Expanding your business reach in Dubai is a great step toward long-term growth. One common move many entrepreneurs make is transferring their free zone company to a mainland business. This allows for wider market access, direct trade within the UAE, and more freedom when dealing with government or private clients.
This guide explains, in simple terms, how to shift your company from a free zone setup to the Dubai mainland, the steps involved, the legal considerations, and the benefits of this business transformation.
Why Move From Free Zone to Mainland in Dubai?
Operating in a free zone offers many benefits, like 100% foreign ownership, tax exemptions, and simple registration. However, it has limitations—especially when it comes to doing business inside the UAE.
Key Reasons for Transferring to Mainland
- Serve the local UAE market directly
- Bid on government projects
- Open more physical locations in the UAE
- Partner with local companies freely
- Expand operations with fewer restrictions
If your business has outgrown the free zone model, then moving to mainland is a smart move to unlock full-scale opportunities.
Can You Transfer a Free Zone Company to the Mainland Directly?
There is no direct legal process to “transfer” a free zone license to the mainland. What actually happens is that you set up a new mainland company while closing or continuing your free zone license depending on your plan.
You can’t shift a license from one jurisdiction to another. Instead, you:
- Register a new mainland license
- Apply for necessary approvals
- Transfer operations, contracts, and assets
- Maintain or cancel your free zone entity
Step-by-Step Guide to Move from Free Zone to Mainland
Below is a complete step-by-step explanation of how to go from free zone business to mainland business in Dubai.
Step 1: Evaluate Your Business Needs
Before starting the legal work, assess the real business reason for moving. Are you looking to serve local customers, hire more staff, or simply need a more flexible business environment?
Make sure your decision aligns with your future growth.
Review Your Free Zone Restrictions
Understand what your current free zone license allows or limits. For example, most free zones don’t allow:
- Selling directly to UAE mainland customers without a distributor
- Having multiple branches outside the zone
- Participating in local tenders
This review will clarify what you gain by setting up a mainland business.
Step 2: Choose the Right Mainland Business Structure
The Dubai mainland offers multiple legal structures. The most popular for growing businesses is the Limited Liability Company (LLC). It allows:
- Full trading rights across the UAE
- Multiple visas
- Flexibility in business operations
Ownership Rules
As of recent changes, 100% foreign ownership is now allowed in many business activities, removing the old requirement of a local Emirati partner for some sectors.
However, some sensitive or strategic sectors may still require 51% local ownership, so consult with an expert before choosing the activity.
Step 3: Apply for Mainland License
You’ll need to submit a new application to the Department of Economy and Tourism (DET) in Dubai. The process includes:
- Trade name approval
- Initial approval
- Memorandum of Association (MoA) drafting
- Tenancy contract (Ejari) registration
- Final license issuance
This step mirrors the Mainland Company formation in Dubai, except now your business is evolving—not starting from scratch.
Step 4: Handle Visas and Staff Transfers
If you plan to keep your current team or transfer employees, you’ll need to:
- Cancel free zone visas
- Apply for new mainland visas
- Process employment contracts under MOL (Ministry of Labor)
Note: This needs careful planning, as employees cannot legally hold two visas under different jurisdictions at the same time.
Step 5: Reorganize Your Banking and Contracts
Once your mainland license is ready, update your:
- Bank account (or open a new one under the new license)
- Client contracts
- Service agreements
- VAT and tax registration
These changes ensure your new company runs without disruptions.
Step 6: Cancel or Maintain the Free Zone Company
You now have two choices:
Option A: Cancel the Free Zone License
If you no longer need the free zone setup, apply for license cancellation. This includes:
- Clearing all dues
- Submitting final reports
- Cancelling visas
- Returning office space
Option B: Keep Both Companies
Some businesses choose to keep both entities. For example, a tech business may keep R&D in a free zone and open a trading license in the mainland.
This hybrid model helps reduce costs while maximizing flexibility.
Benefits of Running a Mainland Company in Dubai
Making the move brings several advantages for businesses ready to scale up:
Access to the Entire UAE Market
Mainland companies can sell goods or services anywhere in the UAE without restrictions or local agents.
Government and Corporate Contracts
You become eligible to bid on public sector projects or serve large companies with procurement policies requiring mainland-registered vendors.
Unlimited Business Locations
You can open multiple branches, rent retail space, or operate from prime business districts without free zone limits.
Easy Hiring and Visa Allocation
You can apply for multiple employee visas and hire non-restricted staff under UAE labor law.
Challenges You Might Face During the Transfer
Switching from a free zone to mainland setup isn’t just paperwork—it has challenges.
Legal Documentation
Drafting new MoA, commercial agreements, and updated contracts takes legal effort and accuracy.
Employee Visa Transfers
This step must be managed carefully to avoid visa gaps or employment discontinuity.
Cost Differences
Mainland operations might involve higher setup and rental costs compared to free zones. You’ll also need to account for sponsorship or regulatory fees depending on your activity.
Cost of Shifting from Free Zone to Mainland
Here’s a general idea of what you’ll spend during the process:
New Mainland Setup
- License registration: AED 10,000–20,000+
- Office space (Ejari): AED 8,000–15,000/year
- Legal translation & documents: AED 2,000–5,000
Optional Costs
- PRO services: AED 2,500+
- Visa transfer: AED 3,000–5,000 per person
These are estimates and can vary based on your business type and location.
Tips to Make the Transition Smooth
- Hire a PRO or business consultant to guide the legal steps.
- Communicate with employees early to ensure smooth visa changes.
- Transfer customer relationships to the new license carefully to maintain continuity.
- Ensure VAT compliance when shifting operations.
Can You Retain the Free Zone Company and Still Expand into Mainland?
Yes. Many entrepreneurs operate both. You can:
- Register a mainland branch of your free zone company (in some cases)
- Start a new mainland LLC under the same ownership
- Use the mainland company for local distribution or client management
This strategy provides the best of both worlds—cost savings from the free zone and market access via the mainland.
Freezone Company Formation in Dubai vs Mainland
While Freezone company formation in Dubai offers tax incentives and easy setup, it limits your local market access. Mainland companies, on the other hand, give you unrestricted access to customers and the public sector, which is ideal for long-term expansion.
Conclusion
Transferring from a free zone company to a mainland business in Dubai opens the door to local markets, partnerships, and greater freedom. While it involves setting up a new legal entity rather than a direct move, the steps are manageable with the right guidance.
From getting a new license to transferring employees and updating bank details, each step plays a role in your business transformation. Once complete, your company will be ready to operate freely across the UAE, grow at scale, and attract high-value clients.
For a smooth transition, it’s always wise to work with professionals experienced in Business Setup in Dubai.
FAQs
Can I move my current free zone license to the mainland?
No. You can’t transfer the same license. You must form a new mainland company and manage the transition of your operations.
Do I need to close my free zone business to start on the mainland?
Not necessarily. You can maintain both if it serves your business model or cancel the free zone license once your mainland operations are ready.
How long does it take to set up a mainland company?
It usually takes 7 to 14 working days, depending on document readiness and approvals.
Do I need a local sponsor for the mainland license?
For many activities, 100% foreign ownership is allowed. For others, you may still need a local partner or agent depending on the business activity.
Can I transfer my employees to the new mainland company?
Yes, but you must cancel their free zone visas and reapply under the new mainland license through the Ministry of Labor.
