Dubai is one of the world's most attractive destinations for entrepreneurs and businesses looking to establish a strong presence in the Middle East. With its strategic location, world-class infrastructure, and investor-friendly policies, Dubai offers ample opportunities for business growth. Among the various business structures available, mainland company formation stands out as the preferred choice for those who wish to operate within the UAE market and internationally.
This guide explores the key aspects of mainland company formation in Dubai, including its benefits, legal requirements, setup process, and costs.
What is a Mainland Company in Dubai?
A mainland company, also known as an onshore company, is registered under the jurisdiction of the Department of Economy and Tourism (DET) in Dubai. Unlike free zone companies, mainland businesses have no restrictions on trading within the UAE or internationally. These companies can engage in government contracts and take advantage of the robust business environment.
Benefits of Setting Up a Mainland Company in Dubai
1. 100% Foreign Ownership
Previously, foreign investors were required to have a local Emirati sponsor holding 51% of shares. However, under recent reforms, foreign investors can now own 100% of their business in most sectors.
2. No Trade Restrictions
Mainland companies can operate anywhere in Dubai, across the UAE, and internationally without any geographical limitations.
3. No Minimum Capital Requirement
Unlike free zones, which may require minimum capital deposits, mainland businesses often have no minimum capital requirements, making it easier to start operations.
4. Ability to Conduct Government Projects
Mainland companies can bid for and execute government contracts, a significant advantage over free zone businesses.
5. Unlimited Visa Quota
A mainland company is eligible for an unlimited number of visas, subject to office space size and business requirements.
6. Office Space Flexibility
Mainland companies must lease office space in Dubai, but they have the flexibility to choose any location that suits their business needs.
Legal Requirements for Mainland Company Formation
To set up a mainland business in Dubai, you must comply with specific legal requirements, including:
1. Choosing the Right Business Activity
Dubai’s Department of Economy and Tourism (DET) offers a list of more than 2,000 business activities. Investors must choose the correct activity that aligns with their business operations.
2. Business Structure Selection
The most common business structures in Dubai mainland include:
- Sole Proprietorship (for single owners)
- Limited Liability Company (LLC) (most popular for SMEs and large businesses)
- Branch of a Foreign Company
- Public or Private Joint Stock Company
3. Trade Name Registration
A unique trade name must be selected and approved by DET to ensure compliance with branding and regulatory standards.
4. Obtaining Initial Approvals
The business must obtain initial approval from DET and other relevant authorities based on its industry.
5. Office Space Lease Agreement
A physical office space is required for a mainland company, and the lease agreement must be registered with Ejari (Dubai’s tenancy regulatory system).
6. Licensing and Permits
Depending on the business activity, specific licenses must be acquired, such as:
- Commercial License (for trading businesses)
- Professional License (for service-based businesses)
- Industrial License (for manufacturing businesses)
7. Hiring Employees and Labor Registration
All mainland companies must register their employees with the Ministry of Human Resources and Emiratisation (MOHRE) and provide employment contracts.
Steps to Set Up a Mainland Company in Dubai
Step 1: Define Your Business Activity
Choose a business activity from the DET list that best suits your company’s operations.
Step 2: Choose a Legal Structure
Select an appropriate business structure such as an LLC, sole proprietorship, or branch office.
Step 3: Reserve a Trade Name
Submit three trade name options for approval. The name must not violate any trademarks or contain offensive terms.
Step 4: Obtain Initial Approval
Secure initial approval from DET to proceed with further documentation.
Step 5: Secure Office Space and Ejari Registration
Lease an office space and register the tenancy agreement with Ejari.
Step 6: Apply for a Business License
Submit the required documents and apply for a trade license from DET.
Step 7: Register with Authorities
- Obtain approvals from external departments (if required, depending on industry).
- Register with MOHRE and the General Directorate of Residency and Foreigners Affairs (GDRFA) for employee visas.
Step 8: Open a Corporate Bank Account
Choose a UAE-based bank and open a corporate bank account for business transactions.
Cost of Mainland Company Formation in Dubai
The cost of setting up a mainland company depends on various factors, including business activity, office rent, and government fees. Estimated costs include:
- Trade License Fee: AED 10,000 – AED 15,000
- Office Rent: AED 20,000 – AED 50,000 (depending on location and size)
- Government Approvals & Registration Fees: AED 5,000 – AED 10,000
- Visa Costs: AED 3,000 – AED 5,000 per visa
Total setup costs can range between AED 30,000 – AED 70,000, depending on business requirements.
Documents Required for Mainland Company Setup
To register a mainland company, the following documents are needed:
- copyright copies of all shareholders
- UAE entry visa copies
- No Objection Certificate (NOC) from the current sponsor (if applicable)
- Business activity details
- Trade name reservation certificate
- Lease agreement registered with Ejari
Why Choose Dubai for Mainland Company Formation?
Dubai offers an unparalleled business environment with tax benefits, a robust legal system, and global connectivity. Key reasons to set up a mainland company in Dubai include:
1. Strategic Location
Dubai serves as a gateway between Europe, Asia, and Africa, making it ideal for businesses looking to expand globally.
2. Tax Benefits
Dubai offers a 0% corporate tax for most businesses and no personal income tax, making it a tax-friendly environment.
3. Business-Friendly Regulations
The UAE government continuously updates policies to facilitate easier company formation and foreign investment.
4. Growing Economy and Market Access
With a rapidly growing economy, Dubai provides access to a lucrative market across various industries.
Conclusion
Setting up a mainland company in Dubai is a strategic move for businesses looking to expand in the UAE and beyond. With no trade restrictions, 100% foreign ownership, and access to government contracts, a mainland company offers unparalleled growth opportunities.
By following the proper legal procedures, choosing the right business activity, and partnering with experts, entrepreneurs can seamlessly establish and grow their business in Dubai’s thriving economy.