Is Dual Licensing Allowed Between Mainland and Free Zones?

Dual licensing is one of the UAE’s most strategic business tools, and surprisingly, one of the least understood. Setting up a business in the UAE was a tough choice for determined people, because they didn’t know where to start. From the mainland, they could sell straight to customers in the UAE. Or they could go to a free zone, where they can own their entire business and get tax incentives. But to achieve both, it required setting up two different companies, which multiplied the labour and tripled the complexities.

In March 2025, the big regulatory reforms made dual licensing between mainland and free zones permissible. This is revolutionising the way smart businesses operate in the Emirates, enabling them to effectively serve mainland clients while still taking advantage of free-zone benefits.

The UAE has become one of the most business-friendly countries in the world, and today, there is only one issue on everyone’s mind. Can one company operate in both the mainland and a free zone?

Yes!! Dual licensing is allowed. In this guide, we explain what dual licensing is, who qualifies, how it works, the costs involved, and why it could be the smartest move you make in 2026.

What Does Dual Licensing Between Mainland and Free Zone Actually Mean?

The choice between mainland and free zones is usually difficult for entrepreneurs wishing to launch a business in the United Arab Emirates. Establishments on the mainland are great for businesses focused on the local market because they can trade anywhere in the UAE and interact directly with the government and local clientele.

Your original free zone licence remains unchanged. Your shareholders, structure, and free zone advantages remain unchanged. With dual licensing, you can now:

• Sign contracts with mainland customers.
• Open a physical office or branch in Mainland Dubai.
• UAE government contracts and bids
• Invoice local companies directly – no distributor.
• Hire and sponsor workers on the mainland

It’s the best of both worlds, and in 2026, it’s not a luxury. It’s a competitive advantage.

Mainland vs Free Zone in the UAE: What’s the Difference?

Most of the time, people who want to establish a business in the UAE can choose between the mainland and free zones. Mainland-based businesses are ideal for activities targeting the local market as they can trade anywhere in the UAE and communicate directly with the government and the local consumers. However, free zone companies offer 100% foreign ownership, tax benefits and a fast setup process, although they used to have certain restrictions on doing business on the mainland.

The Legal Foundation: Executive Council Resolution No. 11 of 2025

Dual licensing is not only a cool technique to avoid the law, but it’s also mandated by law.

The requirements for Dual licensing changed by Executive Council Resolution No. 11 of 2025 in March 2025. The decision clearly permits enterprises in the Dubai free zone to conduct business in the mainland via any of the three options allowed:

• A dual licence given by the Department of Economy and Tourism (DET)
• Mainland branch of a free zone entity
• Temporary operating permit for brief projects (validity up to six months)

The resolution also closed an earlier loophole. Free zone companies operating on the mainland without the necessary authorisation have until March 2026 to officially register their activities. That date has now passed, so conformity is no longer a choice. If you work on the mainland without an official permit, you will now be fined and punished.

If you’ve been operating in the grey zone, HA Group can help you get back on track swiftly and prevent expensive consequences.

Why Dual Licensing Matters More Than Ever in 2026?

The UAE business world has changed a lot, and 2026 is the best year to adopt dual licensing for a number of reasons:

100% Foreign Ownership for all businesses: Foreign investors can now fully control mainland companies across more than 1,000 distinct activities, most of which no longer require a local investor.

Corporate Tax Is a Game Changer: Today, corporate tax is 9%, and your earnings are directly impacted by the structure. Qualifying Free Zone Persons (QFZPs) continue to enjoy 0% on qualifying income, while tax on Mainland income above AED 375,000 will be  A well-thought-out dual licence makes the most of both. A well-designed dual license strikes the right balance.

Cost-effectiveness: Free zones are generally the preferred option for single proprietors, solopreneurs, and self-funded businesses since they are quick to set up and affordable.

Mainland Is Where the Money Lives: More than 80% of B2B and customer spending in the UAE takes place on the mainland.

Government Contracts Need DET Recognition: You can’t win without a dual licence. Most public tenders need a DET permit.

How Dual Licensing Actually Works?

