Today, Dubai has emerged as one of the top destinations for business in the UAE. Apart from the other factors, it is mainly because of its geographical location. It lies at the center of Africa, India, and Asia triangle, which facilitates easy connections, business networking, and trade access. The other reasons are.
So, if you are thinking of expanding your business or opening up a new venture in Dubai, you have made the right decision.
But many pro or budding entrepreneurs have a question about where in Dubai should they start their business to reap maximum benefit. Business establishments and foreign investors who want to start a business in Dubai have three options to register themselves to carry out their commercial activities- Mainland, Free zone, and offshore. Your decision about the location of your business will depend upon the nature and type of your business activities. If you are looking to trade in UAE's local market as well as abroad and take advantage of lucrative government contracts, the best place to start your business in Dubai is its mainland.
What is a Mainland Company?
A Mainland company in Dubai will be an onshore company that can carry out business activities in local markets, other areas of the UAE, and even outside the UAE. Dubai Department of Economic Development (DED) is responsible for the setup of mainland companies. They oversee the registration, license, and commercial compliances and ensure that consumer protection laws are followed.
Earlier, it was mandatory to have a UAE Local Sponsor as a local partner. But, from June 2021, this criterion has been scrapped by a historical decision of the government administration. The government took a decisive step towards its commitment to ensuring a diversified economy with enhanced participation of foreign investors. Hence, foreign investors can now have 100 % ownership of the business. Therefore, more than 1000 commercial and industrial units have been included in the 100% ownership list.
Why a mainland company formation is the best choice in Dubai?
Setting up a mainland company is a lucrative proposition because:
While Dubai is welcoming and setting up business over there is almost a hassle-free process, foreign investors can find it confusing. Many local agents can guide you to open up a business in Dubai. Their assistance seems most required to select the best location for your company in Dubai based on your business requirements. They also help you understand the law of the land and complete the legal formalities required for setting up.
Determining an appropriate legal form is another significant requirement to set up a business in Dubai mainland. The legal structure you will select will determine the personal liability you will face, your ability to raise funds, ownership arrangements, and the documents required to be submitted.
What are the Legal requirements for A mainland Company setup?
The legal structure of a Mainland company setup in Dubai, UAE is determined by the nature of the activity, and the number of shareholders extra.
A Mainland company can be any of the following:
Each legal structure has its advantages and disadvantages. Take advice from experienced business consultants before selecting the legal structure. You have to consider your nature of business, growth prospects, financial requirements, and risk factors before considering the legal structure.
After you are sure about the legal structure, it is time to register for the business license. The trade license will validate your company as a legal entity. DED issues the license for mainland companies in Dubai. You must submit a fee and all necessary documents for company incorporation to get the license.
The Difference
| Commercial company | Sole establishment: | Civil company |
|---|---|---|
Such company is recommended to customers who are willing to trade in the whole region because it has the freedom of operation and provides more opportunities for growth.
| A Sole Establishment Company is a foreign-owned entity. It provides 100% ownership to the owner and no local partner or shareholder is needed, who can act as an agent. There are no established rules for this type of company, except for having one owner. Also, there are no corporate taxes or income taxes.
| The business commercial license is for services, sales, and activities that require government-related requirements such as filling up forms and getting licenses.
|
What you need to know!
Commercial company: A commercial license is suitable for foreign and local investors. Foreign investors are allowed to hold only up to 49% equity ownership in UAE companies, and a minimum share capital of AED 300,000 must be maintained. From 2 to 50 shareholders can be included, depending on the investment desired. As such, you are free to choose the number of partners to include in your company’s registered capital structure. The business activities you intend to provide under this license must be listed in the application form alongside the structural diagram of the proposed arrangement of your board members. The name of each shareholder and their shareholding must also be specified along with an acknowledgment that they accept their rights as appointed directors or shareholders as stipulated by law.
Sole establishment: This type of commercial entity is incorporated under the Company Law and Commercial Companies Procedures Law. It can be formed by individuals and foreign investors, who are allowed to have 100% foreign ownership in such companies that are not registered in Free Zones. Setting up such a company requires you to get your registration through a national service agent who will take care of all procedures required for registering this type of entity, including obtaining a commercial license from the relevant authorities. If you require assistance with article 132A setting up your business, please contact us as soon as possible.
As for a civil company: A company can apply for a professional license if the annual turnover of the foreign partner's country is more than USD 50 million. A local service agent is a UAE national or legal entity (company) marketed as a representative of the foreign partner in its dealings with government agencies and private businesses in the UAE.
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The trade license of a Mainland company can be of 3 types:
Understanding different types of licenses and which one will fit you is also a tough job. On the more, you will need to complete the necessary documentation and fill out all the forms before you submit your requisition for the license. There are experts to guide you in this regard. You must seek help from them.
How to set up a Dubai Mainland company?
Here are the steps an individual must undertake for a successful mainland company formation in Dubai
Advantages of a mainland company:
The Mainland Commercial License is the recommended license for most of your business needs. This license gives you the flexibility to set up an unlimited number of branches and provides 100% repatriation at the end of your investment period. It also allows you to trade directly with a mainland market, which opens doors to an expansive range of business activities.
✔️0% corporate income taxes
✔️0% personal income taxes
✔️Flexibility to choose from a wide range of business activities
✔️Possibility to have more than one branch
✔️100% repatriation of the capital
Mainland companies can practice any industrial, commercial, trading, professional or tourism activity. Some professional activities are excluded as per DED's business regulations and others require approvals of authorities that regulate these activities. Foreign investors can start their business in a partnership where 51% ownership of the company belongs to UAE nationals or choose a Sole Establishment company formation to own 100% of shares. However, some business activities are reserved for UAE nationals only.
Absher Business consultancy
Setting up a business in the UAE can be challenging, and we know this. That’s why we offer a wide range of services to help foreign companies, including start-ups and big businesses alike, understand the most effective corporate structure for conducting business in the Emirates. We can handle everything from registering your company at its headquarters to obtaining a license, helping your company make an impact on this growing market. We are one of the leading business setup consultants in Dubai. We assist businesses interested in setting up their ventures in Dubai. If you are a first-time investor in the UAE and looking for a team of professionals, we can help you set up a business in an economical and hassle-free manner.
Contact us:
For the best services in business consultancy in dubai, you can reach us by e-mail or via call
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