Topic Summary
1. Benefits of Moving
It removes the AED 10,000-25,000 annual local agent fee, grants 100% foreign ownership, and lightens compliance compared with a mainland LLC structure.
2. The Mainland Trading Trade-Off
A free zone entity cannot sell directly to UAE mainland customers and must use a licensed distributor or a registered branch, with a 5% import duty on goods entering the mainland.
3. Three Restructuring Approaches
Adding Dubai South as a parallel entity is most common, full migration suits service businesses, and using it as a holding company above the mainland entity suits investment or exit planning.
4. Services vs Product Traders
Consulting, IT, and advisory firms can contract with mainland clients and route international revenue through the free zone at 0% qualifying tax, unlike goods-based businesses.
5. Entity Separation for Tax
Qualifying income sits at 0% while mainland-sourced income is taxed at 9%, so financials must be kept separate and VAT registration applies above AED 375,000.
In 2026, UAE free zones issued over 40,000 new business licenses, with a growing share coming from mainland companies restructuring to cut costs and gain full ownership (Dubai Department of Economy and Tourism, 2026). Local agent fees on the mainland run AED 10,000 to AED 25,000 per year. Corporate tax at 9% applies to non-qualifying income. VAT registration kicks in at AED 375,000 turnover. Al Maktoum International Airport is planned for 260 million passengers per year (Dubai South, 2024). And a free zone license at DSBH can be issued in as little as 3 to 5 working days.
This guide explains what it takes to move your mainland company to Dubai South Business Hub Free Zone, what you gain on tax, ownership, and cost, and the exact steps to get it done without losing ground on your trade license or visas.
What Is Dubai South Business Hub Free Zone and Why Mainland Companies Move
Dubai South Business Hub Free Zone is a licensed free zone at Dubai South, close to Al Maktoum International Airport. Mainland companies move there to gain 100% foreign ownership, cut local agent costs, and qualify for a 0% corporate tax rate on income that meets the FTA's Qualifying Free Zone Person conditions.
The Core Difference Between Mainland and Free Zone
Mainland: Licensed by the Dubai Department of Economy and Tourism (DET). You can trade with any UAE client. But certain legal structures need a local service agent, and ongoing fees are higher.
Free zone: Licensed within a defined zone. As a foreign national, you hold 100% of the shares. You work mainly with international clients or other free zone firms.
The split matters for tax, ownership, and client access. Work this out before you move.
A UK-owned consultancy paying AED 18,000 per year in local agent fees on the mainland can cut that cost to zero by moving to a free zone structure at DSBH. That saving alone covers the cost of an extra staff visa in year one.
Why Dubai South Attracts Mainland Businesses
Three things pull mainland firms toward DSBH:
Direct access to Al Maktoum International Airport, planned for 260 million passengers per year, and a short drive to Jebel Ali Port
Flexi-desk options that keep overhead low for firms with no need for a large office
Fast setup: license approval and visa processing run on tight timelines
A freight forwarding firm moving from a Dubai mainland license to DSBH can switch to a flexi-desk, cut its office cost, and position itself next to the airport cargo hub in one move. Check the full list of business activities to confirm your activity is approved before you start.
Key Gains When You Move Your Mainland Company to Dubai South Business Hub Free Zone
Moving to Dubai South Business Hub Free Zone removes local agent fees, grants 100% foreign ownership, and lets qualifying companies pay 0% corporate tax under the FTA's Qualifying Free Zone Person rules. You also gain access to Dubai South's logistics setup and faster visa processing tied to your trade license.
Ownership and Cost Savings
100% foreign ownership in the free zone. No local sponsor or service agent needed.
Removing the local agent saves AED 10,000 to AED 25,000 per year from day one.
Flexi-desk packages at DSBH cost less than a full mainland office lease in most central Dubai areas.
Visa quotas are tied to your license package. Plan your staff visa count before you pick a package.
A two-person consulting firm spending AED 22,000 per year on a mainland local agent can redirect that spend to an extra staff visa at DSBH. Use the business setup cost calculator to see your full package price before you commit.
Tax Position After the Move
Under UAE Corporate Tax Law, Federal Decree-Law No. 47 of 2022, qualifying free zone persons pay 0% on qualifying income. 0% is conditional, confirm your status with the FTA.
You must register with the Federal Tax Authority once your company is set up. Your turnover level does not change that duty.
VAT rules do not change based on your zone status. If your turnover hits the AED 375,000 threshold, you register for VAT regardless. Keep your books for at least 7 years. The FTA can ask to see them at any time.
A DSBH company earning qualifying income from international clients can pay 0% corporate tax, but it must file a tax return and hold the right records to prove the conditions are met. For a full breakdown of your tax position, see the banking and taxation guide at DSBH.
How to Move Your Mainland Company to Dubai South Business Hub Free Zone: 6 Steps
To move your mainland company to Dubai South Business Hub Free Zone: confirm your activity is approved at DSBH, pick a license package, book your trade name, submit your papers, get your free zone license, then cancel your mainland license with DET. The process takes as little as a few working days for the free zone side.
