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Home – Mainland Business Setup in UAE
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The UAE offers a strategic location, favourable business environment, tax advantages, and world-class infrastructure, making it an attractive destination for starting a business. This comprehensive guide assists in forming a mainland company, discussing its entailments, benefits, and steps.
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In the UAE, there are two main types of company formations: mainland and free zone. A mainland company is registered with the government and can operate anywhere within the country, while a free zone company is restricted to the free zone.
Unlimited Market Access: Mainland companies are not restricted to any geographical location and can conduct business anywhere in the UAE.
No Restrictions on Activity: Mainland companies can engage in almost any kind of business activity, from trading and manufacturing to consultancy and services.
Flexibility in Location: Unlike free zone companies that are bound to operate within their designated free zone, mainland companies can set up offices anywhere in the UAE.
Foreign Ownership: In recent years, the UAE government has relaxed foreign ownership laws. Depending on the type of business, a foreign investor can now own 100% of the mainland company, especially in previously restricted sectors.
Visa Benefits: Mainland companies can sponsor employees and apply for UAE residence visas, making it easier for business owners and their employees to live and work in the UAE.
Ability to Bid for Government Contracts: Mainland businesses have access to government projects and contracts, which can be a lucrative avenue for growth.
Strategic Location: The UAE serves as a gateway between East and West, offering easy access to regional markets across the Middle East, Asia, and Africa. Its major cities, Dubai and Abu Dhabi are bustling commercial hubs.
Tax Advantages: The UAE offers a highly favourable tax regime. With the introduction of a 9% corporate tax (as of 2023), the UAE remains one of the most tax-friendly locations for businesses. Additionally, there are no personal income taxes, capital gains taxes, or withholding taxes in the country.
Ease of Doing Business: The UAE is consistently ranked as one of the easiest places to do business globally, thanks to its simplified registration procedures, supportive legal framework, and modern infrastructure.
Access to Talent: Setting up a mainland company enables you to recruit top-tier talent from the UAE and abroad, allowing you to build a skilled workforce.
Reputation and Credibility: A mainland company holds a certain level of prestige, as it is registered directly with the UAE government can enhance your company's credibility when dealing with local businesses and governmental entities.
Mehar Business Solution offers a professional service for forming a mainland company in the UAE, offering tax advantages for entrepreneurs and businesses. Professional services simplify this process, ensuring legal compliance and smooth market entry. Whether a foreign investor or local entrepreneur, this service provides flexibility and opportunities for success in the UAE market.
While the process for mainland company formation is relatively straightforward, it requires attention to detail and adherence to UAE's legal and regulatory requirements. Here are the typical steps involved:
The first step is to determine the type of business activity you wish to pursue. The UAE government categorizes business activities under various licenses, including trading, professional, and industrial. Understanding the appropriate category is critical as it will influence the documents required and the legal structure of the business.
The next step is to select a business name for your company. The name should align with the business activity and must adhere to UAE naming conventions. Certain words and terms (such as those related to religion or politics) are prohibited.
In the UAE mainland, businesses can operate under various legal structures, including:
For many business types, especially in certain sectors, a UAE national sponsor or partner may be required. In an LLC, the local sponsor generally holds 51% of the company's shares, but the foreign investor retains full control over operations and profits through a contractual agreement. However, recent reforms now allow 100% foreign ownership in many sectors, making the need for a local sponsor optional for certain business activities.
The company must be registered with the Department of Economic Development (DED) in the respective Emirate. This is the government entity that issues licenses and ensures compliance with the local laws and regulations. You'll need to submit various documents, including the business plan, passport copies of shareholders, and tenancy contract for the business premises.
A mainland company is required to have a physical office in the UAE. You will need to secure a commercial lease in the emirate where your business is registered. This office will serve as the official business address.
Once your business activity and legal structure are confirmed, the DED will issue a trade license. Additional approvals may be required for certain industries, including healthcare, education, and media. Once you receive all necessary approvals, your business will be officially registered.
You can apply for employee visas, investor visas, and family visas once your company is established. The number of visas you can sponsor depends on the size of your office and the nature of your business.
Mehar Business Solution LLC provides UAE businesses with VAT registration, accounting, auditing, management consultancy, advisory services, and document clearing, ensuring compliance with regulations and promoting sustainable growth.
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