Dubai Free Zone Businesses Can Now Expand into Mainland: A New Era of Growth and Opportunity

In a significant move that promises to open up new avenues for growth, Dubai has introduced a groundbreaking resolution allowing businesses operating in free zones to expand into the city’s mainland. This development marks a key milestone in Dubai’s ongoing efforts to enhance its economic landscape.

Background of the Resolution

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister, and Minister of Defence of the UAE, announced the new regulation, which permits free zone businesses—excluding financial institutions licensed under the Dubai International Financial Centre (DIFC)—to operate outside their designated zones. To do so, these businesses must obtain the necessary approvals from the Dubai Department of Economy and Tourism (DET).

This resolution is part of the broader Dubai Economic Agenda (D33), an ambitious plan aimed at doubling the city’s economy by 2033 and strengthening its position as one of the world’s top three economic hubs.

What Does This Mean for Businesses?

The new resolution is a game-changer for businesses in Dubai. Free zone companies, which were previously restricted to their designated zones, can now expand their operations into mainland Dubai. This expansion allows these businesses to tap into the mainland market, broadening their customer base and unlocking new growth opportunities.

Companies wishing to expand must apply for a DET-issued license, either to establish a branch in mainland Dubai or to obtain a specific permit for particular activities. These licenses will be issued for one year, with the option for renewal.

Moreover, this initiative is expected to stimulate innovation, create jobs, and promote economic activity. By facilitating businesses to operate across Dubai’s economic ecosystem, the regulation is designed to make it easier for companies to navigate the local market while contributing to the city’s overall economic growth.

Implementation and Compliance Guidelines

To ensure smooth implementation, the DET, in partnership with licensing authorities, will publish a list of permitted economic activities within six months. Additionally, existing businesses currently operating outside the free zones will have up to a year to comply with the new regulations, with a potential one-year extension if granted by DET.

It is important for companies to maintain separate financial records for their free zone and mainland operations, in line with federal and local regulations. This will ensure transparency and compliance across their business activities.

A Step Towards a More Business-Friendly Dubai

This resolution is a clear signal of Dubai’s continued commitment to fostering a business-friendly environment. By allowing businesses to operate across different sectors of the economy, the new regulation will not only support individual company growth but also contribute to the diversification and resilience of Dubai’s economy.

With the resolution now officially in effect following its publication in the Official Gazette, businesses across Dubai are poised to take advantage of this new regulatory framework and embark on a new chapter of growth and opportunity.

This new policy marks a bold step towards a more dynamic and interconnected business environment in Dubai. The increased flexibility for free zone businesses to operate outside their designated areas is expected to create significant economic benefits, supporting the long-term vision of Dubai as a leading global business hub.

• Source: GULF NEWS