Serving UAE mainland clients from a Dubai free zone: the 2025 permit and the 9% rate

For years the rule was simple: a free zone company could not sell to customers on the UAE mainland without a distributor, a branch or a separate mainland company. In Dubai that is no longer the whole answer. A 2025 resolution created a direct route for Dubai free zone companies, and since October 2025 there is a permit to use it.

For a resident whose clients are in Dubai, this changes the question. It is no longer "free zone or mainland". It is "where are the clients, and what does the mainland income cost in tax". This guide answers both, from the texts.

The legal basis: Executive Council Resolution No. 11 of 2025

Dubai Executive Council Resolution No. 11 of 2025, issued on 3 March 2025, regulates the activities of free zone establishments outside their zone. It does not apply to financial establishments licensed in the Dubai International Financial Centre (Article 2).

Under Article 4, the Department of Economy and Tourism (DET) may authorise a free zone establishment to operate in the emirate through one of three routes:

• a licence for a branch within the emirate
• a licence for a branch operating out of the free zone
• a permit to conduct specific activities within the emirate

The terms are set in the resolution itself. A branch licence is valid for one year (Article 4(b)). A permit is valid for no more than six months (Article 7) and covers only activities on the list that DET publishes with the licensing authority (Article 9). The fees are AED 10,000 a year for a branch operating out of the free zone and AED 5,000 for the permit (Article 12). A branch has no separate legal personality from its parent (Articles 5(b) and 6(b)). Activities outside the free zone must be recorded in financial accounts kept separately from the free zone activities (Article 3(b)(2)), and existing free zone staff may carry out the work (Article 8).

The permit in practice

The Free Zone Mainland Operating Permit was launched on 8 October 2025 by the Dubai Business Registration and Licensing Corporation, part of DET, with the Dubai Free Zones Council (Dubai Media Office and DET announcements, 8 October 2025). The published terms:

• validity of six months, for a fee of AED 5,000
• open to free zone companies holding a Dubai Unified Licence (DUL)
• application online through the Invest in Dubai platform
• a first phase limited to non-regulated activities: technology, consultancy, design, professional services and trading, with regulated sectors to follow

How the mainland income is taxed

The Dubai Media Office announcement states it plainly: mainland revenue under the permit is subject to 9% corporate tax, with separate financial records kept in line with Federal Tax Authority requirements.

The federal rules behind that sentence are worth knowing, because they decide whether the free zone 0% survives alongside it.

Cabinet Decision No. 100 of 2023 (issued 25 October 2023, effective from 1 June 2023) treats income from customers outside the free zones as qualifying only where it comes from a Qualifying Activity (Article 3(1)(b)). The list of Qualifying Activities is in Ministerial Decision No. 229 of 2025 (dated 28 August 2025, Article 2(1)): manufacturing, processing, trading of qualifying commodities, holding shares, ship operation, reinsurance, fund management, wealth and investment management, headquarter services and treasury for related parties, aircraft financing, distribution in or from a Designated Zone, and logistics. Technology, consultancy, design and professional services are not on it.

So for a services company, mainland income is 9% income. That is not a flaw in the permit. It is the price of a client base the company could not reach directly before, and 9% above the AED 375,000 threshold remains a strong rate.

What matters is how that income sits next to the free zone income. Two mechanisms exist, and which one applies is a classification question:

• If the mainland work creates a Domestic Permanent Establishment, its income is taxable at 9%, calculated as if the establishment were a separate person (Cabinet Decision No. 100 of 2023, Article 5), and its revenue is left out of the de minimis test (Article 4(3)(b)). The 0% on qualifying free zone income can survive.
• If it does not, mainland revenue from a non-qualifying activity counts as non-qualifying revenue (Article 4(2)(a)). The de minimis limit is 5% of total revenue or AED 5,000,000, whichever is lower (Ministerial Decision No. 229 of 2025, Article 3). Crossing it ends Qualifying Free Zone Person status for that tax period and the four following ones (Article 5(2)).

Whether a Domestic Permanent Establishment exists is decided by the permanent establishment test of Article 14 of the Corporate Tax Law, applied to the area outside the free zones (Cabinet Decision No. 100 of 2023, Article 3(4)). Settle that with a tax adviser before the first mainland invoice, not at the first return.

Permit, branch or mainland company

• The permit fits project work or occasional mainland clients: up to six months, AED 5,000, listed activities only.
• The branch licence fits a continuing presence on the Dubai mainland: one year, AED 10,000 a year for a branch operating out of the free zone, no separate legal personality.
• A mainland company remains the answer when most clients are on the mainland, when the activity is not on DET's list, or when the clients are in another emirate.

The arithmetic that decides

If most revenue comes from Dubai mainland clients, most income will be taxed at 9% whatever the structure. The free zone 0% then applies to a small slice, and the decision rests on cost, licence scope and convenience rather than on tax.

If mainland clients are occasional and most clients are abroad or in free zones, a Dubai free zone company with the permit is now a clean answer: 0% where the activity qualifies, 9% on the mainland slice, and one company instead of two.

Next step

The calculator gives the first-year cost of a Dubai free zone licence. Send the client mix (abroad, free zone, mainland, individuals) through WhatsApp or the quote form, and the structure that fits it comes back before any payment.