Dubai is one of the world's most prominent business hubs, with a rapidly growing economy, state-of-the-art infrastructure, and a strategic location at the crossroads of Europe, Asia, and Africa. It attracts thousands of entrepreneurs every year who wish to tap into the vast potential of the UAE market. For those looking to establish a business in Dubai, setting up a mainland company is one of the most viable options.
A Dubai mainland company setup allows businesses to operate freely within the local UAE market, and it offers several advantages over free zone setups. This comprehensive guide will walk you through everything you need to know about setting up a mainland company in Dubai, including the types of companies available, the benefits, costs, and the complete process.
What is a Dubai Mainland Company?
A Dubai mainland company refers to a business entity that is established under the jurisdiction of the UAE's Department of Economic Development (DED). These companies are free to trade within the local market and can operate both inside and outside Dubai. Unlike businesses set up in free zones, mainland companies are not restricted to a specific location and have the flexibility to deal with the entire UAE market, including government contracts.
Key Features of Dubai Mainland Companies
No restrictions on business activities within the UAE.
Ability to work with government contracts.
Can operate in Dubai and the entire UAE market.
Full ownership may be allowed in certain sectors for expatriates.
Easier to open multiple branches across the UAE.
Types of Dubai Mainland Companies
There are several types of mainland companies, and choosing the right one depends on your business activity and ownership requirements. Below are the most common types of mainland companies in Dubai:
1. Limited Liability Company (LLC)
A Limited Liability Company (LLC) is the most popular form of business entity in Dubai mainland. It allows up to 50 shareholders. For an LLC, at least 51% of the shares must be held by a UAE national, with expatriate owners holding a maximum of 49% ownership. However, there are exceptions where expatriates can maintain full ownership in certain sectors under special agreements.
LLCs can operate in various sectors, including commercial, industrial, and professional services, and they are suitable for small to medium-sized businesses.
2. Sole Proprietorship
A sole proprietorship is a business owned and run by a single individual. This structure is typically used by professionals such as doctors, consultants, or artists. Sole proprietorships are fully owned by expatriates, and there is no need for a local partner. However, the business must obtain a professional license, and the owner will be personally responsible for the company’s liabilities.
3. Civil Company
A civil company is a type of professional services company, often chosen by highly skilled individuals such as doctors, lawyers, and accountants. It is completely owned by the expatriate professionals, and while a local sponsor is not needed, a local service agent is required. This local service agent is responsible for dealing with government authorities on behalf of the business.
4. Branch Office
A branch office is an extension of an existing foreign company. This allows foreign companies to establish a presence in Dubai without creating a new legal entity. The branch office must carry out the same activities as the parent company and can only operate within the scope of the business activities authorized by the parent company. While a local sponsor is not required, the branch must still adhere to local regulations.
Benefits of Dubai Mainland Company Setup
Setting up a mainland company in Dubai offers several advantages, which makes it an attractive option for both local and international entrepreneurs:
1. Access to the Local Market
One of the biggest advantages of a Dubai mainland company is the ability to conduct business throughout the UAE market. This includes interacting with local businesses and government departments, providing you with access to a wider customer base than free zone companies, which are limited to specific areas.
2. No Restrictions on Business Locations
Unlike businesses set up in free zones, mainland companies can operate anywhere within Dubai and the wider UAE. This flexibility allows businesses to choose the most strategic location to optimize their operations and growth.
3. Ability to Work with Government Entities
Mainland companies can bid for government contracts and access public sector projects. This is a significant advantage as the UAE government offers substantial projects in construction, infrastructure, and various other sectors.
4. Full Ownership in Some Sectors
While mainland companies generally require a UAE national sponsor for LLCs, there are certain business activities and sectors that allow expatriates to retain full ownership. For instance, some professional services such as consultancy, IT services, and certain specialized fields can allow expatriate owners to hold 100% ownership.
5. No Import or Export Restrictions
Mainland companies are not restricted from importing or exporting goods as free zone companies might be. This makes mainland companies an ideal option for those looking to conduct international trade.
