You thought it was just about the address? No, it’s not. Location is an important factor to consider when you are thinking of a business setup in Dubai. While there are plenty of reasons why setting up your business in Dubai can work out well, there are also risks involved, and with no golden rule on where you should set up your business, location matters. Before choosing a location hire a business setup consultant who can help you with finding the perfect location for your business setup in Dubai, UAE.
Why choose Dubai Mainland for company formation?
There are three types of company formation in Dubai: Mainland – LLC formations; Free zones – FZE, FZC formations and Offshore companies which do not require physical existence. The mainland consists of areas outside the free zones in the UAE. The companies in mainland are also known as onshore entities and you need to obtain a licence from the Department of Economic Development (DED) to run a business in the Dubai mainland.
A business owner who wants to form a company in Dubai must consider the pros and cons of freezone and the mainland. Without a doubt mainland companies offer numerous benefits.
The Department of Economic Development (DED) offers many advantages to entrepreneurs, investors, and companies looking to start a business in Dubai. One drawback is that it requires new businesses formed on the mainland share ownership with UAE nationals: at least 51% must be owned by them. However this was removed in July 2021. Now business owners who opt for mainland company formation in dubai can have 100% ownership of their business without the need of a local sponsor.
Benefits of Mainland Company Formation in Dubai.
- Mainland business registration offers flexibility to new entrepreneurs
- A mainland company can freely sell goods in any market within the UAE, including Dubai.
- While a free zone company is only allowed to operate within the confines of its designated area, a mainland/onshore firm can carry out business both in UAE and overseas markets.
- To acquire a mainland company licence, there is no need for capital requirements except for few set by UAE laws in certain cases
- The mainland’s company registration process is much simpler and easy due to fewer regulations and restrictions.
- Mainland companies are subject to fewer limitations and enjoy greater opportunities than those that operate in free zones.
- Unlike free zone companies, which can only work with private commercial entities, mainland players have the freedom to earn government contracts.
Types of Dubai Mainland License:
Professional Licence: Regulated by the Dubai government, professional licences are given to all individuals and companies hoping to establish a business in Dubai. Its purpose is to verify that each applicant has the required expertise needed to carry out his or her profession’s services properly. Applicants for these licences are typically required to demonstrate certain skills or training.
Commercial Licence: Commercial trade licences are granted to companies that plan to engage in buying and selling or any other kind of trading activities.In the UAE, there are various types of commercial trade licences. The type you need depends on what kind of trading activities you want to perform as part of your business.
Broadcast and communications companies, rental transportation services, retail companies, construction businesses—in fact any business that trades in goods or provides a service to customers in the course of its work—all have to obtain and apply for commercial licences before they can legally start doing business in dubai.
Industrial Licence: The Industrial or Manufacturing licence is provided to business people willing to conduct industrial or manufacturing-based activities in the UAE, such as the conversion of natural materials into their end products.
The DED (Department of Economic Development) gives out the licences for industrial activity, but other ministries might have to approve them if they deal with sectors like finance or energy etc.
Are Dubai mainland Licence holders allowed to do business in the other Emirate?
Unlike a free zone licence, having a mainland business licence gives you access to the entire UAE market without any restrictions. With your mainland company licence, you can do business not just within Dubai but also across the Emirates without limitations.
Dubai Mainland License Cost
Dubai Professional License Cost: To get a professional licence in Dubai, you will have to pay around AED 15,310. This includes the fees for getting your licence as well as charges from service agents and payment to trade name registries.
Dubai Commercial License Cost: The cost of a commercial licence in Dubai can vary anywhere between 15,000 AED to 50,000 AED, depending on various factors—from the type of business activities that the applicant is planning to carry out. The cost for DED traders’ licences costs AED 1070 excluding Chamber fees (which total AED 300).
Dubai Industrial Licence Cost: The total cost of obtaining an Industrial licence in Dubai, UAE can exceed AED 35,000 when taking into account the costs associated with additional licences and registrations. In addition to that a company must also lease space before it is able to receive its licence.
Dubai Mainland with 100% ownership
Thanks to the recent changes in law (which came into effect on June 1, 2021), companies with mainland ownership are now allowed 100 percent control of businesses that engage in 1000+ commercial and industrial activities—in any emirate of the UAE. Although full ownership is not allowed for professional licences in dubai.
In addition to the complete foreign ownership allowed for UAE mainland companies, branches of foreign companies based in the Emirates no longer have to appoint a National Service Agent (NSA).
However, for certain businesses, the entity must appoint a local service agent even though ownership of the company belongs to foreign investors. The type of business you set up in the UAE will determine whether this is mandatory or just advisable.
The Emirates of Abu Dhabi and Dubai have recently made public their lists of 1,000+ approved activities each across a wide variety of sectors that are open to 100% ownership by foreign investors. Those categories include:
- Maintenance & repair
- Hospitals, and
- Investment & trade
Although various industries are allowed to have 100% foreign ownership, certain entities like finance, insurance and banking might be subject to at least some portion of the shares being holded by an Emirati national or a local sponsor.
