How to Convert a Free Zone to Mainland License Dubai Without Losing Your Bank Account

Converting a business license from a free zone company to a mainland license in Dubai is a pivotal step for many entrepreneurs. This adjustment can provide new avenues for business sustainability, including acquiring new customers, winning government contracts, and growing in the long term. 

However, one fear reigns as the main reason that discourages many entrepreneurs from proceeding with this: losing their bank account in the UAE.

The good news is that with the correct legal and banking framework, the conversion from a free zone company to a mainland license in Dubai can be done without problems. Every year, thousands of businesses undergo this transformation without their accounts being frozen and without suffering any banking problems.

This guide includes banking instructions, fee assessments, relevant documents, and step-by-step instructions on how to modify your free zone company to a mainland business in Dubai. 

Comparing Free Zone vs Mainland Business Dubai

Before beginning the conversion process, it is crucial to comprehend the distinctions between free zone and mainland enterprises in Dubai.

Free Zone Business 

A free zone business refers to a company that has been established in a free zone and has been granted a particular set of advantages:

• Quick and easy to establish.
• Complete foreign equity.

Drawbacks:

• Cannot sell to UAE consumers unless a local distributor or permit is obtained.
• Limited access to government contracts.

Mainland Business 

A mainland business refers to a company that has been registered with the Department of Economy and Tourism (DET). 

The top Benefits include:

• Freedom to operate throughout Dubai and also throughout the UAE.
• The ability to deal with local customers and government authorities.
• The ability to establish several branches.

The difference in free zone vs mainland business in Dubai is the primary reason that explains why many businesses decide to change their business structure.

What is the Need for Businesses to switch from a Free Zone to Mainland License Dubai

The reason why businesses prefer free zones initially is convenience and cost-effectiveness. 

However, free zones are not ideal in the long run. The constraints that free zones impose often stifle a business’s growth. 

The reasons why businesses migrate from free zones to mainland licenses in Dubai are:

• Direct sales to UAE consumers.
• Access to government contracts.
• Improved credibility with banks and major customers.
• The desire to grow throughout Dubai and the other emirates.

The business environment in Dubai is rapidly changing, and the need for sustainability and growth is the primary reason why many businesses are moving to free zones.

Can You Convert a Free Zone Company to Mainland Dubai Without Losing Your Bank Account?

Yes, you can convert a free zone company to a mainland license in Dubai without losing your bank account, as long as you follow the correct steps and keep the bank informed. Banks do not automatically freeze accounts because of a license change—they focus on risk and compliance.

To maintain your account safely during the free zone to mainland company conversion Dubai:

• Keep the same company owners.
• Maintain the same business activity.
• Notify the bank early about the transition.
• Submit all KYC updates promptly.

Following these steps ensures bank account continuity UAE business, letting you switch to a mainland license smoothly while keeping your banking operations intact.

Top Legal Measures to Convert Free Zone Company to Mainland Dubai Company

There are several ways to make the move. Choosing the correct method helps protect your bank account.

Open a Mainland Branch (Safest Option)

• Keep your free zone company active
• Open a mainland branch under the same name

Benefits:

• Bank account stays under the same legal entity
• No ownership changes required
• Seen by banks as expansion, not replacement
• Shows stability to banks

DET Permit for Free Zone Companies

Some services allow a DET permit for free zone companies to operate on the mainland.

• Common for service-based businesses
• Keeps the free zone license active while working in the mainland
• Not all activities qualify; professional advice is needed

Complete Conversion From Free Zone to Mainland Company

• Close or transfer the free zone company and create a new mainland entity
• Higher banking risk; may require a new account
• Should only be done when legally necessary and with bank guidance

Steps to Follow to Get a Mainland License from a Free Zone

Step 1: Determine the State of Your Bank Account

• Make sure every transaction is business-related.
• Inform your bank about your transition from the UAE free zone to the mainland.

Step 2: Get a Free Zone NOC

• This is required for the majority of free zones. 
• This states that the Free Zone Authority has no objection to your extension to the mainland.
• This usually takes a couple of business days.

Step 3: Determine the Business Activity on the Mainland

• This has to be the same as, or is to be in support of, the activity in the free zone.
• This is to avoid delays and “non-compliance” issues.

Step 4: Submit Application to the DET

• Apply for the trade name, activity approval and initial approval.
• This starts the free zone to mainland license Dubai process.

Step 5: Finalise Office and Ejari

• Mainland business necessitates the acquisition of an office (flexi desk or physical) 
• Office Ejari must also be obtained.

Step 6: Notify Your Bank and KYC

• Provide the bank with your new license, Ejari and the other approvals.
• This is to keep your bank account active and compliant.

Documents Needed to Convert Free Zone Company into Mainland License

• Trade License from the Free Zone.
• NOC from the Free Zone.
• Shareholders’ Passport Copies.
• Emirates ID photocopies.
• A board resolution for the conversion.
• Trade License from the Mainland.
• Ejari Certificate.
• You may also need other documents depending on the nature of your business.

Detailed Free Zone to Mainland License Cost Dubai

The fees for the trade license from the mainland

• Trade name registration and initial approvals are in the range of AED 10k – AED 15k.

Office Rent and Ejari

• Flexi-desk/shared office: AED 5k – AED 10k per year.
• Private office: AED 15k + per year (Ejari registration included in rent).

