If you’re running a business in a UAE free zone, a question arises as the business grows: can free zone companies do business in the UAE mainland? Yes, but not automatically in 2026. It depends on the emirate, your business activity, and the licence or permit you get to work outside the free zone.
Things have become more flexible, especially in Dubai. Executive Council Resolution No. 11 of 2025 permits qualifying Dubai free zone companies to perform approved business activities within mainland Dubai, subject to acquiring the relevant licence or permit from the Dubai Department of Economy and Tourism (DET).
That means a free zone company no longer needs to set up a whole separate mainland company just to expand into the Dubai mainland.
Our business clients ask us this question almost every week at HA Group. This is a brief overview of what is going on, where things stand in 2026, and how to successfully trade with the mainland while preserving your advantages in the free zone.
Can a Free Zone Company Trade in the UAE Mainland?
Yes – free zone companies can now deal with the UAE mainland, but not instantly. It depends upon the emirate, your business activity and the license or permission you get.
Just because you have a free zone trade licence doesn’t mean you can open a store in a Dubai mall or invoice mainland customers freely throughout the nation. What it does give you, especially in Dubai, is access to an organised, permit-based system that lets you grow into the mainland without breaking up the company you already have.
Dubai no longer has the old general ban. It has been replaced by a limited system based on trade licenses.
Why did the Old Rule Exist?
A free zone is a customs-bonded jurisdiction. Goods brought into a free zone don’t have to pay customs duty because they haven’t officially entered the UAE for use yet. Companies in free zones can also have 100% foreign ownership, send all of their profits back to their home country, and pay no corporate tax on qualified revenue.
If these firms were permitted to sell freely onshore and retained all those advantages, then mainland enterprises, who had to pay the full cost of doing business, would have lost out. That was why the two markets remained separate. Free zone businesses may trade with other nations, with each other, or via a licensed local distributor. To conduct business directly with a customer on the mainland, they required a distributor, an office on the mainland or a dual license.
What Changed in 2026: Resolution No. 11 of 2025
The turning point was Dubai Executive Council Resolution No. 11 of 2025, which was made public on March 3, 2025, and is now legal. It set up an official system that allows businesses in qualified Dubai free zones to conduct activities outside their free zones and in central Dubai, as long as they obtain the right licence or permit from the Department of Economy and Tourism (DET).
This is really important for a few reasons:
- It makes official what was case-by-case: The decision means that branches and activity permits, which existed previously, are now part of a clear transparent framework that supports the Dubai Economic Agenda (D33).
- There is one major exception: The resolution does not apply to financial companies regulated in the Dubai International Financial Center (DIFC).
- A grace period applied: Companies already located onshore when the resolution entered into force were given a year from 3 March 2025 to regularise their position, with the possibility of a one-off extension. If that describes your business and you haven’t formalized things yet, act now, enforcement is tightening through 2026.
Understanding Dual Licensing
Most of this works via a process known as “dual licensing.” A dual licence helps your current business grow into the mainland through a branch or permit, so you don’t have to dissolve your free zone company and start over.
What makes it so appealing is:
- Your original licensing and free zone benefits will not be affected.
- Your ownership structure remains the same – no local sponsor or Emirati partner needed.
- You can negotiate contracts with customers on the mainland and, in many situations, compete for government contracts.
Cost varies by route. Branch licenses are more expensive than temporary permits, but a temporary permit is a good, inexpensive method to assess demand on the mainland before committing to a full branch.
Your Routes Into the Mainland Market
You can apply to DET for one of three options under Resolution No. 11 of 2025 for a qualified free zone establishment.
Open a Mainland Branch
Your free zone company opens a complete branch in mainland Dubai, under the jurisdiction of DET. The branch has the legal ability to execute contracts and charge local customers directly, while the parent company remains in the free zone. The branch is not a different legal entity from its parent; it is an extension and not a new firm. This is good for firms planning to have ongoing customer-facing onshore operations.
A Branch Operating From the Free Zone
This is the standout new route. You are issued a license to operate allowed business activities on the mainland while your main office is located in the free zone. This is great if you want to stay connected to the mainland without having to physically move your present company. The permit is renewed for a period of one year at a charge of about AED 10,000 each year.
A Temporary Permit
DET can grant temporary permission for a specific project, contract or brief assignment for a period not exceeding six months for around 5,000 AED.
Commercial representative or local distributor.
