Free Zone Companies Trading on Dubai Mainland: The Operating Permit Explained

For years, the standard answer to "can my free zone company work with mainland clients in Dubai?" was "only with a separate mainland licence or a distributor". That has changed. The free zone mainland operating permit in Dubai, launched by the Department of Economy and Tourism (DET) on 8 October 2025, lets eligible free zone companies carry out certain activities on the Dubai mainland without setting up a new company.

This guide explains who can apply, what the permit costs, how corporate tax applies to the mainland revenue, and when another route may still suit you better.

As of 18 October 2026, based on official Dubai Government announcements.

The legal background

The permit sits on Dubai Executive Council Resolution No. 11 of 2025, which regulates free zone companies operating outside their zones in the Emirate of Dubai. Its issue was announced by the Dubai Media Office on 17 March 2025. DET then launched the practical mechanism, the Free Zone Mainland Operating Permit, in October 2025.

According to DET, more than 10,000 free zone companies are able to use it.

How the free zone mainland operating permit in Dubai works

The key terms published by DET and the Dubai Media Office are:

The Dubai Unified Licence requirement

The Dubai Unified Licence was launched by DET on 11 December 2023. It gives each business in Dubai, whether mainland or free zone, a single digital identity and QR code. Holding a DUL is a precondition for the permit, so the first practical step for many free zone companies is to confirm with their free zone authority that their DUL is active and their details are correct.

Which activities qualify

Phase 1 is limited to non-regulated activities. If your business needs approval from a sector regulator (for example, in financial services, healthcare or education), the permit is not yet the right tool. Even within non-regulated activities, check that the mainland work matches the activities already on your free zone licence.

Corporate tax: the part most businesses underestimate

The official announcement is clear that mainland revenue earned under the permit is subject to 9% corporate tax and that separate books must be kept to FTA requirements. What that means in practice depends on your current tax position.

If your company is a Qualifying Free Zone Person

Many free zone companies rely on Qualifying Free Zone Person (QFZP) status, which gives a 0% rate on Qualifying Income. Under the FTA's Free Zone Persons guide, a QFZP must meet several conditions, including a de minimis test: non-qualifying revenue must not exceed the lower of 5% of total revenue or AED 5 million.

Revenue from mainland customers is generally not Qualifying Income unless it falls within a specific qualifying category. So, before applying for the permit, a QFZP should model:

• expected mainland revenue against the de minimis limit;
• whether that revenue is taxed at 9% while the rest stays at 0%;
• the risk of losing QFZP status, which under the guide lasts for the tax period of failure and the following four periods.

A QFZP also has to prepare audited financial statements, so the separate tracking of mainland income needs to be robust enough for the auditor.

The FTA published a new public clarification, TAXP010 "Free Zones and Designated Zones for Tax Purposes", on 2 October 2026. Anyone planning mainland activity should read it alongside the guide.

If your company is not a QFZP

If you already pay 9% on taxable income above AED 375,000, the permit may change little in tax terms. You still need clear records separating mainland and free zone activity, as required in the announcement.

Comparing your options

The permit is one of several ways to serve mainland customers. Each has trade-offs.

Law firms report that amendments to the Commercial Companies Law from 2026 also make it easier for free zone companies to open onshore branches with the approval of their licensing authority. Because the details vary by free zone and activity, confirm the current position with your licensing authority and DET before choosing.

A practical step-by-step plan

1. Confirm eligibility. Check your licence activities, your DUL status and whether your activity is in the non-regulated list.
2. Model the tax impact. Forecast mainland revenue for the next 12 months and test it against your QFZP position and de minimis limit.
3. Set up separate accounting. Create cost centres, revenue codes and invoicing rules so mainland income is clearly separated.
4. Apply through Invest in Dubai. Prepare your licence documents and company details.
5. Diary the renewal. The permit is valid for 6 months, so build renewal into your compliance calendar.
6. Review after two cycles. If mainland revenue grows, a mainland branch or company may become more cost-effective and tax-efficient.

Common mistakes to avoid

• Assuming the permit covers all licence activities; phase 1 is limited.
• Forgetting that mainland revenue may count towards the QFZP de minimis limit.
• Mixing mainland and free zone invoices in a single revenue line.
• Missing the 6-month renewal.
• Using the permit for a regulated activity before regulated sectors are added.

Talk to GULF CONSULT

GULF CONSULT helps free zone companies decide whether the permit, a branch or a mainland company is the right route, and models the corporate tax impact before you commit. Book a free 30-minute consultation: email [email protected], call +971 58 600 4833 or message us on WhatsApp.