Exploring the Difference Between Internal Audit and External Audit
18/07/2025
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Dubai’s commercial landscape is evolving. Free zone establishments, including Limited Liability Companies and Private Joint Stock Companies, can now operate in mainland Dubai under new legal reforms. Previously restricted to their zones, these companies can obtain a dual licence through the Dubai Department of Economy and Tourism (DET) while retaining their original legal form, initial approval, and trade licence.
This allows broader business activities and eliminates the need to set up a separate mainland entity. Whether you're launching a business licence in a free zone or expanding existing operations, this change enables seamless access to both markets, boosting flexibility and growth potential for all company types.
Dubai’s free zones including DMCC, Jebel Ali Free Zone (JAFZA), Dubai Silicon Oasis, and Dubai South, were originally established to attract foreign investment with strategic incentives such as 100% foreign ownership, full capital repatriation, simplified regulation, and ready-to-use business premises. These zones played a key role in promoting international trade and establishing Dubai as a global business hub. However, they also imposed a significant operational barrier: companies licensed in UAE free zones could not conduct business in Dubai’s mainland without either setting up a separate mainland company or partnering with a local distributor.
This framework led many businesses to operate dual structures, maintaining both a free zone establishment and a mainland company resulting in duplicated business licence costs, separate commercial licence requirements, and increased compliance. In addition, obtaining initial approval and navigating the requirements for each jurisdiction added complexity, especially for companies with multiple business activities.
To address these challenges, the Dubai government has introduced a progressive integration model that bridges this regulatory gap. Under this model, qualified free zone companies whether structured as limited liability companies (LLCs), private joint stock companies, or other legal forms can now apply for a special permit to operate directly on the mainland without compromising their free zone benefits.
This policy shift is reshaping the business landscape. The key outcomes of this transformation include:
Expanded market access: Nearly 50,000 companies operating in various free zones in Dubai can now trade with mainland customers without the need for a separate onshore entity.
Cost efficiency: Businesses can streamline operations by eliminating duplicate licensing, administrative overhead, and compliance costs, making them more agile and competitive.
Innovation stimulation: Tech firms, e-commerce platforms, and professional services now have the flexibility to operate across Dubai, participate in government projects, and even set up service centres in mainland locations.
Ultimately, this move towards integration reinforces Dubai’s commitment to being a global business-friendly environment—allowing entrepreneurs and multinational corporations alike to scale with fewer restrictions and more opportunities across the emirate.
The recent transformation enabling Dubai free zone companies to operate in the mainland is anchored in a series of legislative and regulatory advancements. These new frameworks mark a significant shift in business setup procedures and aim to unify licensing structures across jurisdictions, reducing friction for entrepreneurs and investors alike.
These amendments played a foundational role by permitting full foreign ownership in various mainland sectors. They also empowered local regulators to issue secondary licenses to free zone companies, effectively enabling dual jurisdiction operation. This shift has redefined the boundaries between business in Dubai's mainland and UAE free zones, allowing companies to benefit from both environments.
This pivotal directive from the Department of Economy and Tourism (DET) introduced a structured process for obtaining a Mainland Operating Permit. It also outlined a new fee schedule based on the risk category of various business activities, ensuring fair and transparent compliance standards across industries.
Signed between DET and major free zone authorities such as DMCC, JAFZA, and DSO, these MOUs lay the groundwork for operational integration. They include data-sharing protocols and cross-inspection agreements to prevent oversight loopholes and ensure regulatory cohesion, particularly where many free zones overlap with the city’s economic zones.
Collectively, these legislative changes have reshaped the initial approval, business licence, and trade licence processes in Dubai. Companies can now pursue a unified path regardless of legal form, enjoying greater efficiency in compliance while expanding into new markets. Businesses no longer need to duplicate administrative steps when transitioning between zones, marking a decisive move toward streamlined governance.
