Dubai has always been at the forefront of innovation and economic growth, and its latest regulatory update is no exception. A new resolution has been introduced to make it easier for free zone companies to expand their operations within the emirate, opening up fresh opportunities for business owners and investors.

What’s Changing?

The resolution, issued by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Deputy Prime Minister, and Minister of Defence, allows free zone businesses to operate outside their designated zones, provided they obtain the necessary permits from the Dubai Department of Economy and Tourism (DET). However, financial institutions operating within the Dubai International Financial Centre (DIFC) remain exempt from these changes.

This move is a significant step forward in making Dubai’s business environment more dynamic, eliminating barriers that previously restricted companies from fully tapping into the city’s economic potential.

Key Takeaways from the Resolution

• Free Zone Companies Can Now Expand into Mainland Dubai – Businesses with free zone licenses can now operate outside their zones as long as they secure the required DET permits.
• Compliance is Crucial – Companies must follow all federal and local laws and maintain separate financial records for activities conducted outside their free zone jurisdiction.
• New Licensing System – The DET will issue one-year renewable licenses for companies looking to establish branches in mainland Dubai.
• Specific Activity Permits – Businesses can apply for permits to conduct particular activities within Dubai under this framework.
• Six-Month Timeline for Economic Activity List – The DET, in coordination with relevant licensing authorities, will publish a list of permitted business activities within six months.

Why This Matters for Businesses

For years, companies operating in Dubai’s free zones have faced challenges when trying to expand beyond their designated areas, particularly those dealing with physical goods. The new resolution removes these hurdles, making business expansion smoother and more accessible.

Paul Bryson, Managing Director of Virtuzone, a company formation specialist, called this “a significant step toward simplifying business operations in Dubai.” He further highlighted that while companies could previously set up mainland branches, restrictions on certain activities made expansion difficult.

Aligning with Dubai’s D33 Agenda

This regulatory update is part of Dubai’s ambitious D33 agenda, which aims to:

• Double the size of Dubai’s economy to Dh32 trillion ($8.71 trillion) within the next decade
• Position Dubai among the world’s top three global cities
• Support the growth of 30 private companies into unicorns (start-ups valued at over $1 billion)
• Establish Dubai as the leading global digital economy
• Strengthen sustainability and economic diversification

With Dubai’s economy growing by 3.1% in the first nine months of last year—driven by retail, trade, transportation, and finance—this resolution adds further momentum to the city’s economic expansion.

Dubai’s Continued Growth as a Business Hub

Dubai’s pro-business approach continues to attract global investors. In 2024, the city was named the world’s top destination for greenfield foreign direct investment (FDI) projects for the fourth consecutive year. The emirate recorded 1,117 new FDI projects worth over Dh52.3 billion, marking a 33.2% increase from 2023.

With this new resolution in place, Dubai is making it even easier for businesses to grow, innovate, and thrive. Whether you’re an entrepreneur looking to expand your free zone business or an investor considering Dubai as your next venture hub, these changes signal an exciting new chapter for the emirate’s business landscape.

What’s Next?

The next logical step could be corporate migration between different UAE jurisdictions, allowing even greater business flexibility. For now, this resolution is a big win for companies looking to expand beyond their free zone boundaries.

Final Thoughts

Dubai’s latest regulations make it clear: the city is committed to fostering a more flexible, business-friendly environment. If you’re considering setting up or expanding a business in Dubai, now is the perfect time to explore the opportunities this resolution brings.