VAE dual licensing

Dual licensing is an arrangement through which a company registered in a VAE Freizone receives additional authorisation to conduct specified activities outside that Freizone.

The company retains its original Freizone registration while obtaining a Mainland Lizenz, branch Lizenz or activity-specific permit from the relevant Mainland authority. The legal structure and permitted scope depend on the programme being used.

Dual licensing does not necessarily mean that two separate companies are created. In many cases, the Mainland authorisation is connected to the existing Freizone legal entity. A licensed branch generally does not have a legal personality independent of its parent Freizone company.

The term "dual Lizenz" is often used broadly in the market, but several legally different arrangements may be involved:

It is therefore important to identify the exact authorisation being offered instead of relying only on the label "dual Lizenz."

Yes, an eligible Freizone company may legally operate in the Mainland when it obtains the Lizenz, permit or other approval required by the competent Mainland authority.

A standard Freizone Lizenz primarily authorises the company to operate within the scope of the issuing Freizone. It should not be assumed that the Lizenz alone permits the company to establish Mainland premises, perform regulated work at Mainland locations, open a retail outlet or undertake every form of direct local trading.

The appropriate route may include:

The right solution depends heavily on the business model. A consultancy performing short-term projects may need a different structure from a retailer, construction contractor, medical provider or goods importer.

No. The VAE does not have one universal Mainland permit that automatically authorises a Freizone company to operate in every emirate.

Economic licensing is administered through the competent Behörden of the respective emirates, alongside the relevant Freizone authority and any federal or local sector regulator.

A permit issued by Dubai's Wirtschafts- und Tourismusbehörde concerns activities conducted outside Dubai free zones but within the Emirate of Dubai. If the company intends to establish permanent operations in Abu Dhabi, Sharjah or another emirate, it may need authorisation from the competent authority in that jurisdiction.

This distinction is especially important for companies with clients across the VAE. Serving a customer in another emirate does not always mean that the company has established a regulated operational presence there. However, opening premises, assigning staff permanently, operating a shop or facility, or performing an activity requiring local supervision can trigger additional licensing requirements.

Dubai Executive Council Resolution No. 11 of 2025 created a formal framework for establishments registered in Dubai free zones that want to perform activities outside their free zones and within Dubai.

The Resolution does not apply to financial establishments licensed to operate in the Dubai International Financial Centre. DIFC entities and regulated financial businesses are governed by separate rules and should obtain specialised advice before undertaking activities outside their licensed jurisdiction.

Under the Resolution, the Dubai Wirtschafts- und Tourismusbehörde may authorise an eligible Freizone establishment through one of three routes:

Each route has a different purpose, validity period, cost and operational effect.

A Freizone company may apply to establish a branch with a physical location in Mainland Dubai.

The branch is legally connected to the Freizone parent company. Under the Dubai Resolution, it does not have a separate legal personality and is not considered independent from its parent.

Eligibility generally requires:

Premises-related costs, tenancy registration, external approvals and ordinary licensing charges may apply depending on the activity and location.

Dubai's framework also permits DET to issue a branch Lizenz that allows the Freizone establishment to conduct approved Mainland activities while operating from its existing Freizone location.

This may be attractive to businesses that require ongoing Mainland access but do not need a second physical office.

The official Resolution prescribes an annual fee of AED 10,000 for issuing or renewing this type of branch Lizenz. This amount should not be treated as the entire cost of the arrangement. The company may also incur Freizone approval fees, documentation costs, activity charges, external-approval costs and professional fees.

The application may require:

The licensed activities must remain within the scope approved by the Behörden. The branch cannot use its Mainland authorisation to undertake unrelated activities.

An eligible Dubai Freizone company may apply for a temporary permit to undertake specified activities within Mainland Dubai.

Under Executive Council Resolution No. 11 of 2025, the temporary permit may be valid for a period not exceeding six months. The official fee for issuing or renewing the permit is AED 5,000.

Dubai subsequently launched the Freizone Mainland Operating Permit framework in cooperation with the Dubai Freizone Council. Eligible companies holding a Dubai Unified Lizenz can apply through the Invest in Dubai platform.

The actual activity list and applicant eligibility must be checked at the time of application. The inclusion of a general activity category does not guarantee that every activity within that category will qualify.

Businesses requiring permanent premises or continuous Mainland operations may find a branch Lizenz more appropriate.

Abu Dhabi also offers an official Dual Lizenz through the Abu Dhabi Department of Economic Development.

ADDED describes this Lizenz as allowing establishments registered in Abu Dhabi free zones to conduct their activities and manage their businesses outside the Freizone.

