Dubai announces new rules for Free Zone companies to boost business growth

Post by: Omar Nasser

Dubai has made a new rule to help free zone companies do business in more parts of the city. The goal is to make it easier for these companies to grow and bring more business to Dubai.

Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, announced this rule as the head of Dubai’s Executive Council. It says that free zone companies can now work outside their zones, but they need to get a permit from the Dubai Department of Economy and Tourism (DET). However, banks and financial companies in the Dubai International Financial Center (DIFC) do not have to follow this rule, as they have their own rules.

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Free zone companies that want to work outside their zones must follow all local and federal laws. They must also keep separate financial records for their work inside and outside the free zone. If they want to do business outside Dubai, they must get special permits from the correct authorities.

The Dubai Media Office said this rule will make it easier for free zone companies to grow into mainland Dubai. The DET will handle the licensing and will give free zone companies permission to open branches or do certain activities outside their zones. These licenses will last for one year and can be renewed. Within six months, the DET will also share a list of the types of business activities that free zone companies can do in mainland Dubai.

The rule also explains the steps for getting a license, the rules for permits, and the conditions for hiring staff. Free zone companies working outside their areas will be checked to make sure they follow the rules.

This plan is part of Dubai’s bigger goal, called the D33 agenda. This plan aims to double Dubai’s economy to AED 32 trillion ($8.71 trillion) by 2033. The goal is to make Dubai one of the world’s top three cities, boost its economy, and attract more business. The plan also aims to help 30 private companies become "unicorns," which means their value will be over $1 billion by 2033.

Dubai’s economy grew by 3.1% in the first nine months of last year, reaching AED 339.4 billion. This growth was driven by trade, transport, and finance. Dubai also became the world’s top city for new foreign investment projects for the fourth year in a row. In 2023, Dubai brought in 1,117 new investment projects worth over AED 52.3 billion—a 33.2% increase from the previous year.

Experts believe this new rule will make Dubai more attractive to businesses. Paul Bryson, managing director of Virtuzone, which helps companies set up in Dubai, said the new rule will make it simpler for free zone companies to expand.

He added that before this, free zone companies could open branches in mainland Dubai, but they faced limits on certain activities, especially trading physical goods. Bryson believes the next step should be allowing companies to move freely between different UAE zones, making business even easier.

With this new rule, Dubai hopes to attract more companies and strengthen its position as a top global business hub.

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