Can Freezone Company Do Business in Mainland UAE? Everything You Need to Know

The UAE continues to attract entrepreneurs from around the world, offering business-friendly policies, access to global markets, and an innovation-driven economy. One popular business setup option is operating within a Free Zone, which offers benefits like 100% foreign ownership and tax exemptions.

However, a common question remains:

Can Freezone company do business in mainland UAE?

In this guide, we’ll explain how can Freezone company do business in mainland UAE legally, and discuss the legal structures involved, and how Alex Zone can help you expand your business successfully across two areas.

Can Freezone Company Do Business in Mainland?

Yes, a Freezone company can do business in the mainland, but under specific circumstances and conditions and with the right legal setup.

Permitted Options:

1. Through a Local Distributor or Commercial Agent:

The freezone company appoints a UAE-licensed mainland agent or distributor to sell its products/services.

For example, a Freezone-based software development company can partner with a local entity to serve mainland clients or open a branch under mainland regulation.

2. Opening a Branch in the Mainland:

For Freezone companies seeking to scale, establishing a branch in the mainland enables legal operations in Dubai and beyond, as It ensures access to local clients while remaining part of the original Freezone structure.

3. Partnering with a Mainland Company

You can collaborate with an existing mainland company to offer services or distribute goods.

4. Selling to Government Entities:

Some government tenders may allow freezone companies to participate directly or through registration in approved vendor lists.

5. Ownership and Sponsorship (For Regulated Sectors):

Industries like real estate, healthcare, construction, and education often require:

• A UAE national sponsor (for LLC structures)

• Adjusted ownership models to comply with mainland laws

• A physical office space within the mainland jurisdiction

This is especially critical when planning a business setup in mainland Dubai or other emirates, as regulatory approvals differ by industry.

Remember: A freezone company cannot trade directly with mainland clients (retail, services, or B2C) without proper licensing or partnerships as outlined above.

Rules and Options for Expanding from Freezone to Mainland

Freezone companies looking to expand into the UAE mainland must understand and comply with key legal and regulatory requirements. Below are the main considerations:

Be sure to consult the latest Dubai mainland activity list for clarity.

Business Types Suited for Expansion

Industries that commonly operate across both Freezone and Mainland include:

• Import/export
• Retail and distribution
• Management consultancy
• Software and technology services
• Marketing and media services

How Free Zone Companies Can Legally Trade in the UAE Mainland?

Freezone companies are allowed to trade in the UAE mainland legally through:

1. Acquiring A DED License, which gives the permission of operating outside the Free zone.
2. Maintaining an on-ground presence in Mainland (office or commercial space) to enable direct business operations.
3. Forming Agreements with Local Entities (Local distributors or agents).
4. Complying with all applicable UAE commercial regulations, Making sure they follow the laws of the land, including labor, tax, and business regulations.

Read more about: what is difference between mainland and freezone UAE?

How Alex Zone Can Help You Expand into the Mainland?

Expanding your Freezone company into the mainland can be complex, but not with Alex Zone on your side. We simplify the process with a full range of business setup services in Dubai, UAE, including:

• Mainland license acquisition
• Business setup in dubai UAE
• Legal structure consultation
• Local sponsorship arrangement
• Regulatory approvals and documentation
• Office space and PRO services

With Alex Zone, your transition from Freezone to mainland is much easier, compliant, and hassle-free.

Conclusion

So, can Freezone company do business in mainland UAE?

The response is absolutely, with obtaining the necessary licenses, making strategic business alliances, and obeying the local regulations

The UAE’s evolving regulatory landscape allows more flexibility for Freezone businesses to grow and enter the local market. With support from Alex Zone, you can ensure a smooth, compliant, and profitable expansion into the mainland.

Ready to expand your Freezone company into the UAE mainland? Contact us now to get expert assistance tailored to your business goals.

Frequently Asked Question

1. Can mainland company do business in freezone?

Yes, the free zone company can initiate business in the mainland by getting the required licenses, having local partners and ensuring compliance with local regulations.

2. Can freezone company selling in mainland?

A free zone company trading in the mainland can increase its market presence by establishing a mainland office, obtaining a license, and teaming up with mainland distributors.