Dubai is evolving into a global business hub. Under the new amendment from the Dubai government, companies operating in Free Zones can expand to the mainland. This article highlights how a Free Zone company can benefit from expanding its presence to the mainland.
Dubai Free Zone companies now have more flexibility to operate their business outside their respective Free Zone where the company is located. The new amendment from the Dubai Government indicates that Free Zone companies can function from anywhere within Dubai. All they have to do is get the necessary permit from the Dubai Department of Economy and Tourism.
Expand Business of a Dubai Free Zone Company to Mainland
So, this gives more flexibility to a Free Zone company in terms of expanding its business operations beyond the Free Zone. The company must adhere to the business regulations of both the Free zone and the mainland. Also, keep separate financial records for the business operations in the free zone and mainland.
The amendment acts as a significant factor in enhancing the business landscape of Dubai as a whole. Companies in the Free Zone can open a branch or representative office in the mainland retaining the Free Zone as the headquarters.
The branch office license is renewable yearly. Before only Free zone companies with a few selected business activities could get approval to start as a branch company in the mainland. Now, there is a long list of business activities that are eligible for starting as a branch office.
Dubai – A Global Business Hub
The new move is in line with the broader growth strategies of the Dubai Government. The D33 Agenda aims to double the size of Dubai’s economy over the next decade. Also, it aims to position Dubai as the top 3 global cities. So, triggering more economic activities and transforming Dubai’s digital economy are the major goals of the D33 agenda.
Dubai is one of the fastest-growing cities with several greenfield investments. The city is transforming into a global business centre and a hub for sustainability and economic diversification.
Foreign investors prefer Dubai to start a company due to several reasons. The top ones are the low taxation rates, absence of personal income tax, easy company formation process, reduced paperwork, top-class facilities, a growing network of banks and business support services, and more.
Starting a Branch of a Free Zone Company
A Free Zone company operating in any of the Dubai-based Free Zones could open a branch of their company on the mainland. However, only certain types of business activities were operating as a branch office in the mainland. For example, professional services such as accounting, IT Consulting, Financial Trading, etc., from Free Zone, could start a branch and operate on the mainland.
As per the new update from Dubai Government, there is a long list of eligible business activities. The list will be available shortly from the Dubai Economy. So, now a trading company based in Free Zone can operate as a branch in the mainland. Thus, providing immense opportunities for business expansion.
How Does a Free Zone Company Operate?
A Free Zone Company in a Dubai-based Free Zone operates within the scope of the registered business activities. They can operate as per the listed business activities in the Trade License.
The company can operate business in those selected business activities only. Also, for service companies, there is no limitation in delivering service outside of the Free Zone. However, for trading companies, they cannot directly sell to mainland customers. They must appoint a Dubai Economy-approved distributor to sell the items.
As per the update, now many business activities will be available to register as a branch company. By doing so, they can expand to the mainland start operating in the mainland and sell directly to the customers.
You can read here – How to register a branch or subsidiary company in UAE
A permit from the Department of Economy and Tourism (DET) is required for setting up the Free Zone Company branch on the mainland. The investor must submit the parent company documents and board resolution stating approval to register a branch in the mainland of Dubai.
How Business Consultants Will Assist?
It is advisable to register a branch office in Dubai Mainland with the assistance of a Business Consultants. They will advise the right steps in setting up a branch office in Dubai Mainland. For investors, it is the best opportunity to expand their business to the mainland seamlessly.
The business consultants will prepare the documents, get the necessary approvals, and submit the shareholder details and parent company details to the Dubai Economy. The dedicated PRO agents will keep track of the progress and facilitate the quicker issuance of the branch license for the investors.
For any queries regarding expanding your free zone business to the mainland, connect with our expert team right away!
