Company Formation in Dubai Mainland
Overview of Dubai's Business Environment
Dubai’s business environment is uniquely structured to cater to the diverse needs of entrepreneurs. The mainland, with its expansive trading opportunities within the UAE, contrasts with the free zones that, while offering certain advantages, come with specific restrictions on business activities. Navigating this landscape requires a careful consideration of stringent laws and regulations that govern each business setup. Success in company registration is intricately tied to adherence to government standards, making the selection of the right jurisdiction a strategic decision for any aspiring entrepreneur in Dubai.
Benefits of Setting Up a Company in Dubai Mainland
- There is no stringent minimum capital requirement for establishing a mainland company.
- Unlike free zones, there are no limitations on business activities.
- Owners of mainland businesses have the flexibility to open offices anywhere in Dubai.
- Company formation in Dubai allows 100% repatriation of capital and profits, and these are exempt from corporate tax.
Types of Business Legal Entities in Dubai Mainland
Selecting an appropriate legal framework is a pivotal decision for an investor when establishing a company in Dubai mainland. The legal structure of such a company is determined by the number of shareholders, with the Dubai Department of Economic Development (DED) permitting the following legal structures:
A civil company
A civil company is a business partnership owned by two or more partners practicing a professional activity such as: tailors, beauty salons, consultancy or training, etc.
Limited Liability Company (LLC)
The Limited Liability Company (LLC) stands out as a popular legal structure in Dubai mainland. Foreign investors can establish an LLC with 2 to 50 shareholders, and each shareholder’s liability is limited to their shares in the company. Foreign investors are permitted 100% ownership in LLCs for specific activities outlined by the DED, such as General Trading Licenses.
One-Person Limited Liability Company
A One-Person Limited Liability Company (LLC) allows UAE or GCC nationals, whether natural or legal persons, to establish and own a company. The company’s name must be linked to the owner’s name, followed by the designation ‘One-Person Limited Liability Company.’ However, citizens of other countries are not eligible to establish such entities. The One-Person LLC is subject to all laws governing limited liability companies, and interested parties should refer to specific requirements and regulations applicable to such entities for compliance.
Branches of Foreign Companies
Branches of a foreign company can conduct the same activity as the parent company, provided that the conduct of direct commercial and industrial activities shall be subject to the approval of competent authorities.
Branches of Free Zone Companies
This legal form refers to branches of the companies established in the free zones all over the UAE.
Dubai Mainland Licenses Issued to Businesses
Entrepreneurs must initially acquire a business license to engage in any business activities in Dubai. Conducting business in Dubai mainland without a valid trade license is considered a punishable offense. The Department of Economic Development (DED) serves as the regulatory authority overseeing the issuance of business licenses in Dubai mainland. The DED issues various types of licenses for company establishment in Dubai mainland:
Commercial License
This license is granted to businesses involved in activities such as the trading of goods, encompassing importing, re-exporting, and trading of permitted goods. Permissible activities span wholesale and retail trade, construction, transportation, stockpiling, communication, financial intermediation, real estate, and leasing. Foreign investors obtaining a commercial license in Dubai mainland are entitled to full ownership of their company.
Professional License
This license is specifically tailored for individuals who provide professional services based on their intellectual or artistic abilities.
Industrial License
The Industrial License Applies to all manufacturing, production, packaging, separation, and assembly activities, including the manufacturing of food products, textiles, paper, petroleum products, equipment, and devices.
Business Setup in Dubai Mainland Process: Step-by-Step Guide
- Identify the Nature of Your Business Activity
- Determine Your Company’s Legal Structure
- Register the Trade Name
- Apply for Initial Approval from the Department of Economic Development (DED)
- Establish a Local Service Agent agreement (LSA) or draft a Memorandum of Association (MOA).
- Choose Your Business Location
- Apply for Additional Government Approvals
- Submit Required Documents
- Pay Fees and Collect License
- Register Your Company with the Chamber of Commerce and Industry
Company Registration in Dubai Mainland
The last step to set up a company in Dubai Mainland is to register it with the Chamber of Commerce and Industry. This final step ensures your business is officially recognized and ready to operate in the city.
The Cost of Registering a Company in Dubai Mainland
The cost of registering a company in Dubai mainland varies and is influenced by several factors. These factors include different fees associated with various license types, additional charges for specific activities within each license type, the number of visas required for employees and sponsors, the choice between a physical or virtual office, and the inclusion of extra services like PRO services, accounting support, and marketing assistance.
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Legal Requirements and Documentation for Setting up a Company in Dubai Mainland
| For Individuals | For Corporate Entities |
|---|---|
| • Passport copy • Photo • UAE entry stamp/resident visa • Emirates ID • NOC Letter • Original Passport • CV • Business description • University degree • Bank statement | • Memorandum & Articles of Association • Power of Attorney • Good Standing Certificate • Directors and Shareholders Details • Audited Financial Statements • Company Profile • Passport Copies of Directors/Authorized Signatories • Bank Reference Letter • Notarization & Legalization • Corporate Shareholder Resolution. • Board Resolution • Certificate of Incorporation |
FAQs
How does a mainland company in Dubai differ from a free zone company?
Free zone companies in Dubai have the liberty to conduct business exclusively within the free zone or internationally, with restrictions on the geographical scope of their operations. On the other hand, mainland companies in Dubai face no such limitations and enjoy the freedom to engage in business activities anywhere within the UAE and globally.
What is a mainland company?
Mainland company is an onshore company certified by the Department of Economic Development (DED) of the specified emirate. It is permitted to conduct business within local markets and internationally, without any restrictions in the United Arab Emirates.
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