Free Zone NOC Charges

• AED 1k – AED 5k varying by free zone authority.

Government & Approval Fees

• AED 2k – AED 5k for some activities.

Professional Service Fees (Optional)

• AED 3k – AED 7k for consultation to help avoid issues with banking/legals.

Estimated Total Cost

AED 15k – AED 30k varying by:

• Business activity.
• Type of office.
• Free zone authority.
• Number of approvals needed.

Cost-Saving Tip:

Maintaining the free zone company and opening a mainland branch can reduce costs and simplify banking.

What is the Timeline for Mainland Company Setup Dubai From Free Zone

• Planning & Free Zone NOC: 5 days.
• DET Initial Approvals: 2–4 days.
• Office/Flexi-desk & Ejari: 5 days.
• License Issuance: 5 days.
• KYC Update for UAE Bank Account: 10 days.

Total Timeframe:

• Smooth cases: 15–25 days.
• Complex cases: 4–6 weeks.

Tip: Keep the free zone company active during the whole process.

How Do Banks View the UAE Free Zone to Mainland Transition?

Banks in the UAE focus on the company’s intent and structure. They like businesses that grow step by step, not suddenly.

A mainland company that sets up in Dubai from the free zone shows stability and maturity when done correctly.

Banks feel more confident when:

• The same owners remain in the company.
• The free zone license is not closed too early.
• The business activity remains the same.
• KYC updates are done promptly.
• This trusted approach helps with long-term banking relationships.

Avoid These Mistakes to Keep Your Bank Account Safe

Many business owners encounter banking issues when transitioning from a free zone to a mainland license in Dubai due to a few simple mistakes:

• Closing the free zone license before notifying the bank.
• Shifting the shareholders during the license conversion.
• Commencing mainland business activity without the necessary approvals.
• The bank’s requests to update KYC are ignored.

Avoiding the above mistakes helps safeguard your bank account and ensures seamless business operations.

Free zone vs Mainland business in Dubai: Which is better?

Free Zone Benefits:

• 100 per cent foreign ownership.
• Fast and easy business setup.
• Focus on international trading.

Free Zone Disadvantages

Limited ability to make sales to UAE customers and a lack of access to government contracts

Mainland Benefits:

• Ability to trade anywhere in Dubai and the UAE.
• Access to local customers and the government.
• The ability to operate additional branches.
• Many companies begin in the free zones and then move to the mainland for growth within the UAE.

Who Benefits From Switching a Free Zone Company to Mainland Dubai?

Change your Free Zone Company to a Mainland License in Dubai for companies that:

• Possess a consistent clientele in the UAE.
• It has the potential to extend operations to Dubai and other emirates.
• Require enhanced banking assistance and seamless transactional processes.
• Seek a partnership with governmental clientele or pursue tenders.
• When companies are prepared to develop within the locality, this modification serves its optimum purpose in fostering enduring operational certainty.

Free Zone to Mainland License Dubai: Which one is the Best Option for You?

• Ideal for businesses targeting the UAE customers, government contracts, or wider commercial licensing.
• Free Zones work if the business plan is predominantly international.
• Think about your goals and business vision before making the change.

Pro Tip: For an even smoother experience, hire a professional from PRO Services in Dubai who has 12+ years of experience. They are the top licensed business setup consultants in Dubai, helping individuals with their businesses.

FAQs

Q1: Can I keep my UAE bank account open when I convert from a free zone to the mainland?

Yes. Banks typically permit your account to remain open if the same owners remain, the business activity is the same, and KYC is updated punctually. With the proper measures, bank accounts continuity business in the UAE is assured. 

Q2: Is a new trade license required when switching from a free zone to a mainland license in Dubai?

Yes. A new mainland license Dubai is required from the Department of Economy and Tourism (DET). You can keep the same business name and activity if it matches regulations.

Q3: What is the duration of the process for converting a company from a free zone to a mainland company in Dubai?  

The duration of this process in Dubai is between two to six weeks. However, this duration is subject to the approvals, the office setup, and the readiness of the documents. In uncomplicated cases, the duration can be as short as 15 to 25 days if all the paperwork is completed.

Q4: Is the free zone NOC required for the mainland conversion?  

Yes. The free zone NOC for mainland license states that your current free zone authority does not have any objections to your conversion, and this is required to streamline the process.

Q5: When converting to the mainland, can I adjust my business activity?  

Typically, your business activity should remain the same. However, banks and the Department of Economic Tourism (DET) would prefer there to be consistency. In regard to the Dubai mainland license, having the activity consistent streamlines the process and mitigates any potential banking issues.

Conclusion 

For businesses with the aim of expansion within the UAE, converting a free zone company to a mainland license in Dubai is a highly beneficial step. Businesses can access a new range of customers, government contracts, and banking services.

Careful planning accomplishes a smooth conversion from a free zone to a mainland company in Dubai. Stay with the same owners, keep the business activity the same, obtain necessary approvals, and update the KYC for the UAE bank account. Your bank account is guaranteed to stay active by following the correct Dubai mainland license process. 

This move enhances business credibility, and also strengthens long-term growth, and optimises opportunities in the ever-growing Dubai market, whether it is a mainland branch, DET permit, or full conversion.

Contact PRO Services in Dubai for more help!