Before You Start: What to Check
Activity code: Confirm your business activity is on the DSBH approved list. Not every mainland activity maps to a free zone code.
Client contracts: Check whether your current mainland contracts need a UAE mainland entity. A full move may cut you off from those clients.
Visa count: Work out how many visas you need. Your license package sets the quota. Getting this wrong costs time and money to fix.
Cost estimate: Use the DSBH company setup cost calculator to see your full package price before you commit.
A retail business selling goods directly to UAE consumers from a physical shop cannot move its trading activity to a free zone and keep serving walk-in UAE customers in the same way. Check client access first.
The 6 Steps to Complete the Move
Step 1, confirm your activity: Check that your activity code is approved at DSBH.
Step 2, pick your package: Choose your license package and confirm the visa quota it includes.
Step 3, book your trade name: Use the DSBH trade name availability search to reserve your name.
Step 4, submit your papers: Send your passport copy, photo, and any extra docs your activity needs.
Step 5, get your license: Receive your free zone trade license and open your bank account.
Step 6, cancel the mainland license: Close the mainland entity with DET once all visas are transferred.
A management consultancy moving from a DET mainland license to DSBH can complete steps 1 to 5 in as little as 3 to 5 working days if all papers are in order.
Mainland vs Dubai South Free Zone: What Changes for Your Business
On the mainland, you can trade with any UAE client but need a local agent and pay higher fees. At Dubai South Business Hub Free Zone, you get full ownership and lower costs but trade mainly with international clients or other free zone firms. The right choice depends on where your revenue comes from.
Client Access and Market Reach
Mainland companies sell to any UAE-based client. No restrictions on the local market.
Free zone companies work with international clients and other free zone firms. Selling goods into the UAE mainland market needs a local distributor or a separate mainland entity.
For service businesses with mostly overseas clients, the free zone fits well. For retail or B2C businesses tied to the UAE market, the mainland still makes more sense.
A software firm with 90% of its revenue from overseas clients is a strong fit for DSBH. A restaurant chain serving UAE consumers is not.
Feature | Mainland (DET) | Free Zone (DSBH) |
|---|---|---|
Client access | Open UAE market, any client | Mainly international clients and other free zone firms |
Foreign ownership | Up to 100% for many activities since 2021 reforms | 100% for all free zone companies |
Local agent needed | Yes, for certain legal structures – AED 10,000 to AED 25,000 per year | No local agent needed |
Corporate tax rate | 9% on taxable income above AED 375,000 | 0% on qualifying income under Federal Decree-Law No. 47 of 2022 (conditional) |
Office requirement | Physical office lease required in most cases | Flexi-desk options available |
Setup speed | Varies by activity – can take several weeks | As little as 3 to 5 working days |
Costs Side by Side
Mainland costs: License fees vary by activity and office size. Add local agent costs of AED 10,000 to AED 25,000 per year on top.
DSBH costs: Packages bundle the license fee and flexi-desk into one cost. There is no local agent fee.
Visa costs are broadly similar on both sides. The real difference is in the base license and office overhead.
A 2-person advisory firm on the mainland might pay AED 15,000 for the license, AED 20,000 for a local agent, and AED 30,000 for a small office. At DSBH, the same firm pays significantly less with a flexi-desk package and no agent fee. Check current package prices on the DSBH cost calculator.
Tax and Compliance Gains When You Move to Dubai South
Moving to Dubai South Business Hub Free Zone can lower your corporate tax bill to 0% if your company meets the FTA's Qualifying Free Zone Person conditions under Federal Decree-Law No. 47 of 2022. You still register for VAT if turnover exceeds AED 375,000 and must file annual tax returns regardless of rate.
Corporate Tax: What the 0% Rate Needs
0% is conditional, here is what the rate needs:
The 0% rate applies to qualifying income only. The FTA sets the exact conditions under Federal Decree-Law No. 47 of 2022.
You must register for corporate tax once your company exists. Your turnover level does not change that duty.
Income that does not qualify is taxed at 9%. Check your income types with a tax adviser before you move.
File your tax return each year. Missing a deadline brings penalties from the FTA.
A DSBH company earning fees from overseas clients for management consulting may qualify for the 0% rate. But it must get a formal view from the Federal Tax Authority or a registered tax agent on its specific income mix before assuming the rate applies.
VAT and Record-Keeping Rules
VAT: Free zone status does not exempt you. VAT applies at 5% on taxable supplies above AED 375,000 per year. The late registration penalty is AED 10,000. Register on time via the FTA portal.
Records: Keep all financial records for 7 years. This covers invoices, contracts, and bank statements. The FTA can ask to see them at any point.
A DSBH trading company that hits AED 400,000 in UAE-sourced revenue must register for VAT and charge 5% on its taxable supplies, just as a mainland firm would.
Is the 0% corporate tax rate automatic for DSBH companies?
