If your business has been established in an Emirates free zone in recent years, you may have often wondered:
“How will I be able to sell my products to customers on the mainland?”
Traditionally, this meant going through a difficult process. Liquidation of the free zone entity, creation of a new one in the mainland, contract transfers, financial changes, visa changes – all taking many months. But not anymore.
The Emirates government quietly introduced amendments to legislation. And most entrepreneurs have yet to catch up.
Why This Matters for Foreign Founders
Under the previous setup, founders had to make an either/or decision straight off the bat: free zone (cheaper, 100% ownership, forbidden from trading outside the free zone) or mainland (greater access to the whole UAE, costlier, with higher compliance).
They picked the former. Their startup expanded. Now they were in trouble.
A consultant in Israel expanding his client base in Saudi Arabia through Dubai. A German fintech requiring UAE consumers for their services. A British e-commerce founder discovering his best customers were located in Abu Dhabi.
They all faced the same brick wall: rebuild their startup or live with restrictions.
New regulations took down that wall.
The Three Scenarios That Just Got Easier
1. Transfer from free zone to mainland.
A registered entity in a free zone now can relocate to the mainland without being dissolved, retaining registration, contracts, and banking relationships, all without having to reincorporate.
2. Establishment of free zone branches in the mainland.
Free zones and financial free zones now allow their registered companies to establish branches or offices in the mainland area, as long as they have the necessary license. This enables companies, whether professional services firms, tech companies, consulting firms, or holding companies, to conduct business outside the free zone area without making any structural changes.
3. Transfer from one free zone to another.
Need to move from IFZA to DMCC because you’ve become a commodities trader? You can without losing the benefits of the original company structure, record, and relationships.
What It Does Not Do
And herein lies the biggest mistake most blogs are making on this issue. Yes, these changes make it easier to change locations but no, these changes do not blur the lines between jurisdictions. Your corporate tax position remains highly relevant.
Companies established in free zones who move to the mainland (or establish mainland branches), would have to keep the accounting for their free zone and mainland activities separated to retain their ability to enjoy tax treatment in the free zone.
Mainland branches of Qualified Free Zone Persons are deemed a domestic Permanent Establishment and income derived through domestic PE shall be determined as if it is the separate and distinct entity which shall be subject to corporate tax rate of 9%.
Note: you can move around as much as you want. You will have to pay attention to details as you did before. What has changed, is the freedom in structuring your operations. That’s why today we observe more requests from clients regarding restructuring than registration only.
What Founders Should Actually Do Right Now
Three things founders should really be doing right now
Are you currently working with UAE mainland clients? If the answer is no, then opening a branch on the mainland under the new rules will make perfect sense. You’ll preserve all the advantages of having a free zone company but be able to invoice UAE mainland clients from the branch. Easy peasy. No tax on international income and legal invoicing.
Have you outgrown your current free zone?
If you initially decided to establish your company in a cheaper free zone, but your business has become too big for it, especially when it comes to trading, finances, or any regulated services, then transferring to a credibility-oriented free zone such as DMCC or DIFC makes sense. Your business history remains untouched by such an operation, and banks see that. Potential investors will see it too.
Are you planning to establish a company soon?
Don’t complicate your situation by over-engineering it. The new flexibility allows for the possibility that you won’t incur as heavy costs for mistakes at the very beginning of your venture. Be realistic and pragmatic.
A Quiet Story Behind the Main Story
The UAE has taken many steps towards making it easier to avoid the problems involved with entering new foreign business environments once only. Officials in the free zones have made great progress in improving their process. By 2026, almost all the zones will implement online procedures, electronic signatures, and rapid approval systems. Changes in the Commercial Companies Law have been the most important reforms recently.
In conclusion, any entrepreneur who is contemplating operating in Dubai should know that the UAE makes it easy to enter, operate, and succeed without starting anew.
How DXB-VIP Can Assist You
The past six months have seen us helping our clients to restructure according to the new regulations, by relocating free zone companies to mainland entities, switching registration between free zones, and reconciling the new flexibility with corporate taxation.
If you’re unsure whether your existing structure is still suitable for your business needs, or you’re planning on establishing a presence in Dubai and starting off on the right foot from day one, this is precisely what our consultations can assist you with.
Free consultation of 30 minutes:
- Assessment of restructuring for your existing UAE company
- Assessment of Free Zone versus Mainland according to the new regulations
- Tax consequences of setting up an entity
- Banking and visa continuation
Frequently Asked Questions
- Can a UAE free zone company really move to the mainland without liquidating in 2026?
Yes. Under the amended Commercial Companies Law and Dubai Executive Council Resolution No. 11 of 2025, free zone companies can now transfer their registration to the mainland, to other free zones, or to financial free zones — keeping their legal identity, contracts, and trade history intact.
2. Does this mean free zone companies can now sell to UAE mainland customers freely?
Not directly — but it’s much easier. Free zone companies can now set up mainland branches or representative offices to serve mainland clients, without restructuring their core company.
3. Will moving affect my UAE Corporate Tax position?
Potentially. Free zone companies that operate on the mainland must maintain separate accounting to preserve their 0% Qualifying Free Zone Person status on qualifying income. Mainland branches are taxed at 9% on attributable income. Our accounting team handles this end-to-end.
4. Should new founders still start in a free zone? For most foreign founders, yes — particularly with one of the 15 major free zones we work with. The new rules make the choice less permanent and easier to adjust later.