WHAT ARE THE BENEFITS OF FREE ZONE COMPANIES HOLDING A DET PERMIT?
Free zone businesses will be able to expand operations, strengthen local engagement, and build stronger ties with the UAE economy. For investors and business owners, this is an easier way towards business growth without the need for complex restructuring.
WHAT DOES THE DET PERMIT COVER?
The DET permit grants eligible free zone businesses the ability to:
- Carry out specific approved activities within the Dubai mainland without the need to establish a separate mainland company.
- Provide services directly to mainland clients, removing the earlier requirement of working through a local distributor, agent, or partner.
- Expand their presence in Dubai’s mainland market and still benefit from a free zones advantages.
ELIGIBLE ACTIVITIES FOR THE DET PERMIT
Not all business activities qualify under this scheme. DET has outlined a list of professional and service-based activities that free zone companies may extend into the mainland. These include:
- Consultancy services (such as management, IT, legal, and marketing consultancy).
- Creative and design services.
- Technology, software development, and digital solutions.
- Training, education, and professional development services.
- Other specialised professional services, subject to sector-specific approvals.
Note, commercial trading and retail activities are excluded. Businesses that want to sell or trade goods in Dubai mainland must be registered a Dubai mainland entity, or work with a licensed distributor.
DET permit is targeted to support knowledge-based and service-oriented industries, while traditional trading continues to follow mainland business regulations.
KEY BENEFITS OF THE MAINLAND ACTIVITY PERMIT FOR FREE ZONE COMPANIES
The DET permit offer many advantages for free zone businesses looking to expand in Dubai:
- Cost Efficiency: Companies can investigate opportunities in Dubai mainland without the need to set up an additional mainland company.
- Market Expansion: Direct access to clients in Dubai mainland will give businesses the competitive edge.
- Business Continuity: Companies can keep their existing free zone structure while legally doing business in Dubai mainland, ensuring smooth operational continuity.
KEY CONSIDERATIONS WHEN APPLYING FOR THE MAINLAND ACTIVITY PERMIT
All businesses should carefully evaluate several important factors to ensure a smooth and compliant transition into mainland operations:
1. Permitted Activities
DET permit is only issued to those that meet the business activity criteria. Note commercial trading is specifically excluded. We recommend engaging our professional team to assess your business activities and check if they align with your business operations. When was the last time you carried out a business health check or activity review? Ensuring your business activity aligns from the start as it can help avoid any compliance issues.
2. Tax Position
Income generated from Dubai mainland activities can fall within the scope of UAE corporate tax. Free zone businesses need to review how such income may impact their overall tax position. This distinction is important when it comes to corporate tax treatment for free zone entities, as mainland operations could alter the benefits available. To avoid unexpected liabilities, businesses should get professional tax advice to evaluate their exposure, be fully protected and remain compliant.
3. Permit Renewal
The permit must be renewed periodically, within the timeframe set by the DET. As part of the renewal process, businesses must continue to meet the requirements of both the DET and their free zone authority to keep the permit valid (ensure to check rule and regulations as they can change at any given time).
4. Compliance and Financial Requirements
For businesses that fall under this permit they will need to:
- Keep financial accounts for operations conducted on the mainland.
- Adhere to both federal regulations and local legal requirements.
- Be ready and prepared for audits and inspections that may be requested or carried out by the DET and their free zone or authority.
5. Workforce Flexibility.
One key advantage for free zone entities is the option to deploy their current staff for activities on the mainland. Team members who are employed through the free zone can keep their existing employment status and benefits while contributing to mainland operations. This helps businesses maintain smooth operations while keeping costs under control. We recommend No Objection Certificates (NOCs) are in place and to comply with the UAE and free zone labour laws.
TAKE AWAY: FREE ZONE COMPANIES NEW OPPORTUNITIES IN DUBAI MAINLAND
With DET permit allowing free zone companies to perform certain business activities in the Dubai mainland marks a major development in Dubai’s business landscape. It connects and makes it easier for free zone companies to do business directly in the local market and giving companies the ability to engage more directly in Dubai’s commercial ecosystem.
For investors and businesses, DET permit offers business flexibility, growth and the advantage of both free zone benefits and mainland market access. The gives legal clarity, and will boost investor confidence, supporting Dubai’s broader vision of becoming a globally competitive, innovation-driven economy. With new opportunities across Dubai and the UAE, it makes the market even more attractive to international investors.
Now is the time for Dubai companies to reassess their corporate and tax structures, compliance and workforce deployment strategies.
At Creation Business Consultants, we guide businesses throughout the entire process — from checking eligible business activities and getting the necessary approvals from the Department of Economy and Tourism (DET), to reviewing the tax implications and ensuring compliance. Our team helps you every step of the way so you can focus on tapping into a wider market.
As Dubai continues to refine its regulatory environment to encourage international investment, there are more opportunities than ever for businesses to establish, grow, and thrive in the UAE. Get in touch with us today for a comprehensive business and tax review and take the first step towards leveraging this new permit.
For expert guidance on UAE business setup, contact Creation Business Consultants at [email protected] or UAE: +971 4 878 6240.
