The UAE’s business landscape is evolving fast — and one of the biggest shifts in 2025 is that free zone companies can now legally operate in the mainland.
This update is part of a wider effort by the UAE to make business easier and more flexible. At Safari Star, we’ve been following these changes closely and helping businesses understand what they mean in real terms.
What’s New for Free Zone Companies in 2025?
For years, free zones were designed for global trade. They offered 100% foreign ownership, tax benefits, and quick setup options. The catch?
Companies couldn’t sell or operate directly in the mainland without a local distributor or separate licence.
That’s now different.
New 2025 reforms across Dubai, Abu Dhabi, and other emirates have opened the door for free zone businesses to:
- Work directly with mainland clients.
- Deliver services inside the UAE.
- Bid for local contracts and projects.
It’s a huge step that allows companies to grow faster and reach more customers without complicated setups.
How the New UAE Free Zone–Mainland System Works
Dubai introduced new rules under Resolution No. 11 of 2025 that let free zone companies operate onshore through:
Businesses can now choose from flexible licensing routes depending on their goals:
- Branch licences — open a small mainland office.
- Remote permits — work from your existing free zone HQ.
- Temporary permits — test the market for up to six months.
Beyond Dubai, other emirates are following suit.
Abu Dhabi and Ras Al Khaimah have similar systems, while Sharjah free zones like SHAMS and Hamriyah are offering flexible expansion options too.
These options mean business owners can now test mainland opportunities without losing their free zone benefits.
Why This Change Matters for UAE Business Owners
The new system makes it easier to:
✅ Reach more customers – You can now sell and deliver directly within the UAE.
✅ Save time and money – No need to set up a second company.
✅ Stay compliant – The rules are now clear and consistent across emirates.
✅ Keep your tax benefits – Qualifying free zone income remains at 0%, while mainland profits are taxed at 9%.
In short: you get the best of both worlds — flexibility and local access.
Important Compliance Steps Before Expanding to the Mainland
Before starting mainland operations, companies must:
- Get permission (a No Objection Certificate) from their free zone.
- Apply for the right licence or permit with the local economic department.
- Keep separate accounts for mainland income.
- Register for VAT if your annual turnover is above AED 375,000.
Some industries like banking, healthcare, and telecoms still require special approvals, so always double-check before expanding.
Safari Star’s Take on the New UAE Business Reforms
Safari Star’s business analysts see these reforms as some of the most impactful changes in the UAE’s business ecosystem in recent years.
They’re breaking down barriers, attracting new investors, and helping existing businesses grow without red tape.
Our Business Insights Team regularly analyses how free zone and mainland integration is shaping the UAE’s economy — and we share that knowledge to help entrepreneurs make smart, confident decisions.
👉 Visit SafariStar.com to explore our latest insights on business reforms, licensing options, and market trends across the UAE.
Quick Takeaway
The UAE is building a more open and connected business environment. If you already have a free zone company, 2025 could be the perfect year to explore the mainland market — legally, easily, and with full transparency.
FAQs
- Can free zone companies sell to mainland clients now?
Yes! They can work with mainland customers using branch licences or temporary permits. - Do they lose their tax advantages?
No. As long as you keep mainland income separate, free zone tax benefits remain. - Do employees need new visas?
Usually not. Free zone staff can often work on mainland projects under existing visas. - Are all industries allowed?
Most are, but banking, insurance, and healthcare still need extra approvals. - How can Safari Star help?
Safari Star provides easy-to-understand insights and updates on UAE business reforms so you can plan and expand wisely.