An Overview of Dubai’s Executive Council Resolution No (11) of 2025

Dubai Issues Resolution Regulating Free Zone Establishments’ Activities Outside Their Zones

In a significant move to enhance economic integration and regulatory clarity, Dubai has issued Executive Council Resolution No. (11) of 2025, laying out the framework for free zone establishments to legally operate in areas of Dubai beyond their designated free zones.

The resolution, signed by His Highness Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, reflects the emirate’s ongoing strategy to create a more seamless and business-friendly environment promoting transparency and ensuring compliance with local regulations.

Key Highlights of the Resolution

1. Scope and Applicability

The regulation applies to companies licensed in Dubai’s free zones seeking to conduct business outside their respective zones but within the Emirate. Notably, financial institutions licensed by the Dubai International Financial Centre (DIFC) are excluded.

2. Licenses and Permits

The resolution introduces three primary avenues through which free zone establishments can legitimately conduct activities outside their free zone:

a. License to establish a branch within the Emirate: This allows an Establishment to set up a full-fledged branch within the main Emirate, operating under the regulatory purview of the Department of Economy and Tourism (DET).

b. License to establish a branch operating out of the free zone: This option caters to establishments that wish to maintain their primary operational base within the free zone but require a formal license to conduct activities within the Emirate.

c. Permit to conduct specific Activities within the Emirate: For more temporary or specific engagements, the DET may issue a permit valid for a period not exceeding six (6) months, allowing the Establishment to undertake defined activities outside the free zone.

Each of these pathways comes with specific conditions, emphasizing the need for prior approvals from both the relevant licensing authority (the free zone authority) and, where applicable, other Government entities supervising the particular activity.

3. Key Conditions and Compliance Measures

The conditions for obtaining these licenses and permits are meticulously laid out in the resolution. Common requirements across all types include:

• Application Submission: Establishments must submit applications to the DET, adhering to prescribed forms, processes, and procedures.
• Prior Approvals: Obtaining the approval of the respective free zone Licensing Authority is a prerequisite. Additionally, if the activity falls under the purview of other Government entities, their approval is also required.
• Valid License: The Establishment’s primary license issued by the Licensing Authority must remain valid.
• Fee Payment: Prescribed fees must be paid to the DET. For a license to establish a branch operating out of the free zone, the annual fee is AED 10,000.00. A temporary permit incurs a fee of AED 5,000.00.
• Documentation: Providing necessary documents such as the memorandum of association, trade license from the Licensing Authority, and the manager’s passport and Emirates Identity Card is a prerequisite.

Beyond the initial licensing, the resolution underscores the applicability of existing legislation in the Emirate, including administrative penalties and measures. This means that free zone establishments operating outside their zones will be subject to the same regulatory standards and enforcement mechanisms as other businesses in the mainland.

Moreover, these establishments will be subject to audit and inspection in accordance with applicable federal and local legislation, with procedures agreed upon between the DET and the relevant Licensing Authority.

4. Grace Period for Compliance

Recognizing the need for a smooth transition, the resolution grants all existing establishments currently conducting activities outside the free zone a grace period of one (1) year from the effective date to comply with its provisions. The Director General of the DET has the authority to extend this grace period once for the same duration if necessary. This phased approach allows businesses ample time to adapt their operations and obtain the necessary licenses or permits.

Conclusion

This resolution bridges a long-standing regulatory gap between free zone and mainland business operations. By permitting controlled expansion of free zone entities into the broader Dubai market, the government promotes ease of doing business, economic diversification, and improved investment flows. It also reinforces transparency and accountability through structured licensing, recordkeeping, and inspection mechanisms.

As a strategic enabler of business expansion, the resolution provides free zone establishments with a clear, structured framework to operate across the Emirate. This clarity empowers businesses to plan with confidence and reinforces Dubai’s reputation as a secure, predictable, and highly attractive destination for investment and enterprise.