Dubai has issued a new resolution regulating the operations of free zone companies aimed at making it easier for them to expand operations within the emirate.
The resolution was issued by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence, in his role as chairman of the Executive Council of Dubai on Monday.
It states that any company or institution licensed by a free zone relevant authority may operate outside the free zone and within Dubai, as long as it obtains the necessary licenses or permits from the Dubai Department of Economy and Tourism (DET). Financial institutions with operating licenses within the Dubai International Financial Center are exempt from the resolution.
Establishments must observe the applicable federal and local regulations related to their activities and maintain separate financial records for their operations conducted outside the free zone, separate from those within the free zone, the Dubai Media Office said on Monday.
Also, if the companies wish to operate outside Dubai, they must secure the required licences and permits from the relevant authorities, it said.
“This latest resolution marks a significant advancement in enhancing the business landscape, by enabling free zone businesses to effortlessly expand their operations beyond the free zones into mainland Dubai,” it added.
According to the resolution, the DET is authorised to issue a licence to a company to establish a branch within the emirate or a licence for a branch with its headquarters in the free zone. These licences are valid for one year and can be renewed, the statement said. Permits may also be issued for specific activities within the emirate.
The DET, in co-ordination with the licensing authority, is mandated to provide a list of economic activities that corporations can do in Dubai within six months.
The resolution also outlines the requirements for obtaining a licence, the procedures for issuing activity permits, and the conditions for employing the company’s workforce.
Any company licensed to operate in Dubai under this resolution is subject to scrutiny, the statement noted.
The initiative is in line with the city’s ambitious D33 agenda, under which it aims to double the size of its economy to Dh32 trillion ($8.71 trillion) over the next decade and establish the emirate among the top three global cities. The idea wants to help 30 private companies become “unicorns,” or start-ups valued more than $1 billion.
By 2033, the D33 agenda also seeks to establish Dubai as the world’s leading digital economy, the most rapidly expanding and alluring global commercial hub, and a center for sustainability and economic diversification.
Dubai’s economy expanded 3.1% in the first nine months of last year, reaching Dh339.4 billion. This increase was mostly fueled by advancements in a number of industries, including retail and wholesale commerce, transportation and storage, and banking and insurance operations.
Additionally, for the fourth year in a row, Dubai was named the world’s top location for greenfield FDI projects last year.
The Dubai Media Office said this month that 1,117 greenfield FDI projects totaling over Dh52.3 billion were drawn to Dubai last year, a 33.2% increase from 2023, according to statistics from the Financial Times’ fDi Markets.
Both in terms of project counts and greenfield FDI value, this was the greatest the emirate had ever achieved in a single year since 2020.
“The new resolution is a significant step forward in making business operations more seamless in Dubai,” said Paul Bryson, managing director of Virtuzone, which helps in company formation.
“While companies have previously been able to establish mainland branches from free zones, restrictions on certain commercial activities, particularly those involving physical goods trading, have posed challenges.
“The natural next step would be to enable corporate migration between the various jurisdictions within the UAE, further enhancing business flexibility and economic growth,” he added.