Dual licensing binds two jurisdictions to one entity. Your free zone entity is the parent firm, and the mainland license is the branch or extension. So you may trade within the UAE without losing your free zone privileges. Dual licensing gives the most flexibility for developing enterprises. Dual licensing is quite prevalent in Dubai, Sharjah and Abu Dhabi.

Step-by-Step Process to Get a Dual License

Here is a clear plan for how the process will progress in 2026:

Confirm Eligibility

Not all free zones allow dual licenses, and not all business activities are eligible. For cross-jurisdictional actions, both your free zone authority and the DET must agree to the activity. A lot of applications halt at this stage because the actions don’t line up.

Obtain a No Objection Certificate (NOC)

You will need to obtain an NOC from your free zone authorities, verifying that your business is in excellent condition and permitting the mainland expansion.

Prepare Documentation

Typical papers necessary are:

• A copy of your current free zone trade licence
• Memorandum of Association (MOA)
• Board Resolution for Expansion in the Mainland
• Copy of the passports of shareholders and management.
• A mainland tenancy contract (Ejari):Required
• Required clearances from relevant sectors (e.g. DHA, RTA, KHDA)

Submit the Application to DET

The free zone communicates with the DET on your behalf. The DET evaluates the application, and confirms the activity meets the criteria and grants the dual licence when accepted.

Pay Fees and Get Your License

You pay government fees, branch licence prices and any sector-specific fees and get your DET mainland licence – tied to your current free zone organisation.

Implement and Maintain Compliance

Establish your mainland office, get personnel visas, and establish mainland bank accounts, if required.

Remember: You will need separate financial records for your mainland and free zone activities to comply with corporate tax and audit rules.

Estimated Costs in 2026

Prices vary based on the activity and free zone, but here’s a good idea of how much you should spend:

• Branch license: starting around AED 10,000 per year
• Temporary permit: starting around AED 5,000 (up to 6 months)
• Tenancy and Ejari: variable, depending on location
• PRO services, visas, and admin fees: AED 3,000 – 8,000 annually

A dual licence costs 10–20% more than a single free zone setup for most service-based businesses.

Get cost estimates specific to your business? HA Group provides free dual licence consultations; no commitments, just clear answers. (Contact us Today) and let’s make the most clever, most affordable way in the UAE mainland.

FAQs

Do I need a local sponsor to get a dual licence?

No. The resolution eliminates the need for a local sponsor. In both jurisdictions, your ownership is 100% foreign.

Which Dubai free zones allow dual licensing?

Dual licensing is also possible in crucial zones such DMCC, JAFZA, DAFZA, DWTC, Meydan Free Zone, Dubai Design District and Dubai Internet City, but the restrictions vary. Check with HA Group before you presume you are qualified.

How long does the process take?

A dual license is available to businesses that qualify, provided full paperwork is submitted, and may be issued within 3-5 working days. More complex industries may need more time owing to additional regulatory clearances.

What happens if you are currently operating on the mainland without a legal licence?

The March 2026 compliance deadline has passed. To avoid penalties, you must regulate ASAP. Your application can be expedited by HA Group.

Final Thoughts

So, is dual licensing possible between the mainland and the free zone? Absolutely. And it’s changing how firms scale in the UAE. This is a hybrid model that offers the freedom of a free zone, access to the mainland market, reduced expenses and 100% ownership. For ambitious businesses, it is no longer a choice – it is a competitive advantage.

At HA Group, we do not purchase licenses, we build growth plans. Our specialists manage eligibility evaluation, activity alignment, government clearances, paperwork and compliance – making your entrance into the UAE market smooth.

Ready to open both jurisdictions with one company? Contact HA Group now for a free consultation.

Recommended Articles:

What is E-Invoicing in UAE and When Does It Become Mandatory in 2026?

How Long Does It Take to Set Up a UAE Mainland LLC?

How to Read Balance Sheets for UAE Companies? (Without Feeling Lost in the Numbers)

Dubai Business Environment International Investor – Guide Book to Opportunities and Insights!

How to Change Company Shareholders in the UAE: A Simple Guideanchor: Business Setup