Mainland companies, licensed by the Department of Economic Development (DED), get to enjoy several benefits in the UAE. While UAE free zones offer foreign entrepreneurs the convenience of pre-packed business inclusions, it doesn’t come without limitations. Free zone companies are usually an ideal starting point for businesses but switching to a mainland company would be the best choice when it’s time to expand.
Having a mainland company is necessary for business prosperity in the long run, and with the right company formation specialist or UAE sponsor, you can make this transition possible for you. For your convenience, we’ve prepared a step-by-step checklist of everything you have to do in order to set up your mainland company in Dubai.
1 – Choosing a Business Activity
Before you can proceed with setting up your mainland business, you need to figure out the industry you wish to specialise. The Department of Economic Development (DED) enlists thousands of legal business activities that fall under manufacturing, hospitality, agriculture, trading, and so on.
2 – Finding the Ideal Location
Once you’ve made up your mind and chosen the right business activity, the next step would involve deciding on the location from where you wish to operate. Mainland companies don’t have restrictions on the locations to set up, so you must evaluate every area based on different factors to choose the right one for your business.
For instance, if your business involves exports and imports, it would be a better idea to setup near one of the busy ports, such as Mina Khalid, Mina Zayed, or Jebel Ali.
You’d be happy to know that there aren’t any restrictions on opening additional branches in the mainland area. Thus, you can open more than one branch to scale your business over time.
3 – Determining the Business Legal Structure
Legally, you have the liberty to set up several kinds of businesses in the mainland area. Most foreign entrepreneurs prefer opening a Limited Liability Company (LLC). LLCs are independent legal entities that can be owned by multiple shareholders.
If your business will be trading under an industrial or commercial license (which includes manufacturing and industrial activities), you have to form an LLC to set up your mainland company. For this purpose, you’ll need a local sponsor. In contrast, you won’t require a sponsor if you open a professional service company.
4 – Obtaining a Local Service Agent or Local Sponsor
Foreign entrepreneurs can set up their businesses in mainland Dubai by partnering with a local service agent or sponsor. LLC companies would need a local sponsor, who could be a UAE-based company or a UAE national. Regardless of who sponsors your business, they will be the 51% shareholder of the business.
When it comes to setting up a professional business, a local service agent (LSA) will be required. The LSA will represent your business while dealing with the government, but it won’t own the shares of your business.
5 – Naming the Company
When you’re sorted with the fourth step, you move on to determine the name of your company. Your company name is very important because it does the job of conveying your brand’s professional values. As an entrepreneur, it’s one of the biggest decisions you’ll have to make.
When setting up a business in the mainland, you must take several things into consideration before choosing a business name. Religious references, offensive language, or inferences about other organisations won’t be tolerated. You can include your full personal name in the company trade name. You should check all the guidelines for naming your company before you proceed with this step.
6 – Applying for Mainland Trade License
When you’ve figured out an appropriate name for your company, your job is to send an application to the Department of Economic Development for your mainland trade license. You have to submit several documents to have your trade license approved. It would typically include your application form, details of your sponsor arrangements, percentage of ownership of every partner, shareholder visas, and so on.
7 – Securing an Office Space
When you get your trade license, you can start looking for your office space. In Dubai mainland, serviced office spaces are maintained and owned by third-party individuals, so you’ll have almost everything that you may require to move in immediately. Some of the items included would be internet and phone access, desks, and reception services. You will be required to pay a lease, which will normally cover the rent, utility bills, and use of office equipment.
If you don’t want a serviced office space, you can try the ‘shell and core’ type of office. When renting such office space, you’re required to handle the fit-out and decoration along with the rental costs.
If you’re not comfortable with either of these two types, you can try looking for pre-fitted office spaces, where you have to arrange your own equipment and pay other bills separately.
8 – Applying for Relevant Visas
There isn’t a limit on the number of visa applications for business owners with a mainland company. However, the number of visas must correspond with the office space area. As per the rules, you’re eligible to apply for one visa for every 100 sq. ft. of warehouse or office space.
However, there are exceptions based on the nature of your business. For example, a domestic cleaning company with over 500 remote employees will have a smaller office space as compared to a manufacturing or textile company.
Business owners of a mainland company can sponsor dependents, such as family and domestic staff (drivers or maids) for their visa applications.
Foreign investors with a mainland company can apply for an investment visa that allows them and their family members to live and work in the UAE for around two years.
9 – Partnering with Experts
The process of setting up a mainland company can be quite complex, requiring extensive knowledge and understanding of the company formation and legal processes. Because of this reason, it is crucial for foreign entrepreneurs to seek help from UAE-based experts who can reduce the stress of the process. At TASC, our consultants will collaborate with you to get an understanding of your business goals and use it to help you get started with your business setup in Dubai mainland.
Wrapping Up
If you’re looking forward to a prosperous future for your professional ventures and business activities, setting up a mainland business is the right way to go.
The process can be baffling and time-consuming for a newcomer, but with the right people at your disposal, you can get things done relatively fast to enjoy a wide range of advantages offered by UAE government in the form of 100% ownership, location flexibility, and zero trade restrictions.
FAQs
- Can I set up a company in Dubai Mainland without a sponsor?
If you plan on establishing a limited liability company (LLC), you’ll need a local sponsor who will own 51% of the firm. However, if you provide services or open a consultancy, you’ll need a local service agent (LSA) who will represent your business but won’t necessarily have to be a shareholder.
- What is the cost of Dubai mainland company formation?
The costs can greatly vary depending on a variety of factors. The cost of a Dubai mainland trade license starts from about AED 10,000, as per data in 2022, but it can increase based on visas, extra permits, government fees, and much more.
Connect with us now to learn more and establish your company.
