Benefits of Mainland Business Setup Dubai

Benefits of Mainland Business Setup Dubai

For the last three decades, the United Arab Emirates has undergone a business transformation and industrial revolution. Especially the Emirate of Dubai has become the most successful and prosperous Emirates in the entire country from a local trading community. Dubai Mainland is the most profitable area to begin a business in the UAE. Business setup in Mainland Dubai lets you perform business activities locally in this Emirate and other parts of the UAE. In addition, you can conduct your business internationally by setting up a Mainland Company in Dubai. The Department of Economic Development (DED) monitors the Dubai Mainland.

The area has been a business hub for foreign entrepreneurs for numerous years. The Benefits of Mainland Business Setup in Dubai add to Dubai’s flexible and conducive organisational environment. We are sure you might be considering what advantages you can obtain by starting a business in this area. If you are excited to learn about the advantages of business setup in mainland, Dubai you must read this article. The article will provide you with a list of top advantages to begin a company in this area. In addition, we will give basic information about Mainland Dubai.

What is Mainland in Dubai?

The Mainland, also known as the Onshore area, is related to the region in Dubai and is located outside the free zone. The area falls under the jurisdiction of the Department of Economic Development (DED). Consequently, the issuance of all three categories of Mainland trade licenses is overseen by the DED.

What does a Dubai mainland license entail?

Like Dubai Mainland, the Dubai Mainland license is also known as the Onshore license. The license allows you to conduct business within and internationally without any constraints. As per the UAE company law, any mainland business operating in Dubai or other Emirates must appoint a local service agent, like Flyingcolour Business Setup.

The local service agent holds no share in the organization. They serve as the corporation’s representative in all regulatory interactions with the government authorities. Business owners can enter into a contractual arrangement with the local service agent, who will assist them in setting up a business in Mainland Dubai with a fixed annual fee.

Types of Mainland Business Licenses

Dubai Mainland offers three types of business licenses. The following is the detail about the Mainland Business Licenses:  

• Commercial license: This type of license is issued to businesses that are engaged in trading activities.
• Professional license: This type of license is designated for service-based businesses, like legal, accounting, and consulting companies.
• Industrial licenses:  This type of license is granted to businesses in the industrial sectors. Businesses performing manufacturing or processing activities must obtain this license.

  Before starting a business in Mainland Dubai, you should choose an appropriate business license for your business. These documents will allow you to conduct business activities in Mainland Dubai.

Benefits of Beginning a Mainland Business Setup in Dubai

Mainland Dubai is one of the most suitable locations to start a business world. Its benefits make the area a preferable location for foreigners looking to start an enterprise in this area.   Let us take a look at the top Benefits of Mainland Business Setup in Dubai:  

1. Easy company formation process

Many foreign individuals and businesses have taken advantage of the rapidly expanding technology and cooperative services offered in Dubai's mainland. The United Arab Emirates scores 80.9 out of 100 in the ease of doing business. It indicates that the country has better and simpler rules for conducting business operations. Due to these reasons, starting a mainland company in Dubai involves a hassle-free process with negligible paperwork. In addition, there is no minimum capital requirement for starting a business in this area. This means you can start a company with a small budget in Dubai Mainland.  

2. Autonomy to trade in Dubai and the UAE

The Mainland business setup in Dubai can also provide you with the freedom to trade in Dubai and the UAE. The Mainland Business does not restrict who and where can trade in Dubai. By starting a business in Dubai Mainland, traders can plan and start any trade without bothering the legal association of exceeding the trade permission in Dubai and the complete UAE jurisdiction.  

3. More options

The more business activities are another significant benefit you can enjoy by starting a business in Mainland Dubai. Indeed, you have guessed it right! The Mainland companies will have more options for business activities, unlike the Dubai Free Zone. For example, businesses or companies operating in the Dubai Media City have to work in the media or closely related industries. However, there is no limitation for Dubai mainland companies. You can conduct more business activities as you want. In addition, these companies can open up to the broader UAE economy with much scope to diversify.  

