Business Set-up in Dubai Mainland
Mainland Dubai, also known as onshore Dubai, is the area outside the free zones and is the heart of the city’s thriving business community. The Department of Economic Development (DED) is the regulatory body overseeing Mainland Dubai, ensuring a robust and sustainable business environment. The DED is responsible for issuing trade licenses, formulating and implementing economic policies, and fostering economic growth and investment.
|Types of Mainland Trade Licenses
|for businesses offering professional or consultancy services, such as management consultancies, law firms, and architectural studios
||for businesses engaged in trading activities, such as buying and selling goods or providing specific services, like retail shops, car dealerships, and e-commerce businesses
||for businesses involved in manufacturing, processing, or packaging goods, for example, factories, food processing plants, and textile mills
Each of these licenses is issued by the DED and comes with its own set of requirements and regulations. Choosing the right license for your business is crucial, as it determines the scope of your operations and the legal structure of your company.
Advantages of Choosing Mainland Dubai for Business Setup
- Ease of Company Formation with Expert Assistance. Setting up a mainland company in Dubai is a straightforward process, especially when working with experienced company formation experts, such as The Visa Services. We can guide you through the necessary steps, ensuring a smooth and efficient setup for your business.
- Possibility of 100% Foreign Ownership. Thanks to recent amendments in the UAE Commercial Companies Law, over 2000+ commercial and industrial activities are now eligible for 100% foreign ownership under a mainland license. This allows investors to have complete control over their businesses without the need for a local partner.
- Freedom to Work with the UAE Mainland Companies and Governmental Bodies. This can significantly enhance your business reputation and status, both within the country and internationally.
- Flexibility in Choosing Commercial Premises. Mainland businesses have the freedom to select their commercial premises anywhere within the emirate where the license is issued, as long as it is located onshore.
- International Trade and Expansion Opportunities. This opens doors for global expansion, and increased revenue and allows businesses to reach new markets and grow their customer base beyond the borders of the UAE.
- Ability to Apply for an Unlimited Number of Visas. This applies if you meet the necessary office or warehouse space requirements.
- Branch Expansion Throughout Dubai and the UAE. This flexibility enables businesses to tap into new markets and better serve their customers across the country.
- Smoother and Faster Administrative Processes. Compared to free zone counterparts, the administrative processes for mainland businesses are often smoother, faster, and less restrictive.
Disadvantages of Choosing Mainland Dubai for Business Setup
- Restrictions on Business Ownership for Certain Activities. While many business activities now allow 100% foreign ownership, there are still a few sectors where restrictions apply. In these cases, a local Emirati partner may be required to hold a majority stake in the company, which can introduce potential risks, as the sponsor may have significant control over the company. Otherwise, the company needs to appoint a Local Service Agent (LSA), that will represent it for a certain fee, but will not own any company shares. It is essential to carefully select and manage the relationship with your local partners to mitigate risks.
- Possible Minimum Share Capital Requirement. Depending on the nature of your business, a minimum share capital requirement may apply. This requirement varies based on the specific business activity and can be an additional upfront expense for investors.
- Taxation in Mainland Dubai. Mainland companies are subject to VAT at 5% and, in some cases, corporate tax. Although these taxes are generally low compared to other jurisdictions.
- Obligatory Annual Financial Audits. This requires retaining an auditor and maintaining accurate financial records, which can be time-consuming and costly for businesses.
- Approvals from Various Government Bodies. Some business activities, such as those involving healthcare, education, or financial services, require special approvals from relevant authorities. These approvals may take time and can be a complex process, especially for businesses unfamiliar with local regulations.
- Physical Office Space Requirements. This requirement can increase the overall cost of establishing and operating your business in Dubai.
Steps to Register a Mainland Company in the UAE
- Select a Business Activity: This decision will influence the type of license you need and any additional approvals required.
- Choose a Legal Form: Such as a Limited Liability Company (LLC), Sole Proprietorship, or Partnership. The legal structure will determine your company’s liability, ownership, and management.
- Select a Unique Trade Name: A suitable trade name for your company that should comply with the Department of Economic Development’s (DED) guidelines and should not include any offensive or religious terms.
- Apply for Initial Approval in DED: This provisional approval allows you to proceed with the registration process.
- Prepare MOA and LSA Agreement: Draft the Memorandum of Association (MOA) and, if required, the Local Service Agent (LSA) Agreement. These documents outline the company’s ownership structure, share capital, and management responsibilities. Once prepared, submit them to the relevant authorities for approval.
- Establish Business Location: Secure a physical office space for your company. This location must comply with the DED’s requirements, including size, accessibility, and safety standards. Once you’ve arranged the space, obtain a tenancy contract and Ejari registration.
- Obtain Necessary Approvals: Obtain relevant approvals from government authorities, depending on your business activity, and submit them to the DED to continue the registration process.
- Collect Business License.
Navigating the process of setting up a mainland company in Dubai can be challenging, but with the right support and guidance, you can establish your business smoothly and efficiently.
The Visa Services Company offers expert assistance in every step of the process, from selecting the appropriate business activity and legal form to obtaining the necessary approvals and licenses. Contact us today to discuss our partnership, so you can focus on growing your business while leaving the complexities of company formation and visa applications in the hands of professionals.
More information on company formation in the UAE you can find on the page about the Business Set-Up in the UAE Free Zones.