Dubai: How to start a business on the mainland

DNTV Special

The UAE creates an ecosystem for entrepreneurs and startups with its strategic policies, infrastructure, and business-friendly economic incentives.

A mainland company is a company registered with the Department of Economy and Tourism (DET) pertaining to the concerned emirate of the UAE. This structure offers several benefits, such as a broad scope of trade, location flexibility, and 100% ownership.

Why choose the mainland company setup?

With over 3000+ activities, you can choose a business venture approved for full expatriate ownership with a Limited Liability Company structure (LLC). Compared to free zones, the mainland offers more options for business activities. However, strategic sectors like oil and gas still require an Emirati partner.

Mainland companies have no restrictions on trade with other businesses and can open a branch in any location in the UAE. Such a company can offer services to the government and other businesses across the UAE, targeting customers across the country.

What are the different licence types under the Mainland?

There are various types of business trade licences available.

1. Commercial Licence

A commercial business license is required for any business involved in the trading and supply of goods, merchandise, and other commodities.

Business Activities under a Commercial Licence

• Mobile Phones & Accessories Trading
• Used Furniture Trading
• Trading in building materials, automobiles & spare parts
• Oil & gas trading
• Gold & precious metals trading
• Trading in chemicals and gas trading
• Computer Software Trading
• Certain specific service oriented activities like rental of car or yachts.

 Professional Licence

A professional licence is for businesses that intend to provide an expert service to their customers.

Business Activities under a Professional Licence

• Tax, Auditing & Accounting consultancy
• IT & Computer consultancy
• Advertising consultancy
• Marketing Services

3. LLC and Sole Proprietorship

In the UAE, you can choose to set up your business in two business structures legally:

LLC (Limited Liability Company)

LLC Company enables the shareholders to limit liabilities to their share in the capital, allowing entrepreneurs to scale up the business.  It is mainly utilised for trading and professional businesses. With the amendments in the law, most business can set up a limited liability company without the need of a UAE national as a partner. LLC business set up offers more flexibility and space for expansion across the UAE with importing and exporting products freely.

Sole Proprietorship

A sole proprietorship, commonly known as a Civil company allows a single individual to establish a company but often requires a UAE national as a sponsor or generally referred as a Local Service Agent. Unlike LLC company, a sole proprietor company has unlimited liability and does not require any Memorandum of Association(MOA) or Articles for registration.

Under Civil company formation, most business activities under professional business activities does not require a local sponsor. But real estate business still requires a local sponsor.

You can start a sole proprietorship business to offer consultancy, trading and any other professional services.

How to Set Up a Main Land Company?

 Given the benefits of a mainland business setup in Dubai, many would naturally want to opt for a mainland company in Dubai as their preferred corporate structure. The steps to going about such a mainland business setup would be as follows:

Choose the Business Activity

The foremost aspect to focus on would be to decide which business activity. Mainland companies can trade in any business activity listed on the DET.

Identify legal structure

You can choose any legal form depending on your business requirements. The legal structure that you choose must match your business activity.

Choose a trade name for your company

There are several restrictions to be followed while setting up a company in the UAE. Your business name should not contain any offensive/profane language, religious references, or inferences.

Initial Approval

After the initial approval from the government, you must create MoA as per the legal business structure.

Location 

Businesses on the UAE mainland have no restrictions on where they can set up their activities.Mainland businesses can rent space or warehouse in the most attractive and commercially driven location in the Emirate. If the company relies primarily on international trade, you can set it up in one of the UAE’s busy ports, such as Jebel Ali or Mina Zayed.

As mainland business activities are not location-constrained, you can build a presence in any region. The most preferred locations to start a mainland company in Dubai: Sheikh Zayed Road, Business Bay, Deira, Al Qusais, Al Quoz, Jumeirah

Role of local sponsor or Local Service Agent 

Companies that operate in any relevant strategic sector require an Emirati partner. Such a partner can either be a UAE national or a UAE company. As per the new amendments in UAE law, only certain business activities require a local partnership. To register these mainland companies, the local partner must be the 51% capital shareholder of the business. Expats often make agreements with local partners to agree upon a profit-sharing ratio between the capital invested by both parties.

The local partner does not take part in any administration or management of the business, whereas the expatriate shareholder controls the day-to-day operations and finances of the company.

Apply for a Mainland Trade Licence

After the above steps, you can apply for a trade license with the Department of Economic Development. Documents required would include a license application, ownership percentage, shareholder visas, memorandum of sponsorship, etc.

Get Office Space/ Choose Business Centres

Mainland business setups would have two options: choose any business center with a fully serviced office, owned by a third party with everything from office furniture, reception, pantry to meeting rooms or you can opt for a ‘shell and core’ setup, where you would have to take care of office fittings, ancillary services, and so forth.

Apply for Visas

While there are no limits to the number of visas for mainland companies, the visa quota issued for each company depends on the size of the office space from the Ministry of Human Resources and Emiratisation (MOHRE).

How can Ascent Partners help? 

Ascent Partners provides bespoke business setup and advisory services for entrepreneurs looking to set up their next venture in Dubai.

With services ranging from business consultation and bank account opening to choosing the right business activity and applying for a business licence, our experts help provide essential guidance to help you strategise, startup, and scale in Dubai.