Free Zone Mainland Operating Permit in the UAE

A foresighted policy shift by the UAE authorities, the Free Zone Mainland Operating Permit authorizes free zone companies with a Dubai Unified License (DUL) to operate in the mainland jurisdiction as well. No need to obtain an additional mainland license or permit once the company has this permit. The permit is presently available for IT, trading, consultancy, professional services, and design sectors. Regulated sectors would also be included in the subsequent phases.

Several elements make this move a beneficial one for both investors and the business spectrum of the country. Those include:

• Starting a free zone company has several pros that lead investors to choose this jurisdiction over the mainland. Nevertheless, a free zone company was not permitted to access mainland markets directly. This major drawback limited the business prospects of a free zone company. The permit removes the restriction. Now, a company can operate in both zones without creating a separate mainland company or a local trading partner.
• Companies, irrespective of their size, the amount of investment, or turnover, can opt for the permit. The possibility of growth of the small companies and start-ups is expected to rise manifold with this initiative.
• Transparent business setup and expansion option is another noteworthy aspect of the free zone mainland operating permit in the UAE. There is no complex paperwork or additional approvals. Legally approved business operations in the mainland, while the main entity is in the free zone. That’s what the permit offers.
• Free zone companies were not permitted to bid for government contracts earlier. The companies can be involved in bidding and obtain government contracts after obtaining the permit.
• Presently, the permit is available for the non-regulated business sectors like IT, trading, consultancy, professional services, and design. The regulated sectors would be approved in the later phases.
• The companies from the above-mentioned sectors in the DMCC, DAFZA, JAFZA, DSO, Dubai South, all free zones operated by the TECOM group, and Meydan free zones can apply for the Free Zone Mainland Operating Permit.
• The companies operating in the free zone and mainland should maintain separate financial data for each jurisdiction. Corporate tax at the rate of 9% has to be paid for the income generated from the mainland business. The tax framework for the free zone business would be the same as earlier.
• No need to hire a new team for operations in the mainland jurisdiction. The existing manpower can be utilized for operating the business in both zones. Hiring additional staff is completely within the discretion of the company management.

The Free Zone Mainland Operating Permit in the UAE appears to be a highly beneficial option for the free zone companies.

The launch of the permit eliminates the need to restructure the free zone company or set up a separate entity for the mainland operations. Investors can consider the availability of the prolific mainland market while establishing their business in the free zone. The cost-effective, transparent, and budget-friendly option can boost business turnover phenomenally.

• The permit is valid for six months. It can be extended for a period of six months each.
• The cost of the Free Zone Mainland Operating Permit is AED 5000. Renewal cost is also the same.

The authority is providing testing time to companies by limiting the permit periodicity to six (06) months. A long-term obligation would have been proven intricate and might have created confusion, impacting decision-making. AED 5000 is an amount affordable even by a low-budget start-up or a small entity. Making the permit available to everyone.

Digitization is completed in almost all sectors in the UAE. Here also, firms can apply for the permit online. Free zone companies issued with the Dubai Unified License (DUL) can apply for the permit through the Invest In Dubai (IID) portal. The website has detailed instructions regarding the application process. You may consult us if you are looking for expert advice on the Free Zone Mainland Operating Permit in the UAE.

Reformations with time are crucial. The UAE has been known for its investor-friendly policies, growing markets, global reach, advanced infrastructure, and productive environment. As a matter of fact, similar decisions have been the key to driving the country to riches.

The aspects that led to this decision are:

• Ensure a more business-friendly space for the free zone companies. Even though they have been benefiting from the free zone jurisdiction benefits, the permit will make a free zone business more fruitful.
• The Dubai Department of Economy and Tourism (DET) is expecting a quantum jump in the cross-zone business activities with the promulgation of this permit.
• Free zone companies are presented with more opportunities, like bidding for government contracts, with the Free Zone Mainland Operating Permit.
• 10,000+ free zone companies will benefit from the new policy. They can reach out to potential clients without setting up a business in the mainland.

Listed here are the core differences between the existing system and the changes to the Free Zone Mainland Operating Permit. A cursory glance will tell you why the permit is considered to be pro-investor.

The DET is expecting at least 15% to 20% increase in cross-business operations, with the introduction of the permit. As the permit cost is kept at a bare minimum, companies can consider it for trial as well. To check how the business is performing in the mainland market.

Hope you got a clear idea about the newly introduced Free Zone Mainland Operating Permit in the UAE. It is a genuine attempt by the authorities to enhance investment by supporting entrepreneurs.

You can reach out to us if you are looking for a specialist’s support for setting up a business in Dubai or obtaining a permit. Our team is always at your service. We assign a dedicated team for each of our clients, ensuring a seamless and systematic process. That is how Kiltons has been maintaining the pole position since the company’s establishment in 1999.

For any doubts, queries, or support, contact us now.