6. Better Business Opportunities
Mainland companies have the opportunity to interact with local companies, as well as work with government and private organizations across various industries. The lack of geographical limitations expands the scope of business operations and increases potential partnerships.
Steps to Set Up a Dubai Mainland Company
Setting up a mainland company in Dubai involves several important steps, which are detailed below.
1. Determine the Business Activity
The first step in setting up a Dubai mainland company is to determine the business activity. Dubai's Department of Economic Development (DED) regulates businesses and categorizes them into various sectors, such as commercial, industrial, or professional. The type of activity will influence the license you require, so make sure to clearly define your business scope from the outset.
2. Choose a Business Name
After defining your business activity, you’ll need to choose a name for your company. The business name must comply with UAE regulations and should not include offensive language, religious references, or any names that suggest a connection with the government. The DED must approve your company name before you can proceed with registration.
3. Select a Local Sponsor (if applicable)
For LLCs, you will need a local sponsor who holds at least 51% of the shares. The local sponsor should be a UAE national. There are, however, some specific business activities that allow expatriates to own 100% of the shares. This is particularly relevant for certain professional and consulting services.
4. Apply for the Business License
Once you have selected your business activity and finalized your company name, you can submit your application for the required license with the DED. You will need to submit a business plan, copyright copies, and other required documents as part of the application.
5. Register the Office Location
Dubai requires all mainland companies to have a physical office. You will need to rent office space and obtain a tenancy contract that is approved by the DED. The office size and location will depend on the type of business you are setting up.
6. Obtain Approvals and Permits
Depending on the nature of your business, additional approvals may be required from other government entities. For example, businesses in health, education, or food sectors may need approvals from relevant authorities such as the Dubai Municipality or the Dubai Health Authority.
7. Complete the Registration Process
Once all documents and approvals are in place, you can finalize the registration process with the DED. After approval, you will receive your commercial license, and your company can officially start operating.
8. Obtain Visas and Work Permits
After your company is registered, you can apply for employment visas and work permits for yourself and any employees. You can also sponsor family members and dependents for residence visas.
Costs of Setting Up a Dubai Mainland Company
The costs involved in setting up a Dubai mainland company depend on various factors, including the business activity, type of company, office space, and number of visas required. Below is a breakdown of the typical costs:
1. License Fees
The cost of obtaining a business license in Dubai typically ranges from AED 10,000 to AED 50,000, depending on the type of business activity.
2. Local Sponsor Fees
The annual fee for a local sponsor generally ranges from AED 10,000 to AED 25,000. The exact amount will depend on the terms of the sponsorship agreement.
3. Office Space
The cost of office space varies depending on the size and location. A small office can cost anywhere from AED 15,000 to AED 50,000 per year.
4. Visa and Work Permits
Visa fees for employees typically range from AED 5,000 to AED 10,000 per person.
5. Miscellaneous Fees
Additional administrative fees for document attestation, translations, and other regulatory requirements can range from AED 2,000 to AED 5,000.
In total, the setup cost for a Dubai mainland company can range from AED 30,000 to AED 100,000, depending on the complexity and scale of the business.
Challenges of Setting Up a Dubai Mainland Company
While there are many benefits to setting up a mainland company, there are some challenges to consider:
Local Sponsor Requirement: For LLCs, you need a local sponsor, which can sometimes be a difficult aspect of setting up a business in Dubai.
Office Space Requirement: Finding office space, especially in prime locations, can be expensive.
Regulatory Complexity: The process of obtaining approvals and licenses can be complex and time-consuming for certain business activities.
Conclusion
Setting up a Dubai mainland company is a great option for entrepreneurs who want to tap into the vast business potential within the UAE. With access to the local market, the ability to bid on government contracts, and no restrictions on location, mainland companies provide flexibility and growth opportunities that are not available with free zone setups.
By following the right procedures and understanding the costs involved, entrepreneurs can successfully navigate the setup process and establish a thriving business in one of the world’s most dynamic economies.
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