In March 2025, an important economic policy issued by the Dubai government is quietly reshaping the investment landscape in the Middle East. According to Resolution No. 11 (2025) recently promulgated by the Dubai Executive Council, under specific conditions, free - zone enterprises in Dubai can be approved to legally conduct business in the Dubai mainland area (that is, outside the free zone). This move breaks the long - standing "barrier" between the free zone and the mainland market, providing unprecedented flexibility and opportunities for foreign - funded enterprises to layout in the Middle East market.
As a professional consulting institution serving Chinese enterprises in "going global", HDMG Group immediately organized a research team to analyze the policy provisions. Combining with its rich experience in free - zone establishment, corporate structure construction, tax planning, and compliant operation in the UAE, it provides targeted suggestions for clients to help them steadily enter the Dubai local market.
This policy adjustment is not an isolated policy but an important part of the Dubai Economic Agenda D33. According to this agenda, the Dubai government plans to double the local economic scale within the next decade and make Dubai one of the top three economic cities in the world. The core of this ambitious goal is to improve business convenience, break market segmentation, and activate the outward vitality of free - zone enterprises.
HDMG Group has observed that against the backdrop of the overall transformation in the Middle East, Dubai is trying to shift from a "port - based economy" to a "regional headquarters - type hub", attracting international enterprises with global supply chain and management capabilities to land and conduct comprehensive operations.
According to Resolution No. 11, free - zone enterprises can apply to the Department of Economy and Tourism (DET) in Dubai for three types of licenses:
Branch License for Free - Zone Enterprises
This license allows free - zone enterprises to set up branches in the Dubai mainland to carry out physical business activities while maintaining the original headquarters structure unchanged. This mechanism provides a stable and sustainable business path for enterprises hoping to expand their local operations.
Operating Permit without Branch
Free - zone enterprises can operate in the mainland area while their headquarters are located in the free zone. This is suitable for market - testing, flexible bidding, and service - type companies.
Temporary Permit
This permit allows enterprises to temporarily enter the mainland market for business activities of no more than 6 months in specific projects, exhibitions, service contracts, and other scenarios. It is suitable for initial market exploration or phased tasks.
In addition, the DET will jointly announce a list of approved business activities with each free - zone authority to ensure market supervision and industry coordination.
HDMG Group has noticed that although the policy is open, the application process and subsequent compliance requirements are not simple. Enterprises must pay attention to the following key points:
Validity of the Original License
Enterprises must have a valid business license registered in the free zone, and the business type must meet the expandable fields specified by the DET.
Prior Consent of the Regulatory Authority
Enterprises must obtain written approval from the free - zone authority to which they belong. Some free zones, such as JAFZA or DMCC, may conduct assessments based on industries, taxes, or employee composition.
Independent Accounting and Audit Obligations
When enterprises conduct business in the free zone and on the mainland, they need to keep independent accounts and may face issues such as dual audits, different financial reporting systems, and determination of corporate income tax attribution.
Limited Duration and Renewal Mechanism
The branch license needs to be renewed annually, and the temporary permit is valid for a maximum of 6 months and cannot be applied for more than two consecutive times to ensure that the system is not circumvented.
For Chinese enterprises that have already established companies in Dubai's free zones, this new policy means that they can expand the local customer and government procurement markets without completely changing their corporate structures, thereby increasing their sales and service coverage.
For example, a Chinese communication equipment company originally had a procurement - type subsidiary in Dubai's DMCC free zone and could not participate in Dubai municipal project tenders for a long time. Now, by applying for an operating permit without a branch, it can directly participate in local government contracts, achieving a significant increase in sales.
For manufacturing or service - type enterprises that have not yet entered the UAE, this policy also provides more options for corporate structure design. For example, they can first set up a free - zone headquarters to enjoy tax benefits and then carry out mainland business activities as needed, effectively avoiding tax uncertainty.
HDMG Group suggests that enterprises carefully choose the most suitable entry mode according to their business needs and operation structures. Our suggestions are as follows:
Evaluate the Sustainability of the Free - Zone Structure
For clients who have already established in the free zone, HDMG Group can assist in evaluating whether it is suitable to apply for mainland business licenses and conduct financial and tax simulation analyses.
Fully Assist in License Applications
This includes preparing the DET registration documents required for the application, communicating with the free - zone authority, selecting the business scope, and setting employee - related policies.
Develop an Independent Financial and Compliance Structure
Assist enterprises in establishing independent accounts for free - zone and mainland businesses, designing tax filing processes, and coordinating with audit institutions for compliance preparation.
Customize a Localization Expansion Strategy
According to the characteristics of different industries, help clients find suitable business partners, bidding platforms, and government - connection channels to improve the success rate of market expansion in the Middle East region.
The introduction of the mainland operation license system for Dubai free - zone enterprises is a strong signal of the continuously increasing openness of the Middle East market. For Chinese enterprises at a crucial stage of "going global", this is not only a favorable policy but also poses higher requirements for cross - border structure design and compliant operation capabilities.
As a cross - border consulting institution deeply rooted in the Middle East market for many years, HDMG Group is always committed to providing stable, legal, and flexible overseas investment and operation solutions for clients. Against the background of the institutional innovation in Dubai, an important hub market, we are willing to provide full - process strategic support for Chinese enterprises to help them land in the Middle East market in compliance, expand and grow, and gain the initiative.
