Dubai’s Executive Council Resolution on Free Zone Integration with the Mainland

Executive Council Resolution 11 of 2025 defines how Dubai’s free zone businesses can operate in the mainland under DET licensing and inspections.

Dubai has taken a major step toward modernizing its licensing system through Executive Council Resolution No. (11) of 2025. For the first time, free zone entities, with the exception of those registered in the Dubai International Financial Centre, can conduct activities in mainland Dubai under a proper framework. The move addresses a long-standing limitation that forced companies to set up separate mainland subsidiaries. It provides clarity for businesses and help bring policy nearer to investor expectations.

Requirements for conducting activities outside Dubai’s free zone

Under Article (3), a free zone establishment may operate outside its zone and within the Emirate only if it obtains one of the licenses or permits specified in Article (4). Companies must:

• Comply with all relevant federal and local legislation applicable to their activity;
• Maintain separate financial records for activities conducted in the mainland, distinct from free zone records; and
• Secure other licenses or permits from competent entities if they intend to operate outside Dubai in other Emirates.

Types of licenses and permits

Article (4) provides three routes for mainland access. All are subject to the approval of the Dubai Department of Economy and Tourism (DET) and the relevant free zone authority, with additional consent from regulators when required:

• License to establish a branch within the Emirate: A branch physically located in Dubai. The license is valid for one year and renewable;
• License to establish a branch operating out of the free zone: A dual license enabling a free zone entity to operate in the mainland and remain based in the zone. The license is valid for one year and renewable; and
• Temporary permit: Businesses can get authorized to conduct specific activities in Dubai for up to six months.

DET activity list

A central feature of the framework is the DET’s responsibility to publish, by September 3, 2025, a list of eligible economic activities. The list will specify which activities require a branch license and which can be undertaken under a temporary permit. Companies should begin aligning their operations in anticipation of this list. The DET Director General also has the authority to impose additional conditions where required.

Compliance obligations

Companies making use of this regime must:

• Maintain separate financial records for activities conducted in the mainland;
• Comply with applicable federal and local laws; and
• Undergo audits and inspections conducted jointly by DET and the relevant free zone licensing authority.

This separation is especially important for corporate tax treatment, as mainland activities could affect the eligibility of free zone entities for preferential tax status.

Licensing conditions

License to establish branches within the Emirate

Article (5) details the conditions for branches located in Dubai:

• Application must be submitted to DET using prescribed procedures;
• Prior approval of the free zone licensing authority is required;
• Approval from government entities supervising the intended activity must be secured, where applicable;
• The parent company’s license must remain valid;
• The branch must be physically located within Dubai;
• Prescribed fees must be paid; and
• Additional conditions issued by the DET Director General must be met.

Branches established under this route are not separate legal entities and remain part of the parent company.

License to establish branches operating out of free zones

Article (6) provides conditions for branches operating out of free zones:

• Submit application to DET in line with required forms and procedures;
• Provide these documents: memorandum of association, free zone trade license, and passport and Emirates ID of the company’s manager;
• Secure approvals from the free zone authority and, where applicable, sector regulators;
• Ensure the parent company’s license remains valid; and
• Pay prescribed fees and meet any conditions issued by the DET Director General.

As with other branches, these do not have separate legal personality from the parent entity.

Temporary permits for activities

Article (7) allows DET to issue temporary permits for up to six months. It must meet these conditions:

• Submitting applications and supporting documents (like memorandum of association and free zone trade license);
• Obtaining approvals from the free zone licensing authority and relevant regulators;
• Ensuring the parent company’s license is valid;
• Conducting only those activities listed under Article (9); and
• Paying prescribed fees and fulfilling additional conditions set by DET.

Workforce provisions

Under Article (8), establishments licensed under this resolution may engage their existing workforce registered in the free zone. Employees retain free zone employment privileges while supporting authorized mainland operations. This avoids duplication of human resource structures and provides flexibility for expansion.

Economic activity list

Article (9) requires DET, in coordination with free zone licensing authorities, to issue a list of activities that establishments may conduct in the mainland within six months of the resolution’s effective date. The list will specify which activities require:

• A branch within the Emirate;
• A branch operating out of the free zone; and
• A temporary permit.

Audit and inspection

Article (11) subjects authorized establishments to audits and inspections under applicable federal and local legislation. Oversight will be conducted jointly by DET and the relevant free zone authority to ensure compliance with both sets of regulations.

Fees and transition

Article (12) prescribes the following annual fees:

• AED 10,000 (US$2,722.9) for issuing or renewing a license to establish a branch operating out of the free zone.
• AED 5,000 (US$1,361.4) for issuing or renewing a temporary permit.

Entities already conducting activities in mainland Dubai must regularize their status within one year from March 3, 2025, the resolution’s effective date. DET may grant a one-time extension if necessary. Non-compliance may lead to penalties or loss of authorization.

What this entails for investors

This resolution provides a transparent framework for market integration. Companies can now expand into mainland Dubai without restructuring operations entirely. The system clarifies costs, licensing procedures, and compliance requirements, while allowing firms to use their existing workforce. For foreign businesses, it reduces uncertainty and provides a defined pathway into one of the Middle East’s largest markets. The measure also strengthens Dubai’s appeal as a global investment hub by aligning its regulatory system with international business expectations.

For Dubai, it highlights the city’s position as a leading commercial center by offering flexible and accountable pathways for expansion across its business ecosystem.

Read more: Comparing FDI Incentive Models: Abu Dhabi Hub Vs Riyadh SEZs

(US$1 = AED 3.67)

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