4. No visa limit

There is no restriction on the number of visas if your business is operating in Mainland Dubai. However, your suitability to get the visas entirely depends on the size of the office spaces you need.  It indicates that more office space implies more visas. In addition, the provision of Dubai’s Golden Visas is introduced to facilitate foreigners to work, live, and study in the United Arab Emirates. This visa makes the job flexible and enhances the country’s talent pool. Moreover, entrepreneurs with the golden visa can live up to ten years in the UAE.  

5. Complete Ownership

Last but not least, complete ownership is among the most significant benefits you can enjoy by setting up a business in Dubai Mainland. Setting up a business in Mainland Dubai grants the unique benefit of complete ownership control. This level of ownership was traditionally available only in Free Zones or certain professional services companies. Now, entrepreneurs may exercise complete control over their business entities with the Dubai Mainland. This level of ownership enhances decision-making autonomy and strategic planning.

Dubai Mainland vs Free Zone vs Offshore: A Direct Comparison

Before getting started with a mainland business setup, it is important to understand how it is different from the other two business jurisdictions available in the UAE: Free Zones and Offshore. Each jurisdiction has a different purpose and the right selection depends purely on the nature of your business and your target market along with your operational needs.

100% Foreign Ownership in Dubai Mainland: What Changed?

One of the most important and latest development in UAE business law is the amendment to the Commercial Companies Law in 2021. This law now permits 100% foreign ownership for a variety of mainland business activities. This was earlier not available on the mainland. Previously foreign investors had to have a UAE national as 51% local sponsor.

According to the new rules, businesses operating in most commercial and service sectors can be fully owned by a foreign national. Then you do not need a local Emirati partner. The UAE Cabinet approved a list of over 1000 commercial and industrial activities that are eligible for foreign ownership on the mainland.

What Activities Still Require a Local Partner?

There are a few specific or sensitive business activities that need a UAE national partner or sponsor. They are:

• Oil and gas activities
• Security and defense-related businesses
• Printing and publishing (in some cases)
• Some transport and logistics activities
• Businesses related to federal licensing requirements

For activities other than the above, foreign business owners and investors can enjoy the benefit of full ownership of their mainland company. Thus it makes Dubai mainland an even more appealing destination than ever before. It is suggested to check the ownership rules applicable to your particular business activity through a registered business setup consultant such as Flyingcolour Business Setup.

Mainland Company Structures and Legal Forms in Dubai

When forming a company in the Mainland in Dubai, you must select the right legal structure for your company. The type of legal form impacts ownership and liability along with taxation and the nature of business activities that you are allowed to undertake. The most common mainland company structures are:

1. Limited Liability Company (LLC)

An LLC is the most famous structure for mainland companies in Dubai. It can have between 2 and 50 shareholders and liability is limited to each shareholder’s capital contribution. LLC’s are fit for most commercial and trading activities and now have 100% foreign ownership in eligible sectors.

2. Sole Establishment (Sole Proprietorship)

A sole establishment is entirely owned by a single individual. For foreign nationals, this structure is allowed for professional service activities. The owner has unlimited personal liability for business obligations and debts.

3. Civil Company (Professional Company)

A civil company is fit for professionals like doctors or consultants. It can be owned wholly by a foreign national and is governed under a professional license issued by the DED.

4. Branch of a Foreign Company

A foreign company can setup a branch in Dubai Mainland to carry out the same activities as its parent company. The branch is not an individual legal entity and its liabilities expand to the parent company. A local service agent must be hired even though they do not hold any ownership stake.

5. Branch of a UAE Company

An existing UAE registered company can set up a branch in Dubai Mainland to grow operations. The branch operates under the same trade name and performs similar business activities to the parent entity.