Setting up a business in Dubai’s evolving regulatory environment has become more accessible, especially for companies established in free zones. To apply for a mainland operating permit, the following eligibility criteria must be met:
Any corporate entity or legal entity that is incorporated within a Dubai free zone and holds a valid trade licence is eligible to initiate the application process. The company formation must be compliant with the respective free zone’s regulations.
Companies engaged in business activities such as commercial, industrial, or most professional services are permitted to apply. However, businesses conducting regulated activities, including healthcare, education, and crypto-asset trading—must obtain separate approvals from the relevant authorities before proceeding.
Eligible applicants must maintain their office space or flexi-desk within their free zone jurisdiction. They must also demonstrate sufficient business operations by employing in-house staff or establishing outsourced contracts that support activities both within the free zone and on the mainland. A valid bank account under the company’s name is also expected.
Once the above criteria are satisfied, the company may proceed to apply online for mainland clearance. The trade name must be registered, and all documentation must align with DET’s (Dubai Economy and Tourism) requirements for business setup in mainland Dubai.
In summary, companies looking to expand their business in Dubai from free zone to mainland must ensure full compliance with trade licence, business activities, and substance regulations as part of the integrated licensing framework.
Dubai freezone companies now have multiple options to expand operations into the mainland without abandoning the benefits of their original license. Businesses seeking to establish a legal entity under the Dubai Department of Economy and Tourism (DET) can choose from three primary company formation pathways, depending on their needs, office space requirements, and business model.
This option allows a free-zone company to operate onshore while retaining its original trade license. The process begins with the free-zone authority issuing a No Objection Certificate (NOC). Once approved, the DET issues a mainland operating permit linked to the existing license.
This setup is highly effective for consultants, e-commerce startups, and software developers, especially those that do not need separate office space. While this route doesn't require full migration, businesses must still meet conditions such as having a valid trade name, adequate office space, and in some cases, additional approvals depending on the business activity.
Companies looking for a more physical presence, such as a warehouse or logistics hub, can opt to register a branch under DET while keeping their parent license offshore. This method is commonly chosen by logistics firms and commercial traders setting up in areas like Al Quoz or Ras Al Khor. It allows for flexible expansion while preserving free-zone benefits such as tax advantages or simplified customs procedures.
The DET typically requires the following documents for branch registration: parent license, board resolution, proof of office space, and a valid bank account. Depending on the business activity, certain cases may also require clearance from the General Directorate of Residency and Foreigners Affairs, particularly for businesses owned by non-GCC nationals.
For new businesses or those whose free-zone benefits are no longer strategically necessary, full legal migration to the mainland may be the best option. In this pathway, the company cancels its free-zone license and registers as a mainland business under DET. This grants full access to the UAE onshore market, government contracts, and unrestricted hiring of staff across the emirates.
This option is well-suited for companies scaling their operations, especially in sectors where having a legal entity under the mainland framework boosts credibility and growth. While business setup costs and processes vary, tools like the cost calculator on DET’s platform can help estimate fees associated with trade name registration, office leasing, and compliance.
Whether you're looking to retain a dual presence or move fully onshore, each of these pathways supports flexible business expansion in Dubai while preserving control over your commercial strategy. As Dubai continues to integrate free zones and the mainland, these options represent a significant opportunity for streamlined and scalable growth.
The company must pass a board resolution to approve the mainland expansion.
Submit an application to the free-zone authority along with audited financials and compliance certificates.
Update the Memorandum of Association (MOA) to include the new onshore activities.
Upload all required documents, including the NOC, MOA addendum, passport copies, and office lease details, to DET’s e-service portal.
Founders and managers must undergo background checks.
Pay the initial permit fee and annual renewal costs, which vary depending on the business activity.
Once approved, DET links the new permit to your original license.
Amend your VAT registration to reflect dual operations and, if importing goods, register with Dubai Customs.
The concept of a Dubai trade license has evolved with the introduction of dual permits:
The DET portal now synchronizes with free-zone databases, allowing for quick verification of both sides.
Businesses can align permit renewals with their free-zone anniversary, minimizing payment hassle.
