Mainland Company Formation in Dubai

Why Choose Dubai for Mainland Company Formation?

Dubai, the commercial hub of the UAE, offers unparalleled opportunities for businesses looking to establish themselves in the region. Mainland company formation in Dubai allows businesses to operate within the local market as well as internationally, without many of the restrictions imposed on free zone entities. Mainland companies can engage in a wide range of business activities and have access to government contracts, public tenders, and the ability to trade freely across the UAE.

If you’re considering setting up a mainland company in Dubai, this guide will walk you through the process, advantages, and requirements to make the process smooth and hassle-free.

1. What is a Mainland Company in Dubai?

A mainland company refers to a business entity registered under the Dubai Department of Economic Development (DED). Unlike free zone companies, mainland companies can conduct business without limitations both inside the UAE and internationally. They are not restricted to specific geographical zones and have the flexibility to operate in various business sectors, making them the most versatile option for many entrepreneurs.

Key Benefits of Mainland Companies in Dubai:

• Unlimited Market Access: Unlike free zone companies, which are limited to specific regions or sectors, mainland companies can trade freely in the local UAE market.
• Government Contracts: Mainland companies can bid for lucrative government tenders, which are typically not accessible to free zone businesses.
• Multiple Business Activities: You can engage in a variety of business activities, ranging from trade and retail to professional services and industry.
• Office Location Flexibility: You are not restricted to operating in a free zone; instead, you can rent office space anywhere in Dubai or across the UAE.
• No Currency Restrictions: Mainland companies can freely transfer capital and profits, ensuring financial flexibility.

2. Mainland Company Ownership Structure

Previously, mainland companies required a local sponsor who would own 51% of the business, while the foreign investor held 49%. However, recent changes in the UAE’s Commercial Companies Law allow for 100% foreign ownership in many business activities, depending on the nature of the business. This has made mainland company formation in Dubai even more attractive for foreign investors.

There are two main ownership models:

1. 100% Foreign Ownership (for specific business sectors): In many industries, foreign investors are now allowed to fully own their mainland company.
2. Local Sponsorship (for certain activities): In sectors such as oil & gas, real estate, or transportation, a local Emirati sponsor holding 51% ownership may still be required. A local service agent can also be appointed, who will assist with administrative tasks without having any equity in the company.

3. Types of Mainland Business Licenses in Dubai

The Dubai Department of Economic Development (DED) is responsible for issuing business licenses in the mainland. The type of license you require depends on the nature of your business activities. There are three primary types of licenses:

1. Commercial License: For businesses engaged in trading activities (e.g., buying and selling goods, imports/exports).
2. Professional License: For businesses providing professional services such as consulting, marketing, education, or legal advisory. This license allows 100% ownership in many cases.
3. Industrial License: For businesses engaged in manufacturing, processing, or industrial activities. This license is essential for companies operating factories or production facilities.

Once you identify the right license for your business, you can proceed with the necessary paperwork.

4. The Mainland Company Formation Process in Dubai

Here is a step-by-step breakdown of the company formation process:

Step 1: Choose the Right Business Activity

Your first step is to decide on the business activity you want to pursue. Dubai’s mainland allows a wide range of business activities, but it’s crucial to select the one that aligns with your company’s goals. You can choose multiple business activities under one license.

Step 2: Decide on the Legal Structure

Dubai mainland offers several legal entity types:

• Sole Proprietorship: For individuals who wish to run the business independently.
• Limited Liability Company (LLC): The most common structure, ideal for businesses with multiple shareholders.
• Civil Company: For professional partnerships like doctors, engineers, or lawyers.
• Branch of Foreign Company: For established companies looking to expand into Dubai.

The legal structure you choose will depend on the business activities and the level of control you wish to retain.

Step 3: Reserve a Trade Name

Once you decide on the business activity and legal structure, you need to choose a unique trade name for your company. The trade name must comply with the DED’s guidelines, meaning it cannot violate public morals, religion, or any government entity’s name. It also needs to be relevant to your business activity.

Step 4: Apply for Initial Approval

An initial approval certificate must be obtained from the DED. This shows that the government has no objection to your business setup. During this step, you’ll submit your business activity, ownership structure, and details of shareholders or local sponsor.

Step 5: Draft the Memorandum of Association (MOA)

The MOA outlines the ownership structure, responsibilities, and operational guidelines for your business. If a local sponsor is involved, the MOA will include details of the sponsorship arrangement. A local service agent agreement may be required for professional licenses.

Step 6: Lease Office Space

To complete your registration, you need to have a physical office location. Mainland companies in Dubai are required to rent office space. The lease contract, along with an Ejari (rental agreement), must be submitted as part of the company formation process.

Step 7: Obtain Government Approvals

Depending on your business activity, you may need additional approvals from government departments or regulatory bodies, such as the Dubai Municipality, the Ministry of Health, or the National Media Council.

Step 8: Final Submission and License Issuance

After completing the above steps, you can submit all documents to the DED for final approval. Once approved, your business license will be issued, allowing you to officially start operating in Dubai mainland.

5. Documents Required for Mainland Company Formation

To form a mainland company, you’ll need to submit the following documents:

• Copy of shareholder(s) passport
• Proof of residential address (for foreign shareholders)
• No Objection Certificate (NOC) from current UAE employer (if applicable)
• Trade name reservation certificate
• Initial approval from the DED
• Draft of the Memorandum of Association (MOA)
• Lease agreement and Ejari (office rental contract)
• Additional approvals (if required for specific business activities)

6. Mainland Company Formation Costs in Dubai

The cost of setting up a mainland company in Dubai depends on various factors, such as the type of business activity, the size of the office space, and any additional government approvals required. Typical expenses include:

• Business license fees
• Trade name registration
• Office rental costs
• Visa fees for owners and employees
• Local sponsor or service agent fees (if applicable)

It’s essential to budget for both initial setup costs and ongoing operational costs, such as office rental and visa renewals.

7. Working with AYN Business Consultants

At AYN Business Consultants, we specialize in guiding businesses through the mainland company formation process in Dubai. From initial consultations to final approvals, we offer comprehensive support tailored to your business needs. Our services include:

• Business setup consultations
• Local sponsorship arrangements
• PRO services for document submissions
• Visa processing for investors and employees
• Office space solutions

We aim to make the company formation process as smooth and efficient as possible, ensuring that your business can start operations quickly and without complications.