Sheikh Hamdan’s New Resolution and Its Impact on Free Zone Businesses in Dubai
Image: Dubai Media Office
Dubai is making waves in the business world once again with a decisive move from Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai and Deputy Prime Minister and Minister of Defence of the UAE. His recent Executive Council Resolution No (11) of 2025 is set to revolutionize the way free zone businesses operate within the emirate, particularly concerning their relationship with mainland Dubai.
What the Resolution Entails
The newly passed resolution focuses on the regulations governing businesses in Dubai’s free zones, promoting economic synergy within the region. Historically, companies licensed in free zones had strict limitations regarding operations outside those designated areas. This new regulation, however, allows for greater flexibility by permitting these companies to expand into mainland Dubai. This move is a significant alignment with the broader goals outlined in the Dubai Economic Agenda, termed D3.
One notable aspect of the resolution is its specific exclusion of financial institutions licensed within the Dubai International Financial Centre (DIFC). This exclusion underscores the continued importance of specialized compliance regulations in the financial sector while opening doors for other sectors.
Enhancing Dubai’s Business Ecosystem
The resolution is a monumental step toward fostering a more dynamic and competitive business ecosystem in Dubai. By facilitating the growth of free zone businesses beyond their traditional confines, the initiative helps position Dubai as a more attractive destination for both local and international investors.
This change is not just about expanding physical locations; it’s about creating a mindset that nurtures entrepreneurship and sustainable development. With a more flexible framework, businesses can innovate and respond to market needs more effectively.
Regulatory Compliance and Operational Flexibility
While the resolution offers significant operational freedom, it also emphasizes essential compliance with federal and local regulations. Companies wishing to operate beyond free zone borders are required to maintain separate financial records for their operations in both the free zone and mainland settings. This dual compliance ensures transparency and governance, creating a more accountable business environment.
For businesses looking to set up shop outside Dubai’s free zones, securing the necessary licenses will be a mandatory step. This ensures that the expansion remains within the legal framework established by the local government.
Role of the Dubai Department of Economy and Tourism (DET)
Central to the implementation of this resolution is the Dubai Department of Economy and Tourism (DET), which has been granted the authority to issue licenses that allow free zone establishments to operate in mainland Dubai or establish branches within the emirate. Companies aiming to expand can look forward to obtaining these licenses, which will start off valid for one year, with the option for renewal.
Furthermore, the DET, in collaboration with other licensing authorities, is tasked with compiling a list of activities eligible for licensing within six months of the resolution’s announcement. This proactive approach ensures businesses have clarity on available opportunities and supports quick adaptation to new regulations.
Implementation Timeline and Future Outlook
All establishments wishing to operate outside their free zones will need to adhere to the resolution’s stipulations within one year from its effective date. However, an extension of this deadline may be granted at the discretion of the Director General of the DET. This flexibility is designed to support businesses during the transition period.
Additionally, this resolution supersedes any conflicting previous regulations, establishing a clear path for the future of free zone operations in Dubai. The anticipated effects include not only heightened economic activity but also job creation and innovation, reinforcing Dubai’s reputation as a progressive business hub on a global scale.
With Sheikh Hamdan’s latest initiative, the horizon looks promising for businesses in Dubai as the emirate continues to cultivate an environment ripe for growth and opportunity.
Read more about Dubai’s evolving landscape: Dubai to get new free zone cluster.