Virtual offices within the free zone remain valid, and businesses can conduct onshore service delivery at client sites.
This hybrid approach reduces overhead costs while opening up opportunities for domestic invoices.
Direct Customer Access: E-commerce businesses, B2C brands, and other sectors can now invoice mainland residents directly.
Public-Sector Tender Eligibility: With a DET registration, businesses gain access to government contracts and tenders.
Enhanced Banking Credibility: A mainland component can signal diversified revenue, making it easier to secure financing from local banks.
Labor-Quota Flexibility: Businesses under the mainland permit can hire more employees without needing to upgrade to larger free-zone offices.
With access to mainland fulfillment centers, e-commerce businesses can offer faster delivery times and cash-on-delivery options.
These businesses can now contract directly with UAE clients who require DET-licensed vendors.
Consultants and agencies can now bill mainland clients directly, eliminating the need for local agents.
By positioning assets on the mainland, logistics businesses can reduce last-mile delivery costs.
Health technology firms can run pilot programs with local hospitals without forming complex joint ventures.
Compliance Audit: Before applying for a mainland permit, ensure all fines or late renewals with the free-zone authority are cleared.
Align Accounting Codes: Ensure that your mainland and free-zone accounting systems align for seamless reporting.
Update Marketing Collateral: Update your business documents, websites, and invoices with the new mainland trade license number.
Train Sales Staff: Ensure that your sales teams understand the difference between issuing VAT invoices under the mainland permit and the free-zone transactions.
Review Insurance Policies: Your existing insurance may need to be updated to cover activities outside the free-zone jurisdiction.
By 2027, over 60% of free-zone companies are expected to obtain mainland authorization, reflecting Dubai’s shift toward a fully integrated business environment. This evolution supports the D33 economic agenda, which aims to attract AED 100 billion in FDI and position Dubai among the world’s top three business hubs.
To achieve this, authorities are simplifying company formation, easing licensing approvals, and promoting dual-license models. The focus is on digitalization, faster trade name approvals, and support for single-shareholder setups and emerging industries.
Dubai’s business ecosystem is moving toward a seamless model, where free-zone and mainland operations are no longer siloed, creating greater opportunity for investors and entrepreneurs alike.
At Young & Right, we specialize in guiding free zone businesses through every stage of their expansion into mainland Dubai, ensuring a smooth transition while aligning with the latest compliance mandates and business setup requirements.
We assist with all regulatory approvals, documents required, and procedural complexities associated with company formation, whether you’re an SME, a single shareholder, or a growing enterprise seeking a mainland licence for broader market access.
We streamline the business setup process for companies planning to establish a dual presence, whether through a branch office, legal migration, or dual licence approval. We ensure proper registration of your trade name, guide you through selecting the appropriate legal structure, and liaise with government associations and authorities to secure timely approvals.
Whether you operate in logistics, e-commerce, or professional services, our consultants provide bespoke strategies to meet sector-specific compliance and operational requirements. We help ensure your licensing aligns with activity scope and DET guidelines.
We deliver end-to-end advisory support covering VAT registration, operational substance, and real-time reporting, ensuring your business stays compliant in both free zone and mainland jurisdictions.
Using cloud-based tools, we offer transparent oversight of all approvals, application submissions, and regulatory interactions, from trade name reservation to issuance of your new mainland licence.
We help you move beyond compliance, providing actionable roadmaps for expansion, marketing, and financial structuring to make the most of Dubai’s integrated commercial landscape.
The ability for Dubai freezone companies to operate seamlessly in mainland Dubai redraws the map of opportunity. Founders no longer face a binary choice between duty‑free trade and local customer access; they can claim both. By understanding eligibility criteria, securing the appropriate Dubai mainland license, and embedding robust compliance processes, entrepreneurs unlock the full promise of the emirate’s increasingly unified marketplace.
Young & Right helps you navigate dual licensing, DET approvals, and compliance—so you can access new markets and scale faster with zero disruption.
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