Mainland Business Setup in Dubai

Dubai Mainland is the onshore area of Dubai where businesses operate under the regulations of the Department of Economic Development (DED). Setting up a business on Dubai Mainland offers several advantages, but it also requires compliance with specific legal structures and regulations. Here’s an in-depth look at the key aspects of a mainland business setup

Mainland vs. Free Zone: Decoding the Business Setup Dilemma

Choosing between the Mainland and Free Zone for your business setup in Dubai involves critical considerations that impact your operations, ownership, and growth potential. On the Mainland, local partnerships are not necessary anymore; local acts as an agent, offering operational flexibility across the UAE and versatility in business activities. However, customs duties and potential taxes apply. In Free Zones, 100% foreign ownership is possible, providing flexibility but with restrictions on UAE market operations. Exemptions from customs duties and corporate taxes for a defined period make Free Zones appealing, yet they often cater to specific industries. Business activities, local market dominance, and comfort with local partnerships all play a role in the decision. Seeking advice from business setup experts ensures an informed choice aligned with long-term goals, making this decision a crucial aspect of the business setup dilemma in Dubai.

Legal Structures:

Limited Liability Company (LLC)

A popular choice, especially for small to medium-sized businesses. Requires a local partner (UAE national) who holds a minimum of 51% ownership, with the foreign investor holding the remaining 49%.

Professional License

Suitable for individuals providing professional services like consulting, legal, accounting, etc. Requires a local service agent, but full ownership is retained by the foreign investor.

Branch of a Foreign Company

Allows foreign companies to establish a branch on the Dubai mainland. The parent company retains full ownership, but a UAE national is required as a service agent.

Representative Office

Ideal for market research and promoting the business of the parent company. It does not engage in commercial activities and requires a local service agent.

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Key Steps in Mainland Business Setup:

1

Choose a Business Activity

Clearly define the nature of your business activities, as different activities may have specific requirements.
2

Select a Local Partner or Service Agent

For an LLC or branch setup, a local partner or service agent is required. This individual or entity facilitates the legal requirements and represents the business in dealings with authorities.
3

Draft Memorandum of Association (MOA)

The MOA outlines the shareholding structure, business activities, and other essential details. It is a crucial document for LLC setups.
4

Choose a Business Name

Select a unique business name that adheres to the guidelines set by the DED.
5

Apply for Initial Approval

Submit an application to the DED for initial approval, providing details about your business activities and other relevant information.
6

Tenancy Contract and Office Space

Finalize a tenancy contract for your office space, ensuring it complies with zoning regulations.
7

Submit Documents to the DED

Prepare and submit all necessary documents, including passport copies, visa copies, MOA, tenancy contract, and others.
8

Obtain Approvals from Relevant Authorities

Depending on your business activities, you may need approvals from specific government departments.
9

Payment of Fees

Pay the required fees for trade licensing and other associated costs.
10

Receive Trade License

Once all approvals are obtained, the DED issues the trade license, allowing you to conduct business legally in Dubai Mainland.

Submission Procedures for Mainland Business License:

Required Documents:

Begin by ensuring you have all the necessary documents ready. This typically includes:

  • Passport copies of shareholders and partners.
  • Visa copies.
  • No Objection Certificate (NOC) from the current sponsor (if applicable).
  • Memorandum of Association (MOA) outlining business activities.
  • Tenancy contract for the business premises.
  • Initial approval from the Department of Economic Development (DED).
  • Additional documents depending on the nature of the business.

Key Considerations:

  • Nature of Business: Define the core activities your business will engage in.
  • DED Classification: Explore DED’s business activity classification system to match your operations accurately.
  • Future Expansion: Consider potential future activities to ensure flexibility and adaptability.

Benefits of Properly Identifying Business Activities

  • Legal Compliance: Accurate identification ensures alignment with legal requirements, preventing potential issues.
  • Efficient Licensing: Choosing the right business activities streamlines the licensing process, saving time and resources.
  • Scope for Growth: Future-proof your business by selecting activities that allow for expansion and diversification.

Expert Guidance

Consult with Avenue Classic’s legal and business setup professionals to make an informed decision based on your business objectives, ensuring compliance with regulations.

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