No. The 0% rate under Federal Decree-Law No. 47 of 2022 applies only to qualifying income earned by a Qualifying Free Zone Person. You must register for corporate tax, file annual returns, and meet the FTA's conditions. Income that does not qualify is taxed at 9%. Confirm your income mix with a registered tax agent before you move.
Why Dubai South's Location Gives Your Business an Edge
Dubai South sits next to Al Maktoum International Airport, planned for 260 million passengers a year, and near Jebel Ali Port. This puts DSBH companies close to two of the UAE's biggest trade and logistics hubs, cutting transport time and giving aviation, logistics, and trade firms a real physical edge.
Aviation and Logistics Access
Al Maktoum International Airport is planned for 260 million passengers per year (Dubai South, 2024). It sits directly next to the DSBH zone.
Jebel Ali Port, one of the world's largest container ports, is a short drive from DSBH. This matters for import, export, and freight businesses.
Aviation support, cargo, logistics, and supply chain companies benefit most from this position.
A cargo logistics firm moving its mainland license to DSBH gains a warehouse address minutes from both the airport cargo terminal and Jebel Ali Port, cutting its last-mile cost on both air and sea freight.
What Industries Suit This Location Best
Aviation services: Aircraft maintenance and ground handling are a natural fit given the airport adjacency.
Logistics and freight: Close to both air and sea ports, cutting transport time and cost.
ICT and professional services: Benefit from the cost setup without needing the physical proximity to the port.
Light industrial: Manufacturing businesses use the zone's industrial units close to major transport links.
A regional head office for an aviation parts supplier setting up at DSBH can place its team, its stock, and its customs paperwork all in the same zone, minutes from the cargo terminal. See the full list of business activities at DSBH to confirm your sector is covered.
Visas and Residency When You Move to Dubai South Business Hub Free Zone
When you move your mainland company to Dubai South Business Hub Free Zone, your visa quota is tied to your new license package. You can apply for investor and employee residency visas through DSBH. Existing UAE visas linked to your mainland company must be transferred or cancelled before the mainland license closes.
Investor and Employee Visa Options
Your DSBH license package sets the number of visas you can apply for. Pick the package that matches your team size.
Investor visas are available to company owners. Employee visas cover staff joining the company.
Visa applications go through the DSBH residency services team. The process links directly to your trade license.
Check the visa quota before you sign the license. Upgrading later takes extra time and cost.
A founder moving a 4-person team from a mainland company to DSBH should pick a package that includes at least 5 visa slots: one for the investor and four for employees.
Closing Out Mainland Visas
All visas sponsored by your mainland company must be cancelled or transferred before you close the mainland license. Employees on mainland-sponsored visas need new sponsorship under the DSBH entity first.
Visa transfer order of steps: The ICP handles UAE visa and residency records. Check each person's status at icp.gov.ae before you start the mainland license cancellation. Allow enough time: visa transfers can take days to weeks depending on the number of people involved.
A company with 6 staff on mainland-sponsored visas should start the transfer process at least 4 weeks before the planned mainland license cancellation date.
What happens to my team's visas when I cancel the mainland license?
Your mainland license cannot be cancelled while active visas are still linked to it. You must transfer each employee visa to the new DSBH entity before DET will close the mainland license. The ICP manages all UAE visa records. Start the transfer process at least 4 weeks before your planned cancellation date to avoid residency gaps.
Common Questions About Moving a Mainland Company to Dubai South
The most common questions when moving a mainland company to Dubai South Business Hub Free Zone cover client access, visa transfers, tax status, and whether your activity is approved. Check your activity code, your client base, and your visa count before you start.
Can I Keep UAE Clients After the Move?
Key rule: free zone companies can serve UAE-based clients for most service work. Selling goods directly into the UAE mainland market needs a distributor or a mainland entity.
If most of your revenue is from UAE-based B2B clients buying services, the move is usually fine. If you rely on walk-in retail or direct goods sales to UAE consumers, the free zone setup creates a barrier.
A marketing agency with all its clients in Dubai can move to DSBH and keep those clients for service work. A wholesale goods trader selling direct to Dubai retailers needs to keep or add a mainland entity.
What Happens to My Mainland Trade Name?
Your mainland trade name is registered with DET. It does not transfer to the free zone automatically.
Trade name steps: Book a new trade name at DSBH using the business name availability check tool. You can use the same name if it is free in the free zone registry.
Check name availability early. If your brand name is taken in the free zone, you need a plan before you cancel the mainland license. A firm called "Gulf Advisory FZE" on the mainland would need to confirm that name is free in the DSBH registry before committing to the move.
Moving your mainland company to Dubai South Business Hub Free Zone makes sense if your clients are international, your costs are high, and you want full ownership without a local agent. The steps are clear: check your activity, pick your package, book your name, submit your papers, get your free zone license, then close the mainland entity. Get the visa transfers right before you cancel, and register with the FTA on day one of your new company.
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Frequently Asked Questions
