, or financial services must continue using existing dual licensing frameworks until sector-specific approvals are introduced.
Finally, as mainland operations are taxable, companies must invest in proper accounting systems to separate revenues and expenses. Incorrect reporting could lead to fines or loss of tax exemptions.
What This Means for DUQE Businesses
For founders operating from DUQE Free Zone, the mainland operating permit is particularly transformative. DUQE’s ecosystem already caters to entrepreneurs who want flexibility, access to global markets, and end-to-end compliance support.
Now, those same founders can legally reach Dubai’s mainland market without compromising ownership or paying unnecessary setup costs. A digital marketing agency in DUQE, for example, can now serve clients in Downtown Dubai or Business Bay while still enjoying DUQE’s 0% corporate tax on international revenue.
DUQE’s in-house advisors can assist with activity mapping, documentation, and tax planning to ensure full compliance under the new rules. It gives DUQE businesses the best of both worlds, the tax and setup benefits of a free zone, with the market reach of a mainland firm.
What Comes Next
Dubai authorities have confirmed that future phases of the program will gradually open the permit to regulated sectors such as healthcare and finance. They are also reviewing the potential to extend permit duration to one year, reducing administrative renewals.
Other emirates are watching closely. If successful, similar frameworks may appear across the UAE, creating a more unified national market. This could eventually eliminate the traditional free zone-mainland divide altogether, giving companies seamless access across all seven emirates.
A Smarter Way to Grow in Dubai
The free zone mainland operating permit is more than a policy update; it is a new way of doing business in Dubai. It allows free zone companies to expand into the mainland confidently, tapping into a thriving domestic market while keeping their existing advantages.
For founders, it removes barriers that once limited growth. For policymakers, it represents another stride toward Dubai’s D33 vision of becoming a top global economy.
If you’re running a free zone business, whether a startup in DUQE or an established trading firm, now is the time to explore this opportunity. With DUQE’s guidance, you can apply for your permit, ensure compliance, and start operating across Dubai’s mainland with complete legal clarity.
Speak with DUQE’s experts today to map your business activities, prepare your documentation, and begin expanding into Dubai’s local market.