business formation Business Formation Dubai Mainland
Mainland Business setup in Dubai
Exploring the Different Business Structures
There are three ways in which a company can be registered in the UAE: on the mainland, in a freezone, or offshore.
Each business structure has its own benefits and drawbacks, and it can be confusing to know which is the right option for your business. Let's explore each option in more detail:
A mainland company is registered and operates under UAE law, and can conduct business activities outside of its jurisdiction.
What Is a Mainland Business?
Here's what you should know: while they're subject to the same UAE laws, mainland companies can freely operate their business activities anywhere in the country, rather than a certain free zone district.
Additionally, it's important to note that when registering a mainland company, there have been reforms and a new regulation has now allowed 100% ownership without the help of a UAE national.
Overall, mainland companies are not limited to free zone districts like free zones and offshore entities are—opening up more opportunities for those looking to start a business in the UAE.
- A mainland business is a new class of business entity created in the UAE for the sole purpose of doing business in the country. It has been designed to offer all the benefits of being a local business without having to comply with some of the restrictions that are imposed upon other types of businesses operating in the country.
- The main benefit of having a mainland business is that it allows you to carry on your activities without having to become a resident or even spend any time in the country. This means that you can take advantage of all the opportunities that are available to you as a resident, but without having to spend any time or money on getting set up and making your business profitable.
- A mainland business can also be very beneficial because it allows you to use your own bank accounts and financial institutions. This means that you will be able to make all payments from within the UAE, which will save on costs and help increase profits for your company over time.
- Another benefit of having a mainland business is that it allows you access to many more sources of funding than just one type such as bank loans and credit cards which would normally be available only for residents who have established residency status within the country.
Advantages of setting up a Mainland Business in Dubai
When it comes to mainland businesses in the UAE, they offer attractive advantages for those looking for an easy way to register their business in the country without having to go through too much hassle or bureaucracy. However, setting up a mainland business usually requires more paperwork than other structures, so be sure that this is what you're looking for before jumping into it! Here are some advantages of starting a business in mainland Dubai:
Businesses with 20-50 employees can take advantage of the UAE's corporate tax rate of zero percent on profits earned from January 1, 2017 onward. The UAE government offers generous incentives to investors that start businesses here, including the following:
- First-year business license fees are waived for companies that employ fewer than 20 people;
- Foreign workers are exempt from paying income tax for three years after they leave the country; and
- Companies can claim refunds for up to 40% of their federal income taxes paid as part of their license fee each year (up to four years).
We encourage prospective entrepreneurs that plan on setting up their business in this country to do their research about the country's policies regarding taxation, HR and safety regulations.
Your checklist for mainland business setup in Dubai
It’s time for your business setup checklist. Let’s get your venture off to a successful start!
1. Choose your business activity
Before you set up a company in the UAE mainland, you have to make sure of the nature of business in which you will function along with its category. There are thousands of permitted business activities as listed by the Department of Economic Development (DED).These include trading, agriculture, hospitality and manufacturing.
2. Find the ideal location for your business in the UAE
There are several considerations that you will have to take into account before deciding where your business should operate. The right location will depend on many factors such as budgeting and your chosen business activity. Should your company rely on imports and exports, then setting up near one of the UAE’s busy ports is a great idea. A main advantage of businesses operating on the mainland of Dubai is the ease of opening branch offices. This means that businesses are not limited to one location and can build a large local presence over time.
3. Determine your business legal structure
You may want to set up your own business in UAE. In that case, you should know the most common type of business here is a limited liability company. But, setting up a professional service company does not require a UAE sponsor and can be 100% foreign-owned. Local laws allow foreign businesses to register an LLC on the UAE mainland, but for other trades, different types of companies must be set up.
4. Obtain a local sponsor or local service agent
Earlier for setting up their business in mainland Dubai, foreign entrepreneurs were required to partner with a local sponsor or local service agent, who was UAE national or a UAE-based company. However, as per the latest regulation, adding a local partner to your business is now completely your choice. But certain business activities are restricted from this new regulation and still require a local sponsor for setting up their operations in UAE.
5. Name your company
Naming your company in a place like the UAE is not as easy as it might be elsewhere. You can't use offensive language, religious references, or inferences to other organizations. You must use the full name of your business -- no abbreviations are allowed. If you're doing business in more than one language, you'll have to use all the names -- translated or not -- on your business cards and letterhead. This article discusses choosing a company trade name for your UAE business, with helpful tips and recommendations about appropriate wording in Arabic, Farsi and English.
6. Apply for a mainland trade license
The next step is to apply for a mainland trade license with the Department of Economic Development. Many documents are required as part of a trade license application. These include a license application; memorandum of sponsor arrangements; and ownership percentages visas, just to name a few.
7. Secure your office space
When you have a trading license, it's time to secure a place to set up your business. For small businesses, serviced offices may be the best option. Your lease payment would usually cover rent, use of office equipment and utility bills. For large businesses, offices in shell-and-core condition with poorer decoration are also an option. There are many options in the middle ground as well, with offices pre-fitted for your business and provided with necessary equipment for your money.
8. Apply for relevant visas
There are no visa requirements for small businesses in the UAE mainland. Apply for up to 100 (or maximum) business visas to open a branch in the UAE or access local job market, clients and industry.company. As the owner of a UAE mainland company, you will also be able to sponsor dependents – such as family members and domestic staff (maids or drivers, for example) for their visas as well. Foreign entrepreneurs who establish business on the UAE mainland are also entitled to an investment visa which gives them and their families the right to live and work in the UAE for up to three years.
Should You Launch Your Business in a Freezone or on Mainland?
When it comes to deciding where you should launch your business, there are three main choices: Mainland, Free Zone, or an Offshore entity. It all depends on which works best for you and your goals.
If you're looking for an option that gives you the most control over your business, then a Mainland company is the way to go. This type of business allows up to 100% ownership to the expat (or other foreign investor).
No matter which route you choose in setting up your business, make sure you understand all of the rules and regulations involved so you can make an informed decision!
Why Choose Bisdesk?
Bisdesk has been helping clients with mainland company formation in Dubai for the past several years. With their years of experience working with individuals and companies of all sizes, our team of experts will assist you throughout the entire business setup process. At Bisdesk, we do not believe in contracts or require our clients to use our services forcefully; instead, we believe in giving our clients the best experience throughout the process and moving forward with them as advisors in all legal matters. Bisdesk also offers sincere consultation and leads you with the necessary information at every step of the process.
Contact Bisdesk today for setting up a mainland business in Dubai!