Step-by-Step Process to Set Up a Mainland Company in Dubai

Forming a mainland company in Dubai is a simple yet defined process governed by the Department of Economy and Tourism (DET). With the help of a professional business setup consultant, the overall process can be completed within 5 to 10 business days. Below is a clear breakdown of the major steps involved:

1. Define Your Business Activity: Explain the nature of your business. This helps you to know which type of business license you need and whether you are eligible for 100% foreign ownership.
2. Select a Legal Structure: Choose the right company structure such as LLC or sole establishment. Select a legal structure according to your preferences and business requirements.
3. Reserve a Trade Name: Submit your chosen trade name to the DET for approval. The name must follow rules with UAE naming conventions and must not match existing registered trade names.
4. Get Initial Approval: Get the initial approval from the DET. This is to make sure that the government has no problem with your proposed business activity and company structure.
5. Draft a Memorandum of Association (MoA): A Memorandum of Association needs to be prepared and notarized for LLCs and multi-partner companies. This document includes the company’s ownership and structure along with activities and shareholder responsibilities.
6. Secure Business Premises: Companies in the Dubai mainland are needed to have a physical office address. You must rent or lease a commercial space and get an Ejari certificate from the Real Estate Regulatory Authority (RERA).
7. Get External Approvals (if applicable): A few business activities may need additional approvals from regulatory authorities like the Dubai Health Authority (DHA) or the Roads and Transport Authority (RTA).
8. Pay DED Fees and Receive the Trade Licence: After the approval of the documents and payment of the fees, the DET will issue your mainland trade license. They will officially approve your business to start operations.
9. Register for VAT (if applicable): You need to register for VAT with the Federal Tax Authority (FTA) if your expected annual turnover is more than AED 375,000*. Businesses can register voluntarily with turnover above AED 187,500.
10. Process Employee Visas: After the trade license is issued, you can apply for establishment cards and also apply for residence visas for yourself and your staff through the General Directorate of Residency and Foreigners Affairs (GDFRA).

Cost of Mainland Business Setup in Dubai

One of the most general questions from business owners related to the Dubai mainland company is: how much does it cost to set up a mainland business? The overall cost of setting up a mainland business in Dubai depends on a lot of factors. Below is a general breakdown of those factors:

How can Flyingcolour Business Setup Help You in Mainland Business Setup Dubai?

As you have read in this article, Mainland Dubai can provide numerous benefits to business owners.  It indicates that you may obtain uncountable benefits by starting a business in Mainland Dubai. Flyingcolour Business Setup Services can help you to start your company in this area.  In addition, we will ensure you get these benefits.

Frequently Asked Questions: Mainland Business Setup Dubai

Q1. What is the difference between a mainland and free zone company in Dubai?

Mainland companies can freely trade anywhere in the UAE and can also work for government contracts. Free zone companies on the other hand, are not eligible for operating within their zone or internationally.

Q2. Can a foreigner own 100% of a mainland company in Dubai?

Yes. After the 2021 UAE commercial law amendment, foreign nationals can now own 100% of mainland companies across most approved business activities.

Q3. How long does it take to set up a mainland company in Dubai?

With proper and complete documentation, mainland company setup in Dubai usually takes between 5 and 10 working days based on the activity and approvals needed.

Q4. Is there a minimum capital requirement for a mainland company in Dubai?

No. Majority of the mainland business activities in Dubai have no minimum capital share requirement thus all size of business can access it.

Q5. What licences are available for Dubai mainland companies?

Dubai mainland provides thee license types:

• Commercial for trading
• Professional for services
• Industrial for manufacturing

To learn more about the Benefits of Mainland Business Setup Dubai, book a free consultation with one of the Flyingcolour team advisors, Simply call  +97144542366 or send WhatsApp messages to +971554413566. you can also drop an email to info(at)flyingcolour(dot)com. *Please note that this article was published on 07/03/2024 by the federal policies and updates at the time of writing. For the latest info please talk to our consultant