The DED is the government agency in charge of giving all permits to corporate entities or people that want to do business in Dubai’s mainland, which is the part of the city that is not part of the Dubai free zones.
In order to make doing business in Dubai easier, the Dubai Economic Department has been updating its rules and regulations to act as a one-stop shop for all mainland licences, easing the licencing process for investors.
In reality, when compared to most free zones, even those that have a very well-organized and friendly environment without being overly limiting, the DED provides exceptional and quick services.
The purpose of this article is to explain how to conduct business on the mainland of Dubai using a company registered in one of the UAE’s free zones. Since His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Prime Minister of the UAE, Vice-President and Head of Dubai, published Law No. 13 of 2011 to regulate economic activities for licences to be given by the DED, there has been some uncertainty. Some people incorrectly believed that Law No. 13 of 2011 allowed free zone entities to conduct business outside of the free zone without first getting a licence from the DED. As we’ll see below, this isn’t totally accurate.
A new regulation was passed in 2011 to make it easier for companies doing business in freezone to operate branches in Dubai.
Using a free zone entity to open a branch with the DED
Unless a firm registered with a free zone in Dubai obtains an appropriate licence from the local authorities, i.e. the DED, most, if not all, free zones in Dubai do not allow a company registered with a free zone to conduct business outside of the free zone on the mainland of Dubai.
Furthermore, the DED is the sole entity authorised for issuing licences outside of the free zones, according to Law No. 13 of 2011. According to the law, no one may conduct economic activities in Dubai outside of the free zones unless they do so through a DED-licensed corporate company. A punishment of up to AED 100,000 can be imposed on anyone who breaks the law’s requirements.
Civil work company, limited liability company, and branch are the most prevalent legal structures for free zone entities to conduct business in Dubai. The civil work company can be founded to carry on professional activities.