A company based in the Jebel Ali Free Zone. Or JAFZA will enjoy an excellent position for importing. Exporting. Warehousing and regional distribution. But many business owners will eventually want to go beyond international trade. Also sell directly to customers across Dubai. Or the wider UAE.
Can a JAFZA company do business in mainland UAE?
Yes. A JAFZA company will conduct business in mainland markets. But it must follow the correct licensing. Customs and tax procedures. In Dubai. Recent regulatory changes have made mainland expansion more accessible. For eligible free-zone companies. A JAFZA licence alone will not automatically authorise every type of activity throughout the UAE.
The correct route will depend on what the company sells. Where the customer is located. Whether goods enter the mainland, and whether the business needs a physical mainland presence. Get details on Business Setup in Dubai.
What Does “Mainland UAE” Mean?
The term mainland UAE generally refers to areas located outside designated free zones. In Dubai, mainland companies receive their economic licences through the Dubai Department of Economy and Tourism, commonly known as DET.
A mainland company will usually trade directly. With consumers, private businesses. Also government entities across the UAE. This is subject to its approved activities. A JAFZA company will operate primarily under the authority and regulations of the Jebel Ali Free Zone.
However, this distinction does not mean that a JAFZA company must avoid mainland customers. Instead, it means the company must select an approved commercial route.
Can a JAFZA Company Operate in Mainland Dubai?
Yes. In March 2025. Dubai introduced a regulatory framework. Allowing companies licensed in Dubai free zones. To conduct approved activities. Outside their free zones. Also within mainland Dubai.
Under Executive Council Resolution No. 11 of 2025. An eligible free-zone establishment. This may operate in mainland Dubai. After obtaining the required licence or permit from DET. The company must comply with the federal and local rules governing its activity.
The available routes can include:
- Establishing a mainland branch
- Establishing a branch that operates from the free-zone headquarters
- Obtaining a permit to carry out specified mainland activities
So a JAFZA business will no longer need to assume. Creating a completely separate mainland company will be its only expansion option. Looking to Register a Company in JAFZA Free Zone?
What Is the Free Zone Mainland Operating Permit?
In October 2025. Dubai launched the Free Zone Mainland Operating Permit. To give eligible free-zone companies a more flexible entry into mainland Dubai.
During its initial phase. The permit covered certain non-regulated activities. This includes professional services. Technology. Consultancy. Design and trading. The permit was introduced with a six-month validity period. Also a fee of AED 5,000, renewable for the same period and fee.
The permit can suit a JAFZA company. That wants to test the mainland market. Before opening a permanent branch. Additionally, eligible businesses may use their existing staff for the permitted mainland operations rather than immediately creating a separate workforce.
However, businesses should confirm whether their exact activity appears on DET’s eligible activity list. Regulated sectors may still require approvals from other authorities.
Main Ways a JAFZA Company Can Serve Mainland Customers
|
Business route |
How it works |
Suitable for |
|
Mainland operating permit |
Allows specified mainland activities for a limited period |
Market testing and selected activities |
|
DET-licensed branch |
Creates an authorised mainland operating presence |
Long-term mainland expansion |
|
Free-zone-headquartered branch |
Operates under a DET licence while retaining the JAFZA base |
Companies keeping their main operations in JAFZA |
|
Mainland distributor |
An authorised mainland business imports or distributes products |
Product manufacturers and overseas traders |
|
Direct business-to-business supply |
Goods or services are supplied under an approved legal structure |
Wholesale and corporate transactions |
|
Separate mainland company |
Owners establish a new mainland legal entity |
Independent or large-scale UAE operations |
The best option depends on the commercial model. For instance, a consulting company may need a mainland activity permit, while an importer of consumer products may need customs clearance and a mainland distribution arrangement.
Can a JAFZA Company Sell Goods in Mainland UAE?
A JAFZA trading company can sell goods into the mainland. But goods leaving the free zone can enter the UAE customs territory. Consequently, customs procedures and import duties may apply.
Goods stored inside a free zone generally remain outside the mainland customs market until they leave the zone. Once those goods move into the local UAE market, customs authorities treat them as imported goods. Applicable customs duty, VAT, import documentation and product approvals may therefore become payable or required.
UAE customs legislation states that goods taken from free zones into local markets are subject to the customs tariff in force at that time.
A typical transaction may involve:
- A JAFZA company selling goods to a mainland customer
- A customs import declaration
- An importer of record
- Payment of applicable customs duty
- UAE VAT treatment
- Product registration or conformity approvals, where relevant
- Delivery after customs clearance
For example, a JAFZA electronics trader can store imported products in a JAFZA warehouse. However, before delivering the products to a retailer in Dubai, the shipment must complete the required mainland import and customs process. Get details on Certificate Attestation in Dubai.
Does the JAFZA Company Need a Mainland Distributor?
Not every transaction requires a distributor. However, a mainland distributor or importer can provide a practical solution when the JAFZA company does not want its own mainland branch.
Under this model, the JAFZA company sells products to an authorised mainland business. The mainland company then handles customs clearance, local distribution and sales to end customers.
