What exactly is a UAE mainland company and why is it so important to have one? A mainland company is a company licensed by the Department of Economic Development (DED) in the relevant Emirate of the United Arab Emirates. Here’s a summary of the benefits of company registration on the UAE mainland, plus a guide to business setup on the Dubai maniland!
Setting up a mainland company in Dubai comes with many advantages. Here are some key benefits:
These benefits make mainland company formation an attractive option for entrepreneurs looking to grow and succeed.
With a Dubai mainland company, you can trade freely with other businesses and have unlimited location options. These companies can also offer services to the government and sell directly to consumers anywhere in the UAE. Plus, setting up a mainland company allows you to open multiple branches, establishing a strong presence throughout the Emirates.
Mainland businesses can take on a wide range of work. If you want to diversify your services within the mainland, simply re-register the new business activity with the DED, and you can start trading freely.
A large incentive to set up a mainland business in Dubai is the access to valuable government contracts in the UAE. In recent years, the Abu Dhabi Executive Council approved AED 17.5bn (USD 4.76bn) of spending on government projects, including over AED 4bn on infrastructure. Approximately AED 2bn was allocated for education and a combined AED 1.2bn on upgrades to governmental and social facilities. As an established mainland company in Dubai, you’ll be well-positioned to take advantage of these opportunities.
Traditionally, 100% foreign ownership of a UAE business entity was only possible under two circumstances:
In recent years, HH Sheikh Mohammed bin Rashid Al Maktoum has allowed 100% foreign ownership of mainland companies in the UAE. This has been a welcome change for prospective overseas investors looking to conduct business in the Emirates. This is great news for international investors new to the Emirates. 100% foreign ownership means business owners can get straight down to business, without the need to canvass for an Emirati company or individual to act as a partner. 100% foreign ownership of mainland UAE business provides incredible potential for the UAE’s growth-machine economy to foreign investors. However, certain strategic sectors, such as oil and gas, still require a local partner.
If you’re currently operating within a free zone business structure and considering transitioning to a mainland company, we’re here to assist you. Over 30,000 companies trade from the three largest UAE free zones. Foreign entrepreneurs can also benefit from the conveniences of pre-packaged business inclusions in free zones. However, this model has limitations. While free zone companies serve as an excellent starting point, expanding often requires transitioning to a mainland company. This switch is vital for your business’s growth. With the right UAE national sponsor or company formation specialist, moving from a free zone to the mainland is both a strategic and manageable decision.
It’s time for your business setup checklist. Let’s get your venture off to a successful start!
The first thing to decide before you set up a company in the UAE mainland is the industry in which you will trade. There are thousands of permitted business activities as listed by the Department of Economic Development (DED). Some of these include trading, agriculture, hospitality and manufacturing. Unlike many free zone businesses that are restricted from certain activities based on their location, mainland businesses are free to trade in any of the 2000+ DED-listed activities.
Once you’ve decided your business activity, the next step is to decide where you wish to operate. Businesses on the UAE mainland incur no restrictions on where they can set up. The right location will depend on many factors such as budgeting and your chosen business activity. Should your company rely on imports and exports, then setting up near one of the UAE’s busy ports – Jebel Ali, Mina Zayed or Mina Khalid – makes perfect business sense. Another advantage of mainland business setup in Dubai is the ease of opening branch offices. This means businesses are not limited to one location and can build a large local presence over time.
From a legal standpoint, there are several types of businesses that can be set up by foreign entrepreneurs on the UAE mainland. The most common mainland business structure is a Limited Liability Company (LLC). An LLC is an independent legal entity owned by two or more shareholders. A business wishing to trade under a commercial or industrial licence (including industrial and manufacturing activities) must form an LLC to set up a company in the UAE mainland. This would require a local sponsor. By contrast, setting up a professional service company does not require a foreign sponsor and can be 100% foreign-owned. More on this next!
Previously, foreign entrepreneurs could only manage mainland business setup in Dubai by partnering with either a sponsor or local service agent. If trading under a commercial or industrial licence as an LLC then a local sponsor is required. Your local sponsor can either be a UAE national or a UAE-based company. In both cases, the local sponsor will own 51% of the business.
TNC can provide you with a Corporate Nominee to act as your Local Partner. This allows you to retain 100% operational and financial control of the business and protects you against any risk. When setting up a professional company in the mainland, only a local service agent (LSA) is required. The LSA will not own any share of the business and will only act as a representative in all administrative dealings and with the government.
Deciding on a company trade name that conveys your brand and professional values is one of the most important business decisions an entrepreneur can make. In the UAE, there are several considerations to keep in mind. Offensive language, religious references or inferences to other organisations are all forbidden. Only full personal names can be included in your company trade name. When it comes to your company trade name in different languages, all names must be written as they are sounded out, rather than translated. To know all the guidelines on naming your company, check our Choosing a Company Name in the UAE guide.
Now it’s time to apply for a mainland trade licence with the Department of Economic Development. Several documents are required as part of a trade license application. These include a licence application; memorandum of sponsor arrangements; and ownership percentage among all partners and shareholder visas, just to name a few.
Once you’ve obtained a business trading licence, it’s time to secure an office space. In the UAE mainland, serviced offices are usually owned and maintained by a third party and contain everything you need to move in immediately. Desks, phone and internet access and reception services are some usual inclusions. Your lease payment would usually cover rent, use of office equipment and utility bills. The other end of the spectrum is a ‘shell and core’ type of office space. This usually requires a full fit-out and decoration, with bills on top of rent costs. A middle ground exists too, with office spaces pre-fitted, where the business owner simply provides their own equipment and pays bills separately.
There’s no limit with mainland visa applications for business owners in the UAE mainland. But the number of visas applied for should correspond with the amount of office space required. Usually, 100 sq. ft. of office or warehouse space per visa is the rule. There are circumstances where this may not be applicable. For example, if the business is a domestic cleaning company with 500+ employees working remotely, the office space needs would be decidedly smaller compared to a textiles or manufacturing company. As the owner of a UAE mainland company, you will also be able to sponsor dependents – such as family members and domestic staff (maids or drivers, for example) for their visas as well. Foreign entrepreneurs who establish business on the UAE mainland are also entitled to an investment visa which gives them and their families the right to live and work in the UAE for up to three years.
Setting up a mainland company in the UAE requires a deep understanding of the legal and company formation process. Working with UAE-based business setup consultants helps take the stress out of setting up a company for overseas entrepreneurs. A business consultant can collaborate with you and understand your business goals. This will help you feel confident in starting a successful business on the Duabi mainland.
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