The direct to this question is no. Free zone companies are not allowed to conduct business in mainland Dubai. For us to know the nitty-gritty details about this, it is wise to find out more about the free zone and mainland jurisdictions.
The mainland is the targeted jurisdiction which is considered more politically, demographically, and economically important. There are fewer restrictions for businesses and companies that operate in the mainland. They are also free to operate anywhere across the UAE. A mainland company is also known as an onshore company and it is licensed by the DED or Department of Economic Development.
This is a jurisdiction or a region that is intended for easy company formation which is mainly intended for international businesses. This region offers tax exemptions and privileges and 100 percent foreign ownership. Free zone companies can also take advantage of single window administration convenience offered by the region and all across the UAE.
A free zone company is prohibited from doing business in the mainland. It is only the Department of Economic Development (DED) that can issue a permit for a free zone business to do business in Dubai mainland. This is according to the law no. 13 of 2011. It is stated that no company is allowed to do business outside of the free zone except by way of a corporate entity licensed by the DED. Any company or business that violates the law can be fined as much as AED 100,000.
However, in certain instances when a free zone company intends to do business in Dubai mainland, it is necessary for the company to obtain appropriate licenses from the DED. Free zone companies may also collaborate with a distributor who owns a DED license and does business in the mainland. Aside from this, it is possible for a free zone company to operate in the mainland by way of a civil work company, a branch office, or a limited liability company (LLC).
Learn more about the differences between a mainland and free zone company setup in Dubai by talking to a reliable business consultant. Find out what’s suitable with your type of business and what opportunities await you for business growth. Contact us now.