A Comprehensive Guide to Setting Up a Mainland Company in Dubai

Dubai, the bustling business hub of the Middle East, offers an ideal environment for entrepreneurs looking to establish a foothold in one of the world’s most dynamic markets. With its strategic location, world-class infrastructure, and favorable business climate, Dubai has become a global business destination for investors across various industries. Setting up a mainland company in Dubai provides access to the local market and the opportunity to tap into the vast potential of the UAE’s economy. In this blog, we’ll explore the key steps, benefits, and considerations involved in setting up a mainland company in Dubai.

What is a Mainland Company in Dubai?
A mainland company refers to a business registered within the UAE that is allowed to operate anywhere in the UAE market. Unlike free zone companies, which can only operate within the confines of a specific free zone or internationally, mainland companies have the freedom to conduct business across the entire UAE without any restrictions. They can also directly engage with government entities, trade, and establish physical offices anywhere in Dubai.

Mainland companies in Dubai are governed by the UAE’s Federal Law, and they require a local sponsor or service agent, depending on the business type, unless they are fully owned by GCC nationals. This makes setting up a mainland company an attractive option for those looking to maximize their market reach.

Key Steps to Set Up a Mainland Company in Dubai
Determine the Business Activity

The first step in setting up a mainland company in Dubai is determining the type of business activity you wish to pursue. The Department of Economic Development (DED) in Dubai has a list of over 2,000 business activities, and the activity you select will determine the type of license you need. This is an essential step as it impacts your license, approvals, and other regulatory requirements.

Depending on the nature of your business, you may be required to obtain additional approvals from specific government authorities, such as the Dubai Municipality, the Ministry of Health, or the Telecommunications Regulatory Authority.

Choose a Company Structure

Dubai offers various company structures, and selecting the right one is crucial for the success of your business. The most common structures for mainland companies include:

Limited Liability Company (LLC): This is the most popular structure for mainland companies. It allows for 100% foreign ownership under certain conditions, such as the use of a local service agent or sponsor.

Sole Proprietorship: This structure is ideal for individuals who want to operate their business independently.

Branch Office: Foreign companies looking to establish a presence in Dubai can open a branch office. A branch office must operate under the name of the parent company and is subject to the same regulatory requirements.

Civil Company: Civil companies are typically set up by professionals, such as doctors, lawyers, and accountants. They can be 100% owned by foreign nationals if they comply with the local regulatory requirements.

Find a Local Sponsor or Service Agent

For most mainland companies, a local sponsor or service agent is required. The local sponsor is a UAE national who holds 51% of the company’s shares, while the foreign investor retains 49%. However, in some cases, foreign investors may set up a mainland company with 100% ownership under specific conditions, such as for certain types of businesses or in partnership with government entities.

In cases where 100% foreign ownership is not allowed, the local sponsor does not have involvement in the day-to-day operations of the business but must be a UAE national. Alternatively, a local service agent (usually required for professional services) is appointed to act as a liaison between the business and government authorities.

Select a Business Location

Dubai offers a variety of options when it comes to choosing a business location, including commercial offices, retail spaces, and industrial units. The choice of location is influenced by factors such as the nature of your business, target audience, and budget. The office space must meet the requirements of the Dubai Economic Department (DED) for the specific business activity.

When choosing a location, consider factors such as proximity to major transport hubs, access to suppliers and customers, and overall accessibility.

Register with the Department of Economic Development (DED)

Once you have selected the business activity, company structure, and location, the next step is to register your business with the DED. The DED is the government authority responsible for licensing and regulating businesses in Dubai. You will need to submit your business plan, passport copies, proof of address, and other supporting documents. The DED will review your application and issue the trade license once all requirements are met.

Apply for Necessary Permits and Approvals

Depending on the type of business you are setting up, you may need to obtain additional permits and approvals from other government agencies. For example, businesses in regulated sectors such as healthcare, food and beverage, and education require specific certifications and inspections.

Some businesses also require approvals from entities like the Dubai Health Authority (DHA), Dubai Municipality, and the Ministry of Economy. The approval process can take time, so it’s important to plan ahead and ensure all necessary documents are in place.

Open a Business Bank Account

After obtaining your trade license, the next step is to open a business bank account in Dubai. Dubai is home to numerous international and local banks that offer business banking services. You will need to provide the bank with your trade license, passport copies, and proof of business address to open an account.

Having a local bank account is essential for conducting business transactions, paying employees, and managing finances. It also adds credibility to your company.

Hire Employees and Apply for Visas

Once your company is set up, you may need to hire employees to help run the business. Dubai offers various types of visas for employees, including employment visas, dependent visas, and investor visas. You’ll need to apply for visas for your staff and ensure that they meet the requirements for working in the UAE.

Benefits of Setting Up a Mainland Company in Dubai
Access to the UAE Market
A mainland company in Dubai offers the advantage of being able to conduct business across the entire UAE market, unlike free zone companies that have restrictions on where they can operate. This gives you the flexibility to engage with local clients, government bodies, and regional markets.

No Restrictions on Business Activities
Mainland companies are not limited to specific industries or sectors, unlike free zones, which often focus on niche markets. This allows mainland businesses to diversify their operations and expand into multiple industries.

Increased Credibility
Operating a mainland company in Dubai can enhance your business’s credibility, especially when engaging with local clients, government agencies, and multinational corporations. It demonstrates your commitment to the UAE market and regulatory compliance.

Full Ownership Potential
While most mainland businesses require a local sponsor, certain activities and industries now allow for 100% foreign ownership, offering greater control over your business operations.

Conclusion
Setting up a mainland company in Dubai can be an exciting and rewarding venture. The process involves careful planning, selecting the right business structure, and complying with regulatory requirements. With its strategic location, business-friendly environment, and access to both local and international markets, Dubai offers immense opportunities for entrepreneurs and investors. By following the necessary steps and seeking professional guidance, you can successfully establish your mainland company and capitalize on the growing business potential in the UAE.