Mainland Company Formation in Dubai

Is establishing a mainland company in Dubai the right decision for you? With the opportunity to select from more than 3,000 business activities, you can enjoy the flexibility to trade both within the UAE and internationally. What exactly constitutes a UAE mainland company, and why is it crucial to have one? A mainland company is one that has been licensed by the Department of Economic Development (DED) in the respective Emirate of the United Arab Emirates. Here is an overview of the advantages of registering a company on the Dubai mainland, along with a guide to mainland company formation in dubai.

What is Dubai Mainland Company?

As mentioned, A Dubai mainland company is a business entity registered under the Department of Economic Development (DED) in Dubai, United Arab Emirates. This classification allows the company to conduct business within the local market as well as outside the UAE without any restrictions. Here are some key features of a Dubai mainland company:

• Operational Flexibility: Mainland companies can operate anywhere within the UAE and abroad. They are not restricted to specific zones or areas.
• Wide Range of Business Activities: The DED allows for a vast array of business activities that can be conducted by mainland companies. This flexibility enables businesses to easily expand or change their operational scope by registering additional activities with the DED.
• Trade and Contract Opportunities: Mainland companies can directly trade with the UAE market and take on government contracts, which can be lucrative and offer substantial growth opportunities.
• No Ownership Restrictions: Recent changes in the law now allow 100% foreign ownership of mainland companies in most sectors, removing the need for a UAE national as a mandatory partner. However, certain strategic sectors may still require a local partnership.
• Local and Global Trading: Unlike companies in free zones, which are primarily oriented towards international business and have limitations on trading directly in the local market, mainland companies can engage freely in both local and international trade.
• Ability to Grow Through Branches: Mainland companies can open multiple branches across Dubai and other Emirates, increasing their operational reach and presence within the country.

Overall, setting up a mainland company in Dubai is often chosen by entrepreneurs and businesses looking to have a robust presence in the UAE's diverse market, benefit from the economy's dynamic environment, and leverage the strategic location of Dubai as a global business hub.

Benefits of Mainland Company Formation in Dubai

Forming a mainland company in Dubai offers numerous benefits that can be advantageous for businesses looking to establish a strong and flexible presence in the Middle East. Here are some of the key benefits:

• Strategic Location: Dubai's strategic location makes it a gateway between the East and West, providing businesses with access to markets across Europe, Asia, the Middle East, and Africa. Mainland companies benefit from this global connectivity through excellent air, sea, and land transport links.
• No Trade Restrictions: Mainland companies in Dubai face no restrictions on where they can trade within the UAE or who they can do business with, including local and international markets. This contrasts with free zone companies, which are generally restricted to doing business within their specific free zone and with international markets, unless they use a local distributor.
• Diverse Economic Sectors: Dubai's economy is not just limited to oil; it's also strong in sectors such as real estate, construction, tourism, hospitality, technology, and finance. Mainland companies can operate in nearly any industry, giving business owners a wide array of opportunities for diversification and growth.
• Eligibility for Government Contracts: Mainland companies can bid for and secure lucrative government contracts, an opportunity that is generally not available to free zone businesses. These contracts can be significant, especially in sectors like infrastructure development, health care, and education.
• 100% Foreign Ownership: Recent changes in UAE law now allow for 100% foreign ownership of mainland companies in many sectors. This is a significant shift from the previous requirement for a UAE national to hold at least 51% ownership in the mainland companies outside of free zones.
• Ease of Doing Business: Dubai has a reputation for its ease of doing business, with a regulatory environment that is conducive to starting and growing a company. The government continually works on improving business laws to attract foreign investments.
• No Corporate Tax: As of now, Dubai does not levy corporate taxes, making it an attractive destination for business incorporation. This can significantly enhance profitability and ease of operation for mainland companies.
• Ability to Issue Various Visas: Mainland companies can apply for an unlimited number of visas, depending on the office space size and the nature of the business. This is particularly beneficial for businesses that require a large workforce.
• Local and International Banking Facilities: Dubai offers robust banking facilities that are conducive to business operations, supporting both local and international banking needs. Mainland companies benefit from easier access to corporate bank accounts and loans.
• Networking Opportunities: Operating a mainland company in Dubai offers vast networking opportunities with other global businesses and access to a large pool of potential clients and partners.

