February 13, 2025

What Are The Legal Restrictions For A Tourism Business in Dubai Free Zones?

2 min read
What Are The Legal Restrictions For A Tourism Business in Dubai Free Zones?

Dubai is a popular tourist destination, and its free zones offer a lucrative opportunity for businesses in the tourism industry. However, it is essential to understand the legal restrictions that come with operating a tourism business in these designated areas. In this article, we will discuss the legal requirements and limitations that anyone interested in initiating a tourism business setup in Dubai free zone should know of:

Limited scope of operations:

One key restriction for tourism businesses in Dubai free zones is that they are typically limited in terms of the scope of their operations. Unlike mainland companies, which can offer services directly to customers within Dubai, businesses established in free zones are often restricted to dealing with international clients or operating within the free zone’s defined borders. This means that a tourism company cannot engage with clients directly outside the free zone unless they are set up as a mainland entity. It is important to assess these limitations before choosing a free zone for a tourism business.

Licensing and approvals:

Tourism-related businesses in Dubai require specific licenses from the Department of Tourism and Commerce Marketing (DTCM) to operate legally. However, in free zones, tourism businesses may need additional approvals or permits from the relevant free zone authority. These permits and licenses often vary depending on the exact type of tourism business, such as travel agencies, tour operators, or event management companies. The process of acquiring these licenses can be lengthy and may involve background checks, business plan submissions, and demonstrating experience in the tourism sector.

Restrictions on tourism activities:

Some tourism activities are restricted in certain free zones, and businesses cannot operate without the proper permissions. For example, some free zones might restrict businesses that focus on travel booking or organizing certain types of events, like large-scale tourism expos. Additionally, tourism companies offering activities related to public transport, such as tour buses or taxis, may be prohibited from operating within the free zone.

Limited ability to sponsor employees:

In many Dubai free zones, businesses are restricted in the number and type of employees they can sponsor. This limitation might impact tourism businesses that need to hire specific skill sets or a large workforce. Many free zones impose restrictions on the number of visas that can be issued, especially for companies that do not have a physical office within Dubai. Therefore, planning for staffing needs should be a priority when setting up a tourism business in these zones.