Mainland Company Formation in Dubai
Is a Dubai mainland company the right choice for you? Choose from over 3,000 business activities and enjoy the freedom to trade anywhere in the UAE and overseas.
What exactly is a UAE mainland company and why is it so important to have one? A mainland company is a company licensed by the Department of Economic Development (DED) in the relevant Emirate of the United Arab Emirates. Here’s a summary of the benefits of company registration on the UAE mainland, plus a guide to business setup on the Dubai maniland!
Benefits of mainland company formation in Dubai
Setting up a mainland company in Dubai comes with many advantages. Here are some key benefits:
Wider Business Opportunities: Mainland companies can trade anywhere in Dubai and across the UAE, giving you access to a larger market.
Full Ownership: You can have 100% ownership of your business, providing you with full control and flexibility.
Flexible Locations: Choose from various locations to set up your business, allowing you to find the best spot for your needs.
These benefits make mainland company formation an attractive option for entrepreneurs looking to grow and succeed.
Location flexibility and zero trade restrictions
With a Dubai mainland company, you can trade freely with other businesses and have unlimited location options. These companies can also offer services to the government and sell directly to consumers anywhere in the UAE. Plus, setting up a mainland company allows you to open multiple branches, establishing a strong presence throughout the Emirates.
Broad working scope
Mainland businesses can take on a wide range of work. If you want to diversify your services within the mainland, simply re-register the new business activity with the DED, and you can start trading freely.
Access to lucrative government contracts
A large incentive to set up a mainland business in Dubai is the access to valuable government contracts in the UAE. In recent years, the Abu Dhabi Executive Council approved AED 17.5bn (USD 4.76bn) of spending on government projects, including over AED 4bn on infrastructure. Approximately AED 2bn was allocated for education and a combined AED 1.2bn on upgrades to governmental and social facilities. As an established mainland company in Dubai, you’ll be well-positioned to take advantage of these opportunities.
100% ownership control of mainland business entities
Traditionally, 100% foreign ownership of a UAE business entity was only possible under two circumstances:
- When setting up in a free zone or
- When establishing a professional services company in the mainland (Sole Establishment or Civil Company)
In recent years, HH Sheikh Mohammed bin Rashid Al Maktoum has allowed 100% foreign ownership of mainland companies in the UAE. This has been a welcome change for prospective overseas investors looking to conduct business in the Emirates. This is great news for international investors new to the Emirates. 100% foreign ownership means business owners can get straight down to business, without the need to canvass for an Emirati company or individual to act as a partner. 100% foreign ownership of mainland UAE business provides incredible potential for the UAE’s growth-machine economy to foreign investors. However, certain strategic sectors, such as oil and gas, still require a local partner.
Your checklist for mainland business setup in Dubai It’s time for your business setup checklist. Let’s get your venture off to a successful start!
Choose your business activity
The first thing to decide before you set up a company in the UAE mainland is the industry in which you will trade. There are thousands of permitted business activities as listed by the Department of Economic Development (DED). Some of these include trading, agriculture, hospitality and manufacturing. Unlike many free zone businesses that are restricted from certain activities based on their location, mainland businesses are free to trade in any of the 2000+ DED-listed activities.
Find the ideal location for your business in the UAE
Once you’ve decided your business activity, the next step is to decide where you wish to operate. Businesses on the UAE mainland incur no restrictions on where they can set up. The right location will depend on many factors such as budgeting and your chosen business activity. Should your company rely on imports and exports, then setting up near one of the UAE’s busy ports – Jebel Ali, Mina Zayed or Mina Khalid – makes perfect business sense. Another advantage of mainland business setup in Dubai is the ease of opening branch offices. This means businesses are not limited to one location and can build a large local presence over time.
Determine your business legal structure
From a legal standpoint, there are several types of businesses that can be set up by foreign entrepreneurs on the UAE mainland. The most common mainland business structure is a Limited Liability Company (LLC). An LLC is an independent legal entity owned by two or more shareholders. A business wishing to trade under a commercial or industrial licence (including industrial and manufacturing activities) must form an LLC to set up a company in the UAE mainland. This would require a local sponsor. By contrast, setting up a professional service company does not require a foreign sponsor and can be 100% foreign-owned. More on this next!
Obtain a local sponsor or local service agent
Previously, foreign entrepreneurs could only manage mainland business setup in Dubai by partnering with either a sponsor or local service agent. If trading under a commercial or industrial licence as an LLC then a local sponsor is required. Your local sponsor can either be a UAE national or a UAE-based company. In both cases, the local sponsor will own 51% of the business.
Novelty can provide you with a Corporate Nominee to act as your Local Partner. This allows you to retain 100% operational and financial control of the business and protects you against any risk. When setting up a professional company in the mainland, only a local service agent (LSA) is required. The LSA will not own any share of the business and will only act as a representative in all administrative dealings and with the government.