Mainland Company Formation in Dubai : Process & Cost Involved

What is Mainland Company in Dubai

Mainland company formation in Dubai refers to setting up a business in the heart of the city, outside of the free zones. This option is ideal for those looking to engage directly in the local UAE market. When you set up a business in Dubai mainland, it offers greater flexibility in business operations and the ability to trade anywhere in the UAE or internationally. The process involves specific steps and documentation, making it essential to understand the requirements for a smooth business setup in Dubai

Benefits of Mainland Company Formation in Dubai

Forming a mainland company in Dubai offers numerous advantages, making it an attractive option for entrepreneurs and businesses looking to establish themselves in the UAE. Here are the key benefits:

1. Direct Access to UAE Market

• Advantage: Mainland companies enjoy unrestricted access to the expansive UAE market, allowing them to trade freely across all emirates without limitations. This offers businesses greater opportunities for growth and market penetration.

2. No Limit on Business Activities

• Advantage: Unlike free zone companies, mainland companies are not limited to specific business activities or industries. They can engage in a wide variety of operations, from consulting and manufacturing to retail and e-commerce.

3. Ability to Trade Anywhere in the UAE and Globally

• Advantage: Mainland companies can conduct business anywhere within the UAE and internationally. This offers greater flexibility in trading with local and global clients, enhancing business expansion opportunities.

4. 100% Repatriation of Profits and Capital

• Advantage: One of the most significant benefits of mainland company formation is the ability to fully repatriate both profits and capital. This provides financial flexibility and makes Dubai an attractive hub for international businesses.

5. Eligibility for Government Contracts

• Advantage: Mainland companies are eligible to bid for government contracts, which often come with lucrative opportunities. This is a major advantage over free zone businesses, which are usually excluded from such opportunities.

6. Ease of Getting Visas for Employees

• Advantage: Mainland businesses can easily sponsor employee visas, which allows them to build a strong, diverse workforce. The process is straightforward, and there are no significant restrictions on the number of visas a company can apply for, depending on office size.

7. Networking and Growth Opportunities

• Advantage: Being part of the mainland allows businesses to network with local companies, government bodies, and industry associations. This fosters collaboration and offers valuable opportunities for growth and strategic partnerships.

8. No Currency Restrictions

• Advantage: Dubai mainland businesses benefit from no currency restrictions, making international transactions seamless. This is particularly beneficial for businesses with global operations or clients across different markets.

9. Simple Legal Formalities

• Advantage: The legal process for establishing a mainland business in Dubai is clear and streamlined, reducing bureaucracy and making the setup process more efficient. This allows businesses to focus on their operations rather than navigating complex regulatory frameworks.

Documents Checklist for Mainland Business Setup in Dubai

Setting up a mainland business in Dubai requires gathering several key documents for a smooth process. Here’s a comprehensive checklist of the essential documents needed:

1. Trade License Application

• This document outlines your intended business activities. It's the first step in applying for your Dubai mainland business license.

2. Passport Copies of Shareholders

• Clear and valid copies of all shareholders' passports are required for the application process.

3. UAE Resident Visa (If Applicable)

• If any of the shareholders are UAE residents, their UAE resident visa copies must be provided.

4. Emirates ID (For UAE Residents)

• A copy of the Emirates ID of shareholders who are residents of the UAE is needed.

5. No Objection Certificate (NOC)

• A NOC is required from the current sponsor for foreign shareholders who are UAE residents. This document confirms the approval of the sponsor for the shareholder's business activities.

6. Local Sponsor Agreement

• For expatriates setting up a mainland business, a Local Sponsor Agreement is mandatory. This agreement details the partnership with a UAE national sponsor, who will hold a 51% stake in the company.

7. Office Lease Agreement

• Proof of a physical office space in Dubai is essential, as having a physical location is a requirement for company registration.

8. Memorandum of Association (MOA)

• This is a legal document that outlines the company’s structure, the shareholding details, and the scope of business activities.

9. Dubai Chamber of Commerce Membership

• Membership is required to engage in trade and business activities within the Dubai Chamber of Commerce, ensuring legal recognition.

10. EJARI Registration Certificate

• This certificate confirms the registration of the office space, verifying the tenancy details and the address of the office.

Important Considerations

While this list covers the most common documents for mainland business setup in Dubai, the requirements may vary depending on your business activity and the specific conditions set by the Department of Economic Development (DED). It's always best to consult with a business setup expert in Dubai to ensure you have the most current information and understand all the requirements for your particular business type.

By ensuring all these documents are correctly prepared, you can streamline the process of setting up your business in Dubai and avoid unnecessary delays.

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Key Steps for Mainland Business Setup in Dubai

Setting up a business in Dubai's mainland is a straightforward process when you follow the right steps. Here's a detailed guide to help you navigate the process:

1. Choose Your Business Activity

The first crucial step is to determine the type of business you wish to run. Dubai offers various business activities such as trading, consulting, manufacturing, or e-commerce. The nature of your business activity will directly influence the type of license required for your operations.

2. Select a Trade Name

Next, you need to select a unique trade name for your business. The name should adhere to UAE regulations, avoiding offensive or religious terms. It should also not resemble any existing company name. You can check the availability of the name through the Department of Economic Development (DED) or the UAE Ministry of Economy.

