The global business center offers many options for entrepreneurs and investors. One of the most popular ways to find a company in Dubai is to establish a mainland company. Mainland businesses allow businesses to operate across Dubai and in the larger VAE market, as opposed to the free zone, a location defined by a location with specific laws. This article provides detailed information on the benefits, conditions, procedures and key factors of forming a mainland enterprise in Dubai.

What is a mainland company?

A mainland company is simply an onshore entity registered with the relevant emirate’s government body. The Emirate’s Department of Economic Development (DED) issues its trade license. The fundamental feature of a mainland company is that there are no restrictions on its commercial activities. However, you require a local sponsor or a UAE national to be a partner in the company for some business activities.

Benefits of Mainland Company Formation in Dubai:

1. Access to the local market:
Mainland companies can trade directly with the VAE market, including state contracts and local businesses.

2. No restrictions on office location:
In contrast to the free zone, mainland businesses can set up offices anywhere in Dubai.

3. Ability to bid on government tender:
Mainland companies are entitled to participate in government bids and projects.

4. No currency restrictions:
Companies can process in any currency without restrictions.

5. Flexibility in Business Activities:
Mainland companies can carry out a wide range of commercial, industrial and professional activities.

6. Sponsors and Visa Benefits:
Mainland businesses can sponsor visa employees and their families by the United Arab Emirates.

Types of mainland companies in Dubai:

1. Limited Liability Company (LLC):
The most common type of LLC of mainland companies requires at least 51% of VAE National owners. Suitable for small and medium-sized businesses.

2. Sole Establishment:
A company belongs to a person with 100% national assets in the United Arab Emirates.

3. Civil Company:
Used typically by experts such as doctors, lawyers, and engineers. 100% of the VAE national owners are required.

4. Branch office:
Branches of foreign companies can be set up in Dubai to carry out the same activities as the parent company.

5. Representative Office:
Special offices are limited to promoting the activities of the parent company and not directly implementing the company.

Steps to form a Mainland Company in Dubai:

1.Decide your business:
Determine what type of business you want to run. DED has a list of over 2,000 approved activities.

2. Select the company name.
Choose a clear company name that corresponds to the VAE practices. Names should not contain insulting language or religious references.

3. Safe Local Sponsor:
For most businesses on the mainland, a UAE state or company must maintain at least 51% of its VAE ownership stake. However, certain professional services allow 100% of foreign property under certain conditions.

4. Apply for initial approval:
Submit your initial permit application to DED. This step confirms that the government is not challenging its business.

5. Memorandum of Association (MOA) Design:
Preparing MOAs where the structure, property and activities of the company are torn apart. The MOA must be notarized by a notary in the United Arab Emirates.

6. Office space under lease:
Mainland businesses need physical office space. Leasing offices that meet DED requirements.

7. Receive additional permission:
Depending on your business, you may need permission from other government authorities such as the Ministry of Health, Ministry of Education, Dubai, etc.

8. Register your company:
Send all necessary documents to DED and pay the registration fee. Once approved, you will receive a trade license.

9. Open a corporate bank account:
Open a corporate bank account by selecting a bank in Dubai. A trade license, MOA and other documentation are required to complete the process.

10. Receive an employee’s visa:
Apply for a residency visa to yourself and your employees through the General Affairs Bureau (GDRFA) for Residency and Forkers Affiliation (GDRFA).

Documents Required for Mainland Company Formation:

• Passport copies of shareholders and managers
• Visa copies (if applicable)
• No Objection Certificate (NOC) from current sponsor (if applicable) Business plan
• Memorandum of Association (MOA)
• Lease agreement for office space
• Initial approval certificate
• Additional approvals (if required)

Costs of Formation of Mainland Enterprises in Dubai:

The cost of forming a mainland enterprise in Dubai varies depending on business, office space and other factors. The main costs are:

1. Commercial License Fee:
The cost of a transaction license depends on the type of business (commercial, industrial, or professional) and the number of activities to be included.
Commercial license: 15,000 to 25,000 AED 25,000 per year
Special license: 15,000 AED 15,000 per year
Industrial license: 15,000 AED 30,000 per year

2. Office space rental:
Mainland companies require physical office space. Rental costs vary depending on the location and size of your office.
Average cost: 20,000 to AED 100,000 per year (depending on area and office dimensions)
Ejari (rental agreement) registration: AED 2,000

3. Local Sponsor Fee:
If your company requires a national sponsor (51% property) of the VAE, you must pay an annual sponsor fee.
Average cost: AED 10,000 to AED 50,000 per year (depending on contract with sponsor)

4. Government Fees:

• Initial Approval Fee: AED 1,000 to AED 2,000
• Trade Name Reservation: AED 620
• Notarization of Memorandum of Association (MOA): AED 2,000 to AED 5,000
• DED Registration Fees: 15,000 to AED 10,000 (depending on business activity)
• Additional approvals: AED 1,000 to AED 5,000 (if required for a specific activity)

Conclusion:

By giving companies the freedom to operate throughout the emirates and get access to lucrative government contracts, mainland company formation in Dubai offers a door to the booming UAE market. Even if the procedure calls for some things, such office space and local sponsorship, the advantages of forming a mainland business greatly exceed the drawbacks. Dubai continues to draw businesspeople and investors from all over the world because of its advantageous location, welcoming atmosphere, and strong infrastructure. You may effectively create a mainland business in Dubai and take advantage of the vibrant local economy by following the procedures described in this book.

Why Easy Step?

Easy Step Consultancy has 10+ years of experience in UAE, at ESC we are specialized in Company Formation to Bank Account.