The programme can help qualifying companies access the Abu Dhabi Mainland while retaining their Freizone presence. However, the exact permitted activities, required approvals, premises position and supporting documents must be confirmed through ADDED and the applicable Freizone.

The availability of a Dual Lizenz in Abu Dhabi does not mean that a Dubai, Sharjah or other non-Abu Dhabi Freizone company automatically qualifies for the same route. Eligibility is connected to the issuing authority's rules.

Which Freizone Companies May Qualify?

A company should obtain confirmation from both the Freizone authority and the Mainland licensing authority before making contractual or operational commitments.

Are All Business Activities Eligible?

No. Dual licensing does not automatically cover every business activity.

The competent Mainland authority determines which activities may be performed under a temporary permit, branch Lizenz or other form of authorisation. Some activities are non-regulated and relatively straightforward, while others require approvals from specialist regulators.

Activities that may require additional review include:

The business activity on the Mainland authorisation should align with the company's Freizone Lizenz and constitutional documents. If the proposed Mainland activity is materially different, the company may first need to amend its Freizone Lizenz.

Potentially, yes. Dubai's Freizone Mainland Operating Permit was introduced with domestic trading among its intended commercial uses. Nevertheless, trading goods raises additional issues beyond the business permit itself.

A company may need to consider:

A Mainland operating permit should not be treated as a substitute for customs clearance or product approval.

Dubai Customs states that a Lizenz holder involved in customs activities must obtain a Customs Business Code and submit the appropriate declaration for the relevant movement of goods.

It can, but only when the relevant retail activity and premises are specifically authorised.

Operating a physical shop, showroom, food outlet, clinic or customer-service centre can require more than general permission to work with Mainland clients. Premises may need to satisfy:

Where a permanent retail location is required, a Mainland branch with approved premises may be more suitable than a temporary activity permit.

Dubai's Freizone Mainland Operating Permit was introduced partly to expand access to government tenders and domestic contracts. An eligible permit may therefore help a Freizone company participate in procurement opportunities that require Mainland operating authority.

However, the permit does not guarantee tender eligibility or contract award. Each purchasing body may impose separate requirements relating to:

The company should review the tender documents before choosing a licensing route.

Under Dubai Executive Council Resolution No. 11 of 2025, an establishment authorised under the framework may engage its existing workforce registered through the Freizone portal and continue benefiting from the applicable Freizone employment privileges.

This is a useful feature of the Dubai framework because it may avoid the need to create an entirely separate workforce merely to undertake approved Mainland activities.

It does not remove the company's other responsibilities. The employer must continue to comply with applicable employment, immigration, health and safety, insurance, site-access and professional-qualification requirements.

Certain projects or regulated premises may require additional employee permits, professional cards or site approvals.

"Operating on the Mainland" is too broad for licensing purposes. The application should clarify whether the company will provide consultancy, trade goods, open premises, perform project work, participate in tenders or establish a permanent branch.

Determine where the activities will physically and commercially take place.

A Dubai permit concerns activities within Dubai. Operations in another emirate may require authorisation from that emirate's competent authority.

Check whether the proposed Mainland activity is already included in the Freizone Lizenz and constitutional documents.

If the activities do not align, an amendment may be necessary before applying for Mainland authorisation.

Confirm whether the activity qualifies for:

Do not assume that a general category such as "consultancy" or "trading" includes every activity within that category.

Apply for the required approval or no-objection certificate from the Freizone licensing authority.

The Freizone may review the company's Lizenz status, Compliance record, facilities, proposed activity and constitutional documents.

If the activity is regulated, obtain the necessary approvals from the competent regulator.

The Mainland authority may not issue the final Lizenz or permit until these approvals are available.

Choose between a temporary permit and a branch Lizenz based on the operational model.

A temporary permit may suit limited or trial operations. A branch Lizenz may be better for permanent activity, ongoing contracts or premises-based operations.

Compile the company, manager, shareholder and approval documents. Ensure names, Lizenz numbers, activities and ownership information are consistent across all records.

Eligible Dubai applicants may use the Invest in Dubai platform. Other applications may be submitted through the competent economic department or its service channels.

Pay the authority fees and any additional charges imposed by the Freizone, regulator or service provider.

Check the issued document carefully, including:

Create separate records for Mainland activities where required. Update invoicing, contracts, tax coding and internal approval processes before beginning operations.

How Much Does a Mainland Permit Cost?