This arrangement may suit companies that:
- Have limited mainland sales
- Primarily focus on re-export markets
- Do not need a mainland office
- Prefer an established local sales network
- Sell regulated or specialised products
- Want to avoid creating another operating entity immediately
Nevertheless, the commercial agreement should clearly define pricing, product ownership, customs responsibility, payment terms, warranties and territorial rights.
Can a JAFZA Company Provide Services on the Mainland?
A JAFZA company may provide services to mainland clients, but the nature and location of the work matter.
For example, a JAFZA consultancy may sign a contract with a Dubai mainland company. However, if its employees regularly perform the licensed activity from a mainland office or customer site, the company may need a DET permit, branch licence or other approval.
The 2025 Dubai framework. It specifically allows free-zone companies to apply for licences. Or permits to conduct approved activities in mainland Dubai. But the company must maintain a valid free-zone licence. Also obtain prior approval from its free-zone licensing authority where required.
A permit for Dubai does not automatically cover Abu Dhabi. Sharjah or the other emirates. To operate outside Dubai. The company must follow the licensing rules of the relevant emirate. Looking for a Product Registration Service in Dubai?
Mainland Branch vs Separate Mainland Company
A mainland branch does not usually have a separate legal personality from its JAFZA parent. Therefore, the parent company remains responsible for the branch’s activities and obligations.
A separate mainland company, on the other hand, becomes an independent legal entity with its own licence, ownership records, accounts and operational responsibilities.
|
Factor |
Mainland branch |
Separate mainland company |
|
Legal identity |
Part of the JAFZA parent |
Separate entity |
|
Ownership |
Follows the parent structure |
Can have its own shareholders |
|
Activity scope |
Usually linked to parent activities |
Based on its own approved licence |
|
Accounting |
Separate mainland records still required |
Full independent accounting |
|
Liability |
Generally remains with the parent |
Usually limited to the new entity |
|
Best suited for |
Extending an existing JAFZA business |
Creating an independent UAE operation |
Corporate Tax on Mainland Business
A JAFZA company should not assume that all mainland revenue qualifies for the free-zone 0% corporate tax rate.
A Qualifying Free Zone Person may benefit from a 0% corporate tax rate on qualifying income. However, mainland business can create non-qualifying income, depending on the customer, activity and transaction structure. The standard UAE corporate tax rate may apply to taxable non-qualifying income.
Dubai’s Free Zone Mainland Operating Permit framework also states that companies must maintain separate financial records for mainland activities. Furthermore, the Dubai announcement explains that revenue linked to permit-based mainland operations is subject to 9% corporate tax.
Therefore, companies should separately track:
- Free-zone revenue
- Mainland revenue
- Qualifying and non-qualifying income
- Customs expenses
- VAT transactions
- Related-party charges
- Branch income and expenses
Proper accounting matters because a failure to meet free-zone tax conditions can affect the company’s overall corporate tax position.
Related Services:
» Company Liquidation in Dubai
» Dubai Mainland Company Registration
What Should a JAFZA Company Check Before Mainland Expansion?
Before starting mainland operations, the company should confirm:
- Whether its JAFZA activity matches the proposed mainland activity
- Whether DET currently allows that activity under a permit
- Whether a temporary permit or permanent branch offers better value
- Whether goods require customs clearance
- Who will act as the importer of record
- Whether the product requires municipality or regulatory approval
- How mainland income will affect corporate tax
- Whether separate VAT or accounting procedures are necessary
- Whether activities extend beyond Dubai into other emirates
A written review of the transaction model can prevent licensing and tax problems later.
Related Articles:
» Setup & Register an Accounting and Bookkeeping Company in Dubai
» Setup & Register a Tax Consultancy Company in Dubai
» Register & Set Up a Packaging Manufacturing Company in Dubai
» Audit-Ready Bookkeeping in Dubai, UAE: Navigating the Removal of VAT Self-Invoicing
Can JAFZA Companies Trade on the Mainland?
Yes. A JAFZA company can do business in mainland UAE. But the process will depend on the activity.
For mainland Dubai operations, eligible companies may apply for a DET branch licence, a licence linked to their free-zone headquarters or a permit covering specific activities. Meanwhile, companies selling physical goods must complete the applicable customs and import procedures when stock moves from JAFZA into the mainland.
Therefore, the company should not begin regular mainland operations based only on its JAFZA licence. Instead, it should select a legally approved route that matches its products, services, customers and long-term expansion plans.
GrowthX can help investors compare a mainland permit, branch, distributor arrangement or separate mainland company before they commit to a structure.
FAQs: Can a JAFZA Company Do Business in Mainland UAE?
Yes, but the company must use an approved mainland trading route. Physical goods entering the mainland also require customs clearance, an import declaration and payment of applicable taxes or duties.
A JAFZA company that regularly conducts activities in mainland Dubai will generally need an appropriate DET licence or permit. The exact requirement depends on the activity and operating model.
Yes. Dubai’s 2025 framework allows eligible free-zone companies to apply for a mainland branch licence, subject to DET approval, JAFZA approval and any sector-specific requirements.
Not automatically. A Dubai mainland licence. Or permit will cover activities authorised within Dubai. The company should obtain any required approvals. From the relevant authorities. Before operating in another emirate.
Not necessarily. A qualifying free-zone company may receive a 0% corporate tax rate on qualifying income, but mainland or non-qualifying income may face the standard 9% corporate tax rate.
