Business Setup in Dubai Mainland: A Complete Guide

Setting up a business in Dubai mainland opens doors to deploy activities in the United Arab Emirates towards business and individuals, to access an open and safeguarded environment for entrepreneurs, and a prosperous future for business ventures. To understand the nuances of starting a business in Dubai, it's essential to learn the setup process and familiarize yourself with the relevant authorities.

This blog provides a comprehensive guide to establishing a business in Dubai mainland. But before diving into the details, it is important to understand the concept of Dubai mainland and how it differs from Dubai’s free zones.

What is Dubai Mainland?

When you choose to start a business in Dubai, you can either set it up in the free zones, offshore jurisdiction or in Dubai mainland.

Dubai mainland is the area within the city that is outside the free zones and offshore jurisdiction and is regulated by the Department of Economic Development (DED). Businesses in Dubai mainland are registered with the Ministry of Economy under three licenses:

• Professional/services license
• Commercial license
• Industrial license

These licenses are issued by the DED and most companies operate in Dubai mainland as Limited Liability Companies (LLC). Registering as an LLC allows investors and entrepreneurs to benefit from international and local business opportunities with minimum restrictions.

Although Dubai mainland / Dubai’s free zones and Dubai offshore set-up options might seem similar at first glance, they are subject to different regulations and benefits. Let’s delve into these differences.

Difference Between Dubai Mainland, Free Zones and Offshore jurisdiction

Understanding the differences between the 3 set-up options is crucial for making informed decisions about your business setup. Here are the key distinctions:

1. 1. Visa Eligibility
   Businesses operating in Dubai mainland do not have restrictions on the number of visas for their employees, but they must expand their office space if they apply for additional visas. Free zone companies generally have certain restrictions for the number of visas they apply for (usually 6-7 visas). Offshore structures do not support visa issuance capability.
2. 2. Capital Prerequisites
   A business setup in Dubai mainland comes with certain costs depending on the kind of business and service provided. Mainland companies usually have a higher capital prerequisite amount than free zone /offshore companies.
3. 3. Company Audits
   Business setups in mainland Dubai have mandatory financial audits and require approvals from different UAE authorities. Free zone /offshore companies, on the other hand, do not require approvals from regulatory bodies in the UAE. However, they need approval from the free zone / offshore’s regulatory body.

Now that you know the key differences between the 3 different set-up options, let’s understand why establishing a business in Dubai mainland can be advantageous.

Advantages of Starting a Business in Dubai Mainland

There are many advantages to a business setup in Dubai mainland, ranging from government support to minimal trade restrictions. Some of the key benefits your business can enjoy in Dubai mainland are:

• Location Flexibility: Dubai mainland companies can operate from any location within the United Arab Emirates (UAE) and establish multiple branches, allowing them to foster a strong network across the country.
• Zero Trade Restrictions: Dubai mainland companies can have unrestricted trade with other businesses and can either work for the government or trade directly with their consumer base, both locally and globally.
• Broad Working Scope: Businesses in Dubai mainland can also undertake a wide scope of work.
• Accessing Government Contracts: Government tenders in the UAE are very lucrative and businesses operating in Dubai mainland can also avail of those tenders.
• Complete Ownership of Mainland Business Entities: Previously, foreign ownership in the business sector of UAE was limited to free zones or specific professional service companies. However, in 2020, a new decree allowed 100% foreign ownership of mainland companies in Dubai and the UAE, excluding some strategically important industries and professional licences. This change enables overseas investors and entrepreneurs to operate in Dubai without needing local partners.

Having understood the advantages, let's now move on to the steps required to ensure a hassle-free company formation.

Steps for Mainland Company Formation in Dubai

These steps will guide you through the process of forming a company in Dubai mainland, ensuring a smooth and successful business setup in Dubai mainland.

1. Select Your Business Activities

Research the different industries of Dubai and decide which business activity you want to set up in Dubai mainland. The DED permits various business activities and some of the most popular ones are:

• Agriculture
• Commerce
• Tourism
• Occupational setups
• Professional setups

2. Define Your Business Legal Structure

While many business setups in mainland Dubai opt for an LLC structure for industrial/commercial activities, there are different legal forms one can opt for depending on the industry they are in and the services they will provide. Some of the primary legal business structures are:

• General partnership
• Local company branch
• Public joint stock company
• Limited partnership
• Foreign company branch
• Civil company
• GCC company branch

3. Register Your Company Name

Registering the company name is an important step as one’s business will operate under it. The company name will also showcase its brand values and ethos - which should adhere to the UAE regulations on references and language.

The registration should be completed with the DED before proceeding to other aspects of the business setup in mainland Dubai. Nowadays, registering a company name is a seamless process that can be completed with the support of one of our expert.

4. Seek Initial Approval

As mentioned above, a mainland business setup in Dubai might require the investor/entrepreneur to seek approvals from relevant authorities in Dubai; the primary authority being the DED.

5. Find the Ideal Business Location in the UAE

Businesses in Dubai mainland must have a physical office location. Therefore, it is important to consider factors such as business activity, budget, and proximity to ports and commercial areas before securing an office location.

There are office space service providers who facilitate the setup of physical locations in Dubai.. There are different kinds of offices available depending on one’s business, including:

• Office building
• Workshop
• Warehouse
• Leased office
• Fully-owned building

6. Apply for a Mainland Trade License

Applying for a Dubai mainland trade license with the DED is a mandatory step in the process of forming your company. The investor/entrepreneur will have to submit documents such as a license application, shareholder identity documents, ownership percentages amongst the partners, memorandum of sponsor arrangements, and more.

7. Process Relevant Visa Applications

The final step of establishing a business setup in mainland Dubai is applying for relevant visas to kickstart the business.

As mentioned above, there are no limits for foreign entrepreneurs/investors setting up their businesses in mainland Dubai. Ideally, the number of visa applications should correspond with the amount of office space required.

Owners of a Dubai mainland company are allowed to sponsor dependents such as family members, domestic staff, etc.

Form a Company in Dubai with SFM

SFM Corporate Services is a leading global organization providing business solutions, company registration and renewal services, and diversification of business ventures. SFM deploys end-to-end solutions for businesses looking to establish themselves in more than 50 jurisdictions across the world, including Dubai mainland.

Having worked with over 20000 happy clients over the past 18 years, some of the points that make SFM stand out are:

• Convenience: SFM allows you to register your company supported by experts in Company formation.
• Local expertise / Global Reach: SFM allows you to incorporate your new company locally and expand and structure in over 50 top jurisdictions worldwide.
• Range of Services: In addition to registering/incorporating a company, we provide a variety of services and one-stop solutions including:
  • Bank account opening assistance
  • UAE corporate tax filing
  • Accounting
  • Golden visa
• Personalized Support: SFM also provides personalized support in registering your company if you face any challenges.

To understand further how SFM can help with mainland company formation in Dubai, contact us today!