If you are considering opening up a business in Dubai Mainland, it is best to consult with a Business Setup Consultant first so that you can find out whether or not foreign ownership of your company is permitted.
Dubai Mainland Company Formation Process
Dubai mainland company formation consist of four types
1.) Limited Liability Company (LLC)
2.) Professional Firm / Civil Company
3.) Branch of Foreign company
4.) Representative Office.
The UAE government has launched a Bashr service, an online platform which allows entrepreneurs to establish Dubai mainland company in 15 minutes by integrating federal and local government entities .
Below are the steps involved in mainland company formation in dubai
Determine business activity
Business activities in Dubai are divided into three different types: industrial, commercial and professional. Each of these categories is further divided into detailed types, such as agricultural, automobile repair and car wash, trade, building materials and industry etc. If you have your own company already and you want to expand it in Dubai or any other emirate then you need to first determine the type of licence (whether industrial, commercial, professional, tourism or agricultural) you have to first identify the nature of your company.
Decide the legal structure
After determining the trade licence type to apply for, the next step is to determine the legal form of the company. Depending on the business requirements, this is the basis for determining applicable laws and regulations. Make sure the legal form of your business matches your business activity. Here’s a list of some of them:
- General partnership
- Limited partnership
- Limited liability company (LLC)
- Public joint stock company (PJSC)
- Private joint-stock company (PrJSC)
- Civil company
- Local company branch
- GCC company branch
- Foreign company branch
- Free zone company branch
- Sole establishment
- Holding companies
Register the trade name
When it comes to establishing a business, you have to consider the name of your company in detail. You must choose a suitable trade name that reflects the nature of your business and complies with the UAE trade name rules. You can register your business through Dubai Economic Department (Dubai Ministry of Economy) by either registering an application via the internet or through its mobile application. A qualified business consultant in Dubai such as Al Hadif Business Setup can help you find the right name for your business, but also help secure registration of the trademark with the Ministry of Economy.
Your trade name must be followed by the business structure acronym (such as LLC, EST, PJSC) and cannot violate public morals or order.
Check to make sure your proposed trade name is not already in use by another company, and does not contain words or names that might be confused with those of other businesses.
Apply for initial approval
An initial approval means that you can establish a business in Dubai as long as you are doing so within the permission of the UAE. The initial approval does not give you the authority to run or practice your business activity. Before you can apply for the initial approval, make sure that you have approval from the General Directorate of Residency and Foreigners’ Affairs. Certain activities (such as legal, security, and financial services) require additional approval from government entities before applying for an initial license.
Complete and sign MOA & LSA
A memorandum of association or local service agent agreement (if applicable) is needed by all legal entities operating in Dubai(Limited partnership, Limited liability company (LLC), Public joint-stock company (PJSC) or Private joint stock company (PrJSC).). These are to be completed as per the UAE legislation company. It is advised that you approach a business setup Consultant in Dubai such as Al Hadif Business Setup.
Find a perfect business location
Businesses in the UAE must have a physical address to operate. The location you lease or rent for your business operations must be within zoning regulations, and fulfil the requirements of the Department of Economic Development (DED) as well as being approved by Dubai municipality’s Land Planning Department.
For Mainland Company Formation in Dubai the rental agreement must be registered with Ejari
Obtain additional government approvals
Some business or trade activities require additional approval from institutions or bodies that govern them they are
- Ministry of Interior, Ministry of Justice
- Telecommunications & Digital Government Regulatory Authority (TDRA)
- Legal activities & legal consultancy
- Ministry of Economy
- Supreme Petroleum Council
- Executive Council
- Local health departments
- Local municipal department are a few
Pay and obtain the license
To collect the business license in Dubai and obtain your trade license, from DED. You must pay for the trade license within 30 days of receiving the payment voucher and otherwise your application will be cancelled.
Documents required for mainland business setup in Dubai
Below are the documents required to obtaining the license
1.) Initial approval receipt and all the previously-submitted documents
2.) Copy of the lease contract duly attested by the Real Estate Regulatory Agency (RERA) in Dubai
3.) Duly attested memorandum of association (for all types of companies)
4.) Approvals from other government entities concerned, as may be required
5.) Duly attested service agent contract (for civil establishments and companies that are 100% owned by non-GCC nationals), the UAE involving a local service agent.
Hire a Dubai Mainland business setup consultant
Al Hadif is one of the leading business set up companies in Dubai and All Over UAE. We offer comprehensive company formation services to help investors and entrepreneurs establish business operations anywhere in the UAE.
Our top-quality services are not limited to just your office or shop – Al Hadif’s corporate registration consultancy services provide assistance in setting up your company. We also cover all UAE visa requirements whether they concern a single individual, a team or even your entire family! By partnering with us on the road to success, we can give you peace of mind knowing both your business and personal affairs are securely taken care of with our established track record in UAE.