Introduction
For years, Dubai free zone businesses faced the same wall the moment they wanted to sell directly to mainland customers, bid on a government contract, or open a physical location outside their zone: the only real option was setting up an entirely separate mainland company. A second licence, a second office, double the compliance. Executive Council Resolution No. 11 of 2025 changes that.
What the Resolution Actually Does
Issued by Dubai’s Executive Council, the resolution formalises a structured licensing framework that allows free zone entities — with the exception of those licensed in the Dubai International Financial Centre (DIFC) — to legally conduct business activities in mainland Dubai, without incorporating a new onshore company.
It introduces three distinct routes, each suited to a different way of doing business outside the free zone:
Branch licence: Establish a fully onshore branch of your free zone company, operating under standard mainland branch requirements
Dual licence: Operate on the mainland while your registered office and headquarters remain inside the free zone — combining free zone status with mainland market access
Temporary permit: Carry out specific mainland activities for a short, defined period, valid for up to six months, without committing to a full branch structure
Branch and dual licences run for one year and are renewable annually, giving businesses a stable, ongoing structure rather than a one-off workaround.
Branch
Dual
Free zone company formation has always been attractive for its 100% foreign ownership, streamlined setup, and favourable tax treatment on qualifying income. The trade-off was always the geographic limitation — a free zone licence, on its own, doesn’t authorise mainland trading.
This resolution directly addresses that gap. Businesses can now reach mainland customers, participate in government tenders, and expand their physical footprint across Dubai, while keeping the free zone structure — and its ownership and cost advantages — intact.
For sectors like trading, consulting, e-commerce, and professional services, where mainland customer access has often been the deciding factor between free zone and mainland setup, this materially changes the calculus.
The Tax Detail Worth Understanding Before You Apply
Expanding onto the mainland isn’t tax-neutral. Revenue generated through mainland activity under a branch or dual licence is generally subject to the standard 9% Corporate Tax rate, while free zone qualifying income can continue to benefit from the 0% rate available to Qualifying Free Zone Persons — but only if the business maintains separate, clearly segregated financial records for each income stream and stays within applicable thresholds.
Get the bookkeeping structure wrong from day one, and it can jeopardise the 0% treatment on income that would otherwise qualify. This is very much a “structure it properly before you start invoicing” situation, not a “fix it at year-end” one.
Structure Your Mainland Expansion Correctly with MNK Group
Getting mainland access without giving up free zone benefits is a genuine opportunity — but only if the licensing route, the activity approval, and the accounting separation are all set up correctly from the start. MNK Group’s business setup consultants can assess whether a branch licence, dual licence, or temporary permit fits your business, and handle the application and structuring process end to end.
Speak to MNK Group about expanding your free zone business onto the Dubai mainland.