AED 10,000 per year for issuing or renewing a branch Lizenz operating from the Freizone

These figures relate to the specified DET authorisations. They may not represent the complete cost of becoming operational.

Additional expenses can include:

The fee for a conventional branch with physical Mainland premises depends on the applicable licensing and premises requirements.

CTA: Request a tailored cost assessment based on your Freizone, activities and intended Mainland operations.

How Long Does the Application Take?

The timeline depends on:

A straightforward application for an eligible non-regulated activity may be processed more efficiently than a branch requiring premises, regulatory approval or technical inspection. Companies should avoid committing to a project start date until the relevant authorisation has been issued.

Dual licensing can affect the Körperschaftsteuer treatment of a Freizone company.

A Freizone entity is not automatically exempt from Körperschaftsteuer. A company seeking the zero-percent rate available to a Qualifying Freizone Person must satisfy all applicable conditions, including requirements relating to qualifying income, adequate substance, transfer pricing, audited financial statements and the de minimis limit for non-qualifying revenue.

Income attributable to a Mainland or domestic permanent establishment may not receive the same treatment as qualifying Freizone income. The structure of the Mainland operation, personnel, premises, contracts and revenue-generating functions should therefore be reviewed before the company applies for a permit or branch Lizenz.

Dubai's 2025 Resolution expressly requires separate financial records for activities conducted outside the Freizone and within Dubai. This distinction supports regulatory and tax transparency, but accounting separation alone does not determine whether income qualifies for a particular Körperschaftsteuer rate.

The company should assess:

A licensing decision should not be made without considering its tax consequences.

Freizone companies are subject to the VAE MwSt legislation. Merely operating in a Freizone does not create a general MwSt exemption.

A business must generally register for MwSt when its taxable supplies and imports exceed the mandatory threshold of AED 375,000. Voluntary registration may be available when taxable supplies, imports or qualifying expenses exceed AED 187,500.

MwSt treatment depends on:

The movement of goods from a MwSt Designated Zone into Mainland VAE is generally treated as an import. Import MwSt may therefore become payable by the importer, followed by the MwSt treatment applicable to any subsequent Mainland sale.

A Dubai Freizone establishment authorised to operate in Mainland Dubai must maintain separate financial records for the activities it conducts outside the Freizone.

The company should establish accounting controls that identify:

Contracts and invoices should identify the correct entity and authorisation. Using inconsistent trade names, Lizenz details or tax-registration information can create problems during audits, customer onboarding and payment processing.

A Mainland permit or branch Lizenz may strengthen the commercial documentation available to a Freizone company, but it does not guarantee bank-account approval.

The bank may request:

If a separate branch account or merchant facility is required, the bank will determine whether it can be opened under the existing legal entity and customer profile.

Does the Mainland Branch Have Separate Legal Personality?

Under Dubai's 2025 Resolution, a branch licensed within Mainland Dubai or a branch operating from the Freizone does not have a separate legal personality and is not considered independent of its parent company.

The Freizone company remains responsible for the branch's contracts, liabilities and regulatory obligations. This differs from forming a separate Mainland subsidiary, which has its own legal personality.

The absence of separate legal personality can simplify ownership but also means that liabilities arising from branch operations may affect the parent company directly.

A separate Mainland company may be preferable when:

The least expensive structure at the beginning is not always the most efficient long-term structure.

A goods-trading Freizone company may sometimes access the local market through a licensed Mainland distributor rather than obtaining its own Mainland authorisation.

A distributor arrangement may be suitable where:

Direct Mainland authorisation may provide greater control over customers, pricing and operations. However, it also creates additional licensing, customs, tax and Compliance responsibilities.

The commercial agreement should clearly define responsibility for importation, customs duties, MwSt, product registration, returns, warranties and consumer complaints.

A dual-licensed company must maintain both sides of its regulatory structure.

Typical continuing obligations include:

A temporary permit should not be allowed to expire while the company continues Mainland operations. Operating outside the authorised period or activity scope may expose the business to penalties and contractual risk.

A Freizone Lizenz alone does not automatically authorise every Mainland activity. The company should confirm the legal route before beginning local operations.

A temporary permit may be insufficient for a permanent shop or facility. Conversely, a full Mainland branch may be unnecessarily costly for a limited project.

The activity on the Mainland application must correspond with the company's existing Freizone activities and the authority's eligible list.

A general permit does not replace approvals required for healthcare, engineering, education, food, financial services or another regulated field.

Dubai's framework requires separate records for Mainland activities. Inadequate accounting can create licensing and Körperschaftsteuer complications.