3. Apply for Initial Approval from DED

Once your business activity and trade name are decided, apply for initial approval from the Department of Economic Development (DED). This approval acts as a confirmation that your business complies with the UAE's legal structure, allowing you to proceed with setting up your company.

4. Secure Office Space

A physical office is a mandatory requirement for all mainland businesses in Dubai. You must secure an office space and submit the lease agreement to the DED as part of your application. The office space will be a reflection of your business's operational needs.

5. Submit Required Documents and Apply for a Mainland License

Once you’ve gathered all the necessary documentation, including the trade name certificate, initial approval, office lease, and your memorandum of association (MOA), submit them to the DED. The MOA outlines the company’s structure and operations. Upon approval, you will receive your business license, which allows you to legally operate your business in Dubai.

6. Obtain Additional Approvals (If Applicable)

Depending on your business type, you may need additional approvals from specialized authorities (e.g., healthcare, education, or financial sectors). These sector-specific regulations apply depending on the nature of your business.

7. Open a Corporate Bank Account

With your business license in hand, you can open a corporate bank account. Dubai offers several local and international banks that cater to business needs, ensuring smooth financial transactions for your company.

8. Apply for Visas

Once your company is registered, you can apply for investor and employee visas. Mainland companies are granted flexibility in visa issuance, with no restrictions based on the number of visas. The number of visas you can sponsor depends on the size of your office.

Local Sponsorship

An essential part of the mainland business setup in Dubai is obtaining a local sponsor, who is required to hold 51% of the business shares. This sponsor acts as a partner and helps you navigate the local regulatory landscape. The sponsorship agreement is essential for ensuring compliance with UAE’s business laws.

By following these steps, you can establish a legally compliant business in Dubai’s mainland, allowing you to tap into the local market, government contracts, and numerous opportunities for growth.

This process requires careful consideration and compliance with local regulations, but with the right guidance, it’s a straightforward and highly rewarding experience.

Get Required Approvals and Your Mainland Company License in Dubai

• Select Your Business Activity: Choose the specific business activity or activities for your mainland business setup in Dubai, which will determine the type of license you need.
• Decide on Your Business Structure: Opt for a legal form that suits your business goals, like an LLC, sole proprietorship, or partnership.
• Apply for Initial Approval: Reach out to the Dubai Department of Economic Development (DED) to get initial approval for your business.
• Choose a Trade Name: Pick a unique trade name for your business, following the DED's naming guidelines.
• Draft MOA and/or LSA Agreement: Prepare your Memorandum of Association (MOA) and, if applicable, a Local Service Agent (LSA) agreement.
• Finalize Business Location: Secure an office space or commercial premise and get your tenancy contract and EJARI registration.
• Obtain Special Approvals: If your business requires, get additional approvals from relevant government bodies.
• Submit Final Documents to DED: Provide all necessary documents to the DED for final approval.
• Pay the Required Fees: Clear all the government and administrative fees to receive your mainland business license in Dubai.

Following these steps will ensure a seamless process in obtaining your mainland business license in Dubai.

Cost of Starting a Business in Dubai and the UAE

When considering starting a business in Dubai or the broader UAE, the costs can vary significantly based on the type of business, its location (mainland, free zone, or offshore), and specific government regulations. Here's an overview of the costs for setting up a Mainland Business (specifically a Limited Liability Company (LLC)), as well as some related costs for Commercial and Professional Licenses:

Mainland Business Setup / LLC Company Formation Costs

1. Initial Approval (One-Time Government Fee)

• Commercial License: AED 120
• Professional License: AED 120
• This fee applies when you first apply for approval from the Department of Economic Development (DED).

2. Name Approval (One-Time Government Fee)

• Commercial License: AED 620
• Professional License: AED 620
• This fee ensures that your business name complies with UAE regulations and is available for use.

3. Tasheel Fee (One-Time Government Fee)

• Commercial License: AED 230
• Professional License: AED 230
• This service fee covers the submission of documents for processing.

4. Notarization of MOA (Memorandum of Association)

• Commercial License: AED 1,500
• Professional License: AED 900
• The MOA is an essential legal document outlining the company’s structure, which needs to be notarized.

5. License Fee (Annual Government Fee)

• Commercial License: Approx. AED 10,000
• Professional License: Approx. AED 5,600
• This is the annual fee for maintaining your business license with the DED.

6. Market Fee

• A fee levied at 2.5% of the premises' annual rent, though this is currently exempt.
• Commercial License: AED 500 (approx., if the fee is applied)

7. Foreign Name Charges (if applicable)

• Commercial License: AED 2,000
• This fee applies if the business name is foreign and not in Arabic. If the name is in Arabic, these charges can be avoided.

Additional Considerations:

• Costs Can Vary: The costs mentioned above can change based on current government regulations or updates to the business setup process.
• Service Charges: If you opt for professional assistance in setting up your business, service charges by business setup consultants, legal advisors, or other third parties will apply.
• Premises Costs: Aside from government fees, leasing office space is another significant cost. Mainland businesses require physical office space, which can vary in cost depending on location and size.

Setting up a business in Dubai requires a clear understanding of the various fees and steps involved. Costs are subject to change, and it is always advisable to consult with a business setup expert or local authority for the latest information and to ensure compliance with all legal requirements.