The very absolute cause for which businesses globally are now placing their root hub in the UAE is because of the flexibility it provides.
Most of the smart entrepreneurs are now thinking of switching from the freezone to Mainland business UAE as one strategic and competitive way to achieve a logical step.
This blog will help you read about how and when it will be perfect to switch from free zone to Mainland business UAE.
When does market access becoming important to switch from free zone to mainland business UAE
Make your customers reach you transparently — this can make your customers feel that they are in Dubai truly.
Here are some market accessibilities:
- Executive Council resolution Number 11 of 2025 permits freezone businesses to operate in the mainland.
- No more dependency on UAE distributors for sales.
- Immediate accessibility to over 10 million consumers and complete B2B mobility.
Note: Make the move smartly recognizing accessibility of the UAE market towards your business growth.
Interested readers also prefer reading trade licensing methods in Dubai.
When do government contracts or large projects make the shift from freezone to Mainland business UAE?
If your business is based on large projects or government contracts then a freezone license cannot open the door for you.
- Infrastructure works, government tenders and large projects require switching from free zone to Mainland business UAE.
- Consultation, engineering, construction and financial management business achieve strong accessibility and credibility with multi-million-dirham contracts.
Flexibility and wider activity scope for switching from free zone to Mainland business UAE.
Simply a business owner can relate to this that the free zone only provides you one license but mainland gives you wings. You need to learn these points when you seek wider activity scope and flexibility.
- Mainland businesses can easily operate under a wider spectrum such as manufacturing, services, distribution, trading and retail.
- Mainland setup provides warehouse space, offices, visa allocations and multiple Emirates expansion.
Real budget of shifting from free zone to Mainland business UAE.
Business freedom comes with a price — here is a breakdown that can help you understand business setup and requirement cost typically in free zones and in the mainland.
| Set up cost and requirement | Typical free zone | Typical mainland post 2025 |
| Business license | AED 5,500 to 20,000 | AED 10,000 to 30,000. |
| Office space | Flexi desk starting at AED 15,000/yr. | Formal office lease: AED 30,000 to 100,000/year |
| Corporate tax (Profit > AED 375,000) | 0% on the free zone income. | 9% on profit exceeding threshold. |
Note: With 2025 reforms, some of the free zone businesses are maintaining 100% foreign ownership in the mainland and also eliminating local sponsor requirements.
For cost and compliance discussion you may consult with us.
Stepwise guidance to make a transition from freezone to Mainland business UAE
For a responsible and focused businessman, it is enough to understand that the quicker you are following the rules, the faster you will get your business expanded.
Here are the quick steps you need to follow:
- Checking eligibility and business activities: It will help you ensure the conversion of your freezone license under the eligibility of 2025 framework.
- Applying for Mainland license permit: Mainland license permit allows reforms comprising branch license and activity permit for short term projects.
- Preparing for documentation and office lease: Mainland setup requires Flexi-desk but also bona fide office lease.
- Keep one separate accounting: If in case you want to carry both free zone and mainland operations alongside then you need to maintain separate financial records to achieve proper compliance.
Prepare budget for compliance and corporate tax: Mainland profits above AED 375,000 that can be taxed at the rate of 9%.
Conclusion:
Switching from freezone to Mainland business UAE as one smart move
Reformations in 2025 have brought immense streamlined feasibility and attractiveness particularly for Dubai to experience freezone to Mainland business UAE transformation.
For businesses expecting to serve local customers and expand operations, now is the time to decide your freezone to Mainland business UAE transformation.
Let’s Connect with Us to discuss all you need with transparency, customized layout and start-to-end assistance with 100% your inclusion in decision making.
FAQs
Q1. Does freezone to mainland business UAE require capital restructuring?
Yes, because Mainland licensing can mandate different activity capital and shareholding requirements.
Q2. Will transferring business from the free zone to Mainland business UAE required change in tax obligations?
Yes, mainland entities fall under complete UAE corporate tax scope unless exemption.
Q3. Is it necessary to get audit reports after shifting?
Most of the mainland licenses need to audit financials annually after shifting from freezone to Mainland business UAE.
Q4. What happens to the existing contracts if one decides to transfer the freezone to Mainland business UAE?
The existing contracts from freezone to Mainland business UAE require reassigning under the new mainland entity.
Q5. Is it true that economic substance reporting gets impacted due to transfer of freezone to Mainland business UAE?
Yes, activity classification might change the ESR requirements due to transfer of freezone to Mainland business UAE.
Do you need help in business setup or looking to start a business in Dubai? Here you will find all the information and business ideas you need for starting your own company in Dubai.
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