These benefits make Dubai mainland company formation a compelling choice for businesses aiming to leverage Dubai's dynamic market and its position as a leading global business hub.

Procedure for Mainland Company Formation in Dubai

Forming a mainland company in Dubai involves a systematic process managed by the Department of Economic Development (DED). Here is a step-by-step guide to the procedure:

Step 1: Choose Your Business Activity

Before initiating the process of setting up a company on the UAE mainland, it is crucial to determine the industry in which your business will operate. The Department of Economic Development (DED) in Dubai has authorized a comprehensive list of over 2,000 business activities across various sectors. These sectors include, but are not limited to, trading, agriculture, hospitality, and manufacturing.

Mainland companies are not restricted to specific activities based on their location.

Step 2: Find the Ideal Location for Your Business in the UAE

After selecting your business activity, the next crucial step is to choose a suitable location for your business operations on the UAE mainland. Unlike free zones, where businesses are confined to specific areas, mainland companies have the freedom to establish themselves anywhere within the UAE.

Choosing the right location is a strategic decision that can influence the success and growth of your business. It is advisable to conduct thorough research or consult with Filings.ae experts to ensure that the chosen site aligns with your business objectives and operational needs.

Step 3: Determine Your Business Legal Structure

When establishing a business on the Dubai mainland, selecting the appropriate legal structure is critical as it affects everything from your operational capabilities to legal liabilities and tax obligations. For foreign entrepreneurs, there are several business structures to consider, each catering to different business needs and activities. Common Mainland Business Structures are:

Limited Liability Company (LLC)

• Ownership: Often requires a local sponsor who owns up to 51%, but recent changes now allow 100% foreign ownership in many sectors.
• Activities: Best for businesses involved in trading, manufacturing, or industrial activities.
• Advantages: Limits your financial liability to the amount you've invested in the company.

Professional Services Company

• Ownership: Can be 100% foreign-owned; no local sponsor required.
• Activities: Ideal for professionals offering services like consulting, IT, or health.
• Advantages: Allows full ownership and is suitable for service-oriented professionals

Key Points to Consider:

• Align with Goals: Ensure the structure matches your business goals and expansion plans.
• Compliance: Follow local laws and regulations related to your chosen structure.
• Seek Advice: Consider getting legal and financial advice to make the best choice for your situation.

Step 4: Obtain a Local Sponsor or Local Service Agent

When setting up a business in Dubai's mainland, foreign entrepreneurs often need to engage with a local sponsor or service agent, especially if establishing a commercial or industrial LLC. As per latest regulations, UAE Mainland Businesses will get a 100% foreign ownership for specific sectors, otherwise 51% will be owned by local sponsor. This arrangement is crucial for complying with local regulations and gaining insights into the UAE market.

Alternatively, if you're setting up a professional services company with 100% foreign ownership, you'll need a local service agent instead. This agent will assist you with government procedures and paperwork but will not have an equity stake in your business.

Filings.ae can also provide valuable guidance through this process, helping to streamline the setup of your mainland business.

Step 5: Name Your Company

Choosing the right trade name for your company is a critical decision that can significantly impact your brand and how it's perceived. In the UAE, the process comes with specific guidelines that you must follow to ensure your trade name is appropriately registered:

• Appropriateness: Avoid any language that could be considered offensive or sensitive.
• Personal Names: If you decide to use a personal name as your company name, it must be your full name as registered. Partial names or nicknames are not permitted in the trade name.
• Consistency Across Languages: If your company name is in a language other than Arabic, it must be transliterated, not translated.
• Regulatory Compliance: Ensure your chosen name complies with all local regulations.