The old road is still in use. You appoint a licensed mainland distributor or, for e-commerce, a 3PL partner that pulls stock from your free zone warehouse, clears customs, and delivers to onshore buyers. You take on no new licence but share margin and lose direct control of the client relationship. This works well with free zones like IFZA, RAKEZ, and DMCC
What About Other Emirates?
That’s where a lot of owners go wrong. Resolution No. 11 of 2025, however, applies solely to Dubai. You cannot trade in another emirate under any of its licenses.
- In Abu Dhabi, ADDED offers dual licensing that allows free zone companies to establish offices on the mainland, often with incentives, such as a temporary office-space waiver for businesses exploring the market.
- In Sharjah, Ajman and Ras Al Khaimah the frameworks are less formal and still growing. If your free zone is in one of these Emirates, verify with your free zone authorities and the local economic department (DED) immediately.
If you deal in more than one emirate, you will have to satisfy the license criteria of each emirate. The Dubai agreement isn’t a national pass.
The Steps to Get Licensed in Dubai
The procedure often looks like this if you choose the branch or permit route through DET:
- Have a valid free zone trade license and get an advance permission (NOC) from your free zone authorities.
- You should reserve your business name and make sure that the type of work you do fits DET’s approved mainland groups.
- If your activity is regulated, get clearance from the regulator.
- Send your NOC, free zone licence, board decision, and business plan along with your DET application.
- Select your licensing type, onshore branch, branch-from-free-zone or temporary permit.
- Register for VAT if you cross the mandatory threshold.
- The resolution says that you have to keep separate financial records.
A lot of this is now done online via the Invest in Dubai website. Qualified companies with a Dubai Unified Licence can apply online. Generally speaking, you should allow three to six weeks.
Compliance Points You Cannot Afford to Overlook
Getting the licence is only half the job. These are the things that affect businesses the most, with taxes becoming the most prominent.
Activity alignment
What you can do on the mainland has to align with what’s allowed by your free zone permit. Mainland access only increases your reach, not the types of businesses you can run. This method does not allow you to discreetly hide in unrelated fields of business.
Corporate tax exposure (The trap most people underestimate.)
Under the Qualifying Free Zone Person (QFZP) regime, income from a free zone can stay at 0%. However, more than AED 375,000 in mainland profit is taxed at 9%. Keep your mainland and free zone finances completely separate, ideally in a separate onshore account. This way, only your mainland profit will be affected by the 9% rate. In 2026, the FTA will start actively enforcing the agreement and will be looking more closely at the QFZP. To protect yourself, keep clean, separate records.
VAT registration
Registration is compulsory if taxable turnover exceeds the compulsory AED 375,000 level. Free zone origin doesn’t save you.
Documentation
You will need to present your valid free zone trade license, incorporation paperwork, shareholder identity, NOC from your free zone authorities and board resolution in case of multiple shareholders.
Free Zone vs Mainland: The Real Trade-Off
There is no one winner. Free zones are still attractive for a majority of multinational, B2B or holding-oriented companies when the 0% qualifying rate can be achieved. In contrast, a mainland LLC may trade anywhere in the UAE, compete for government contracts, and lease premises in any emirate – and most operations on the mainland now allow 100% foreign ownership, with only strategic sectors restricted.
The greatest part about the 2026 changes is that you don’t have to select one or the other anymore. The right license might provide a Dubai free zone firm the best of both worlds – international perks and legal domestic reach.
Should Your Business Make the Move?
If you have been turning away from mainland customers or depending on informal arrangements, then this is one of the biggest regulatory changes the UAE has made in years. But it is not always suitable for everyone. The optimum structure relies on your sector, your development ambitions and how much income you anticipate from mainland vs overseas trading.
Final Words
So, are free zone companies allowed to trade in the UAE mainland in 2026? Yes, but only by using the proper legal channels, with the proper permissions, and clean, separate documents.
The 2026 rules are the biggest exemption the UAE has given to free zone companies in years. Now you can access mainland clients, government contracts and local relationships, all without sacrificing the benefits that made your free zone set up so appealing. The catch is structure; get the permission, keep your accounts separate and remain compliant.
At HA Group, we help free zone businesses make this change. We figure out what the best option is for you: a dual licence, a mainland branch, or a full move to a mainland LLC—and make sure all necessary DET approvals are met. We also make sure that your tax situation is protected throughout the process. Contact if you’re ready to grow onshore, and we’ll help you plan your way to the mainland.
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