Key takeaways
- A free zone company licensed in Dubai can legally operate on the Dubai mainland since Executive Council Resolution No. (11) of 2025, which was issued on 3 March 2025; before that, direct mainland trading by a free zone company was generally not allowed without a mainland licence.
- The Dubai Department of Economy and Tourism (DET) can issue three instruments: an in-Emirate branch licence, a branch licence operated from the free zone headquarters at AED 10,000 a year, and a temporary activity permit at AED 5,000 for up to six months (fees as of October 2026, per Article 12 of the Resolution).
- A Dubai free zone company's mainland branch is not a separate company: under the Resolution, the branch has no separate legal personality from its parent, so the parent carries the contracts and liabilities.
- Mainland branch income is a corporate tax issue as well as a licensing one: the FTA's free zone guide says income attributable to a Domestic Permanent Establishment is not Qualifying Income, so a free zone company's 0% rate is at risk if the mainland activity grows.
- The Resolution covers Dubai only; a free zone company that wants to trade in another emirate needs a licence from that emirate's authorities.
Can a free zone company open a branch on the mainland?
Yes, in Dubai. Since Executive Council Resolution No. (11) of 2025, a free zone establishment can apply to DET for a licence or permit to conduct activities in the Emirate outside its free zone, with the exception of financial establishments licensed in the Dubai International Financial Centre (DIFC).
Before the Resolution, a free zone company that wanted mainland revenue usually set up a separate mainland company or worked through a licensed partner. The UAE government portal still says free zone companies are considered outside the UAE mainland jurisdiction and that direct sales in the mainland are generally not permitted without the required mainland licences (u.ae, page updated 28 September 2026). The Resolution is the route that now makes a branch possible for Dubai free zone companies. The Dubai Media Office announced it on 17 March 2025, and the Resolution takes effect on publication in the Official Gazette; we couldn't verify the Gazette publication date, so don't rely on a specific start date.
What licence options does DET offer, and what do they cost?
DET can issue three instruments under Article 4 of the Resolution, and the fees below are the ones stated in the Resolution, as of October 2026.
| Instrument | What it allows | Validity | Fee |
|---|---|---|---|
| In-Emirate branch licence (Article 5) | A branch located in Dubai, outside the free zone | One year, renewable | Not stated in the Resolution |
| Free zone based branch licence (Article 6) | A branch operating on the mainland from the free zone headquarters | One year, renewable | AED 10,000 to issue or renew |
| Temporary activity permit (Article 7) | Specific listed activities for a limited period | Up to six months | AED 5,000 to issue or renew |
In October 2025 DET's licensing arm, the Dubai Business Registration and Licensing Corporation, launched the Free Zone Mainland Operating Permit: AED 5,000 for six months, renewable at the same fee, available to free zone companies holding a Dubai Unified Licence, with applications through the Invest in Dubai platform. That launch covered non-regulated activities first, with technology, consultancy, design, professional services and trading named, and regulated sectors planned for later.
Government fees aren't your full cost. Free zone approval fees, document attestation and any adviser fees sit on top, and those vary by free zone, so ask yours for a written quote.
How do I apply for a mainland branch or permit?
You apply to DET after your free zone approves, and you need your activity to appear on DET's list of permitted activities. The Resolution (Articles 5 to 7) sets the application steps in this order:
- Check that your licensed activity is on the list DET issues under Article 9, which specifies which activities need a branch licence and which can use a permit.
- Get approval from your free zone, which the Resolution calls the Licensing Authority, and from any government entity that regulates the activity.
- Prepare the documents: the memorandum of association, the trade licence, and the manager's passport and Emirates ID (Article 6 lists these for a free zone based branch).
- Submit the application to DET; for the six-month permit, the Dubai Media Office says applications go through the Invest in Dubai platform.
- Pay the fee and meet any conditions the DET Director General sets.
- Open separate books for the mainland activity from day one, because Article 3 requires financial records for activities outside the free zone to be kept separate from free zone records.
Staff registered on your free zone's portal can support the mainland activity and keep their free zone employment privileges (Article 8), so you don't have to hire a second team to start.
How is mainland branch income taxed?
Mainland branch income can cost a Qualifying Free Zone Person its 0% corporate tax rate on qualifying income, so the tax test matters as much as the licence. The Dubai Media Office's October 2025 announcement says revenue from mainland activities is subject to 9% corporate tax and that separate financial records meeting FTA requirements are required.
The FTA's Corporate Tax Guide for Free Zone Persons (CTGFZP1, May 2024) sets the rules:
| Point | Rule | Source in the guide |
|---|---|---|
| Domestic Permanent Establishment income | Not Qualifying Income | Section 5.2 |
| Rate on non-qualifying income | 9% | Section 3.3 |
| De minimis limit | Non-qualifying revenue must not exceed the lower of AED 5,000,000 or 5% of total revenue | Sections 3.2.8 and 4.4.1 |
| Failing the de minimis test | The company is not a Qualifying Free Zone Person for that period and the next four | Section 4.4 |
| Revenue from a Domestic Permanent Establishment | Excluded from the de minimis calculation | Sections 4.4 and 4.4.1 |
Whether your branch creates a Domestic Permanent Establishment depends on your facts, so get tax advice before you apply. Say a Dubai free zone consulting company bills AED 3m a year to free zone clients and plans AED 1m of mainland work through a branch (a hypothetical example). Total revenue is AED 4m, so the mainland share is 25%, well above the 5% limit; the mainland income is taxed at 9% either way, and the question is whether the rest of the company keeps its 0% status. Model that before you sign anything.
