The UAE has taken a decisive step towards building a more flexible and integrated business ecosystem by opening its mainland to free zone companies through sweeping changes to its Commercial Companies Law. The reform removes long-standing structural barriers and allows companies to expand, relocate, or restructure within the country without shutting down or losing their legal identity.
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Breaking the Free Zone–Mainland Divide
Historically, companies operating from UAE free zones faced significant hurdles when attempting to move to or operate on the mainland. Businesses were often required to liquidate their existing entities, cancel licences, and reincorporate as new mainland companies resulting in loss of operational history, contracts, and continuity.
The amended law fundamentally changes this approach. Companies can now transfer their registration between free zones and the mainland without liquidation, preserving their legal identity, contractual obligations, and corporate track record. This marks a major shift towards business continuity and ease of expansion.
Seamless Expansion Across the UAE
Under the new framework, free zone companies are permitted to establish branches or representative offices on the mainland, subject to approval from the relevant licensing authorities. This allows businesses to access the wider UAE market while maintaining their existing free zone structure, offering greater operational flexibility and reduced compliance costs.
The reform is particularly beneficial for professional services firms, technology companies, consultancies, and holding companies seeking nationwide reach without undergoing complex restructuring.
A Modern Corporate Law Framework
As part of the overhaul, the UAE has also introduced multiple share classes, aligning its corporate governance framework with global best practices and making it more attractive for startups, venture capital, and international investors.
In addition, a new legal model non-profit commercial companies has been introduced. These entities operate commercially but reinvest profits into their mission rather than distributing dividends. The model is designed to support sectors such as education, healthcare, innovation, sustainability, and social impact, reflecting the UAE’s evolving economic priorities.
Economic Impact and Growth Outlook
The Ministry of Economy expects the reforms to drive a 10–15 per cent increase in company registrations in the first year of implementation. The changes support the UAE’s broader ambition of reaching two million registered companies by the end of the decade, reinforcing its position as a leading global business and investment hub.
The reform also complements the country’s strong economic performance, with continued growth in non-oil sectors and rising foreign direct investment.
Strengthening the UAE’s Business Competitiveness
By enabling companies to relocate and expand without disruption, the UAE has removed one of the most significant operational barriers faced by long-established firms. The move signals a clear policy direction: encouraging long-term business presence, corporate mobility, and investor confidence.
The opening of the mainland to free zone companies reflects the UAE’s commitment to modern, agile, and globally competitive business regulation. For companies operating in or entering the UAE, the reform offers greater freedom to grow, restructure, and innovate without compromising continuity.
As the country continues to refine its legal and economic framework, this landmark change positions the UAE as one of the most business-friendly jurisdictions in the world