An authorisation to operate within Dubai does not automatically grant operating rights in every other emirate.

A business permit does not replace customs declarations, product registration, conformity assessment or import approval.

Temporary permits and branch licences have defined validity periods. Renewal planning should begin before expiry.

A Dubai Freizone technology consultancy wants its employees to work periodically at customer offices. If its activity is eligible, a temporary Mainland operating permit may provide an efficient route without requiring a second permanent office.

If the company expects continuous Mainland work and recurring tenders, a branch Lizenz operating from the Freizone may offer greater continuity than repeated temporary permits.

A Freizone company planning a permanent retail outlet is likely to require a branch or another Mainland structure with approved premises. A temporary professional-services permit may not meet the operational requirements.

The company must assess its Mainland trading authority, customs registration, importer-of-record arrangement, product approvals, MwSt treatment and logistics. A permit alone does not complete the import and distribution framework.

A Dubai Freizone company that wants permanent operations in Abu Dhabi must check the licensing requirements of Abu Dhabi's competent authority. Its Dubai permit cannot simply be extended across the VAE.

Before applying, confirm that:

KPM Global Services can help an existing or proposed Freizone company evaluate the most appropriate route into the Mainland market.

Every application remains subject to the decisions of the relevant Freizone, economic department and sector regulator. KPM Global Services does not guarantee government, banking or regulatory approval.

No. Eligibility depends on the emirate, Freizone, legal form, business activity and applicable Mainland-licensing programme. Approval from the Freizone authority and the Mainland authority may be required.

Yes, an eligible company may apply for a Mainland branch Lizenz or temporary permit under Dubai's applicable framework. It cannot assume that its original Freizone Lizenz alone is sufficient.

3. What is Dubai's Freizone Mainland Operating Permit?

It is a Mainland-access framework that allows eligible Dubai Freizone companies holding a Dubai Unified Lizenz to apply to perform approved activities in Mainland Dubai.

Executive Council Resolution No. 11 of 2025 allows DET to issue a temporary permit valid for no more than six months. It may be renewable subject to the prevailing conditions.

The Resolution prescribes AED 5,000 for issuing or renewing the temporary permit. Freizone approvals, activity amendments, regulatory approvals and professional services may cost extra.

The prescribed DET fee is AED 10,000 per year for issuing or renewing this branch Lizenz. Additional government, Freizone and Compliance costs may apply.

Not always. A branch operating from the Freizone may use the existing Freizone location where permitted. A conventional Mainland branch or premises-based activity may require a Mainland office, shop or facility.

The Dubai Resolution requires approval from the relevant Freizone licensing authority. The authority may issue an NOC or another form of approval according to its procedures.

Dubai's 2025 Resolution permits an authorised establishment to engage its existing workforce registered through the Freizone portal. Other employment, professional and site-specific rules still apply.

Potentially, if the trading activity is eligible and included in the permit or Lizenz. The company may additionally need customs registration, product approvals, import documentation and MwSt Compliance.

No. A Dubai authorisation applies within Dubai. Activities conducted in another emirate may require approval from that emirate's competent authority.

Yes. ADDED officially offers a Dual Lizenz for eligible establishments registered in Abu Dhabi free zones that want to conduct approved activities outside their free zones.

A suitable Mainland authorisation may allow participation in eligible tenders, but each government entity maintains its own supplier-registration and procurement requirements. Contract awards are not guaranteed.

It may. Income attributable to Mainland operations may not qualify for the zero-percent treatment available to a Qualifying Freizone Person. The effect depends on the structure, activity, income and Compliance with Körperschaftsteuer conditions.

Dubai's Resolution requires separate financial records for activities conducted outside the Freizone and within Dubai. The company should be able to distinguish Mainland revenue, costs, assets and tax treatment.

A Dubai branch licensed under the 2025 Resolution does not have a legal personality independent of its Freizone parent. A separately incorporated Mainland subsidiary would be a distinct entity.

Regulated activities may be excluded from a simplified permit or may require approval from the relevant sector regulator. Eligibility must be checked for the exact activity.

Only if the chosen route, approved activity and premises satisfy all applicable licensing conditions. A permanent retail outlet may require a Mainland branch, approved tenancy and additional municipal or sector approvals.

It depends on the business model. A permit offers more direct operational control, while a distributor may handle importation, logistics and local sales. Costs, responsibilities and customer ownership should be compared carefully.

The Mainland authorisation normally depends on the underlying Freizone Lizenz remaining valid. Failure to renew the Freizone Lizenz can affect the company's continued eligibility to conduct Mainland activities.