Advantages and Disadvantages of Mainland Companies in Dubai

Is it possible to operate the company on the Dubai mainland?

As the UAE offers numerous benefits to investors of all scales, every entrepreneur from around the world raves about doing business in the UAE. This is one of its prominent characteristics: it provides an environment and business culture for organizations to expand their business in all sectors. A business enterprise unaccustomed to the new setting always vacillates on the decision as to where to open a company, how to open a company, whether this place is good for setting up a business in Dubai, and so forth. But suppose you are planning to invest in setting up a company or a mainland company in the UAE. In that case, your decision will yield a productive outcome for your business because Dubai is an ideal place for companies to do business. In recent years, Dubai’s substantial economic dynamism has established a precedent for investment opportunities that attract entrepreneurs worldwide. However, the primary question that every prospective investor comes across is whether to go with a mainland company formation in Dubai or a free zone company. Many interested investors might be wondering what the fuss is about mainland companies in Dubai. To comprehend your understanding of this aspect, we have detailed every piece of information, so now let’s learn more about the mainland company.

What is Dubai on the mainland about?

The government licenses the Dubai mainland, also known as the mainland, which is a main location in each of the seven emirates. The mainland companies in Dubai fall under the Department of Economic Development. With the business license issued by the Department of Economic Development, investors can enjoy unrestricted access to trade opportunities that give them the benefit of trading locally and internationally. Moreover, onshore companies can conduct business activities in the local market and outside the UAE market.

Basic things to know for mainland companies in Dubai 

• Visa benefit: Being a prospective mainland company, they are not restricted on the aspect of visa restrictions because the size of the office and business facility determines the number of residents for your company. That means the larger office you have, the more residency visas your company will be eligible for.
• Office essentials: For mainland companies in Dubai, it is specified to lease a minimum of 200 square feet because virtual offices are not permitted for mainland business. 
• The ownership and organizational structure of the business: Along with conducting business within any free zone, a company on the mainland is allowed to do business throughout the UAE market. The bill passed by the UAE enables 100% foreign ownership of mainland businesses, providing them with the benefit of full ownership.

Benefits of Operating Mainland Companies in Dubai

1. A mainland company does not have to pay corporate taxes; furthermore, it receives the benefit of paying only 5% statutory VAT, which is the lowest around the world.

2. As a mainland company, you enjoy the benefit of full ownership without any local partner or local sponsor.

3. Your company does not need to follow all financial audits except those that Dubai’s top tax consulting company highly recommends.

4. If you are planning to operate a company in Dubai, you can do professional or business activities throughout the territory of the UAE.

5. You can recruit qualified employees for your business because of the simpler visa process.

6. As a mainland company, you also have the advantage of bidding on government projects.

7. There is no currency restriction for a mainland company.

The drawback of operating a business in the Dubai mainland

1. You might need a local sponsor for specific decisions and certain activities that will influence company decisions, and your business may require royalties for that.

2. Operating a company on the Dubai mainland can be exorbitantly expensive for your business.

3. As administrative processes take time, it may take time to finalize the company setup.

How can Flyingcolour help you?

As we have come to the end of the blog, you must take proactive steps in choosing the location for your business because it determines the performance of your business. As a result, you should get expert consultancy from FlyingColour and the legal team experts that will make the process easy for you. We are here to clear your doubts and cover all aspects of company formation. To learn more about mainland companies in Dubai, book a free consultation with one of Flyingcolour team advisors. *Please note that this article has been published on 19/12/2023 in accordance with the federal policies and updates at the time of writing. For the latest info please talk to our consultant.