Step 6: Apply for a Mainland Trade License

Applying for a mainland trade license is crucial in establishing your business in Dubai. This process is overseen by the Department of Economic Development (DED), and involves submitting several important documents:

• License Application
• Memorandum of Sponsor Arrangements
• Ownership Details
• Shareholder Visas

To successfully apply for your trade license, ensure that all paperwork is accurately filled out and that you adhere to the specific regulations set by the DED. This might include additional requirements based on your business activity or sector.

Also read: How to obtain Mainland License

Step 7: Secure Your Office Space

Once you have your business trading license, it's time to find an office space in the UAE mainland. Depending on the chosen business license, you can choose office. Here are the main types of office spaces available:

• Serviced Offices: These offices are fully equipped and managed by a third party. They include essentials like desks, phones, internet, and reception services.
• Shell and Core Offices: These spaces are empty and require complete setup, including fit-out and decoration.
• Pre-Fitted Offices: These offices balance serviced and shell and core options. They come with basic fittings, but you'll need to bring your equipment and handle utility bills separately.

Choosing the right office space is crucial as it affects your operations, staff morale, and client perceptions.

In Dubai, securing an office space also requires completing Ejari registration. Ejari is a rental contract registration system mandated by the Dubai Land Department to regulate rental agreements and protect tenant and landlord rights. Renting out or leasing a commercial space in Dubai Mainland requires an Ejari registration. It is essential for legal purposes and is often a requirement for processing various government services, including visa applications.

Step 8: Apply for Relevant Visas

Once your UAE mainland business is set up, you can apply for visas for yourself, your employees, and your dependents. The number of visas you can apply for generally depends on how much office or warehouse space you have - the standard guideline is about 100 sq. ft. per visa.

Step 9: Open a Corporate Bank Account

Once your trade license is secured and your office space is set up, the next step is to open a corporate bank account. This is essential for managing your business's finances effectively. In the UAE, banks may require the following documents to open a corporate account:

• Your business trade license
• Passport copies of the company's shareholders and directors
• Memorandum of Association (MOA)
• Proof of business address (e.g., utility bill or lease agreement)
• Bank application form and a business plan, in some cases

Choosing the right bank involves considering the ease of transactions, online banking facilities, customer service, and other banking benefits that suit your business needs.

Step 10: Register for VAT

If your business's taxable supplies and imports exceed the mandatory registration threshold of AED 375,000 annually, you must register for Value Added Tax (VAT) in the UAE. Registering for VAT involves the following steps:

• Applying online through the Federal Tax Authority official website
• Providing details of your business, such as financial records, trade license, and bank account information
• Completing the VAT registration form

Once registered, you will be required to file periodic VAT returns detailing all taxable transactions. VAT compliance is crucial as it involves accurate record-keeping and timely submissions to avoid penalties.

Completing these steps ensures that your business operations are financially sound and legally compliant, allowing you to focus on growth and development in the UAE's dynamic market.

However, the type of business can affect this requirement. For instance, a remote-working domestic cleaning company might need fewer visas than a space-intensive textile or manufacturing company.

As the owner of a UAE mainland company, you also have the right to sponsor visas for your family members and domestic staff. Furthermore, foreign entrepreneurs are eligible for an investment visa, allowing them and their families to live and work in the UAE for up to three years.

How Filings.ae Can you Assist with Mainland Company Formation in Dubai?

If you're considering forming a mainland company in Dubai, the experts at Filings.ae can provide valuable assistance throughout the process. Our services cover every aspect of setting up your business, from selecting the right business activity and legal structure to applying for the necessary trade licenses and visas. We can also assist with opening a corporate bank account and registering for VAT, ensuring that all legal and regulatory requirements are met efficiently.

Contact Filings.ae today for expert assistance with your mainland company formation in Dubai & start your business journey with confidence!