Introduction to the Free Zone Mainland Operating Permit
Dubai has introduced the Free Zone Mainland Operating Permit to enable free zone companies to operate in mainland Dubai through a structured permit system. This move facilitates cross-border operations, opens up low-cost and low-risk opportunities for companies to participate in domestic trade and secure government contracts, and promotes the growth of both small businesses and multinational corporations.
Key Features of the Permit
In its initial phase, the new authorization will cover unregulated activities including technology, consulting, design, professional services, and trading, with plans to expand it to regulated sectors. The mainland free zone operating permit is valid for six months and costs Dh5,000. It can be renewed every six months for the same fee.
Taxation and Regulations
Free zone companies operating on the mainland are subject to a corporate income tax of 9% on related revenues and are required to maintain separate financial records in accordance with Federal Tax Authority (FTA) requirements to promote transparency and regulatory harmony. In addition, companies availing of this authorization can utilize their existing staff in mainland operations without the need to hire new employees.
Benefits and Impact
By linking free zone and mainland operations, the initiative is expected to increase cross-border activity in Dubai by 15 to 20 percent in the first year, benefiting over 10,000 active free zone firms and enabling companies to expand into local trade, integrate into domestic supply chains, and gain access to government tenders and contracts worth billions per year – opportunities previously reserved for mainland licensed companies.
Application Process
Eligible free zone companies with a Dubai Unified License (DUL) can apply digitally via the Invest in Dubai (IID) platform. The process is entirely online, ensuring efficiency for SMEs, start-ups, and incorporation agents seeking access to the mainland. Further details can be found on the Invest in Dubai website.
Conclusion
The introduction of the Free Zone Mainland Operating Permit solidifies Dubai’s position as a benchmark for regulatory innovation and reinforces its commitment to progressive, business-friendly policies that promote job creation and entrepreneurship, and attract investors worldwide.