If you'd rather not track these dates by hand, the free UAE compliance calendar lists your company's tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
Can a free zone company open a mainland branch in other emirates?
Not under the Dubai Resolution: its Article 3 states that activities outside the Emirate need licences from the competent authorities there. A Dubai permit doesn't authorise trading in Abu Dhabi, Sharjah or anywhere else.
Abu Dhabi has its own arrangements. ADGM and the Abu Dhabi Department of Economic Development agreed a dual licensing regime in November 2017 for ADGM entities serving Abu Dhabi clients, run from a single office on Al Maryah Island, and Abu Dhabi launched a Unified Economic Licence on 6 June 2024 to link its mainland and free zones. We found no official source setting out a general free zone to mainland branch route in Sharjah, Ajman or Ras Al Khaimah, so confirm the position with the local economic department and your free zone before assuming one exists.
What if my free zone company already trades on the mainland?
If you already operate outside the free zone, Article 13 of the Resolution gave existing activities one year from the effective date to comply, and the DET Director General may extend that once for the same period. We couldn't verify an official date for that deadline because the Gazette publication date isn't in the sources we checked, so ask DET or your free zone where you stand today.
Don't wait for a notice. Operating outside your free zone without the right licence leaves you exposed under local legislation, because Article 10 applies the administrative penalties and measures in force; the Resolution sets no separate penalty table.
AED 10,000: annual fee to issue or renew a Dubai free zone company's branch licence operated from the free zone headquarters. Source: Executive Council Resolution No. (11) of 2025, Article 12, checked 09 October 2026.
What most guides don't tell you
The branch is the parent. Articles 5 and 6 say the branch has no separate legal personality, so a mainland contract is your free zone company's contract. If you want the mainland work ring-fenced from the free zone company, a separate mainland company is the other route, and it costs more to run.
The tax cliff is bigger than the licence fee. AED 10,000 is small beside the risk of losing Qualifying Free Zone Person status for five periods. Run the numbers on the lower of AED 5,000,000 or 5% of revenue before you apply, not after your first mainland invoices.
A free zone based branch isn't a mainland office. The Article 6 licence lets the branch operate from the free zone headquarters; the Article 5 licence is for a branch located in Dubai. If a mainland client or tender needs a local address, the first may not satisfy them, and the Resolution doesn't state the fee for the second.
The activity list decides everything. The list under Article 9 sets which activities can use a branch licence or a permit. Check your exact activity code with your free zone first, because DET's launch notes name technology, consultancy, design, professional services and trading, not every activity.
Frequently asked questions
Can a free zone company open a branch on the mainland without closing the free zone licence? In Dubai, yes: the Department of Economy and Tourism (DET) can issue a branch licence while the free zone licence stays in force, because the branch has no separate legal personality from its parent. Your free zone must approve the application first.
Can I move my free zone company to the mainland instead of opening a branch? That's a different route: you'd transfer or re-register the company rather than add a branch, and the free zone licence ends. Compare the two before you choose, because a branch keeps the free zone entity as the contracting party.
What is a dual licence in Dubai? A dual licence means one company holds a free zone licence and a second licence that lets it trade outside the free zone. In Dubai, the Resolution 11 branch licence operated from a free zone headquarters is the formal version of this, at AED 10,000 a year.
Can a free zone company in Dubai trade with mainland clients without any licence? Direct sales on the mainland are generally not permitted without the required mainland licences, according to the UAE government portal (u.ae), which also lists a licensed mainland partner as one alternative. The right route depends on your activity, so check it with your free zone before you invoice.
Do I need approval from authorities like KHDA or DHA for a mainland branch? Yes, if your activity is regulated: the Resolution requires approval from any government entity that regulates the activity, and the launch of the Dubai mainland operating permit covered non-regulated activities first. Education and healthcare activities therefore need their regulator's sign-off before DET will license them.
Which deadlines apply to your company?
A mainland branch adds licence renewals, separate bookkeeping and corporate tax filings to your calendar, and missing one costs more than the permit did. The free UAE compliance calendar lists your company's UAE tax and compliance deadlines, personalised from a few questions.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- Executive Council Resolution No. (11) of 2025, Dubai Legislation Portal
- Hamdan bin Mohammed issues Resolution to regulate free zone establishments, Dubai Media Office, 17 March 2025
- Dubai launches Free Zone Mainland Operating Permit, Dubai Media Office, 8 October 2025
- Corporate Tax Guide, Free Zone Persons (CTGFZP1), FTA, May 2024
- Running a business in a free zone, UAE government portal (u.ae)
- ADDED and ADGM dual-licensing regime, ADGM, 14 November 2017
- Abu Dhabi launches the unified economic licence, ADDED, 6 June 2024
Last checked: 09 October 2026
General information, not tax or legal advice for your specific situation.