A Mainland Company, also referred to as an "Onshore Company," is a locally licensed business granted by the Department of Economic Development (DED) of the respective emirate. This license empowers the company to operate freely within the UAE's local market and expand beyond the country, without restrictions. One of the standout advantages of mainland companies is the ability to engage with government entities and secure government contracts.
Key Consideration: Before establishing a mainland company in the UAE, it’s crucial to be aware of the new tax law effective from June 1st, 2023. Companies operating in Dubai’s mainland are now subject to a 9% corporate tax on net profits exceeding AED 375,000.
Establishing a mainland company in Dubai offers a host of advantages, including the freedom to trade with other businesses without restrictions and a wide range of location options to choose from. This company formation allows you to engage with government entities, access valuable government contracts, and directly trade with customers across the UAE. Additionally, you have the flexibility to open branch offices, helping you build a strong network of operations throughout the country.
Obtaining a mainland license requires standard approvals from various government authorities, such as the Department of Economic Development (DED), Dubai Municipality (DM), Ministry of Labor (MOL), and the Ministry of Interior's Department for Naturalization and Residency Affairs (MOI).
Traditionally, mainland companies in the UAE required 51% ownership by an Emirati sponsor, with the foreign investor owning only 49%. However, recent regulatory changes now permit 100% foreign ownership for certain business activities registered on the mainland.
Mainland companies face no restrictions on visas. Every company is granted an E-quota (electronic quota) by the Ministry of Labour, indicating its eligibility for staff visas. This quota can be expanded if additional staff are required, with eligibility also influenced by the company’s office space. Larger office spaces may qualify for more visas. Additionally, as the company owner or employee, you can sponsor family members.
For specific business activities, external government approvals may be required. For instance:
Education-related licenses may need approval from the Knowledge and Human Development Authority (KHDA).
Medical-related licenses require approval from the Dubai Health Authority (DHA).
Food-related licenses must be approved by the Food and Drug Department of the Municipality.
Additionally, depending on the nature of your business, approvals from other authorities such as the Civil Defense Authority or the Real Estate Regulatory Authority might also be necessary.
Dubai offers an efficient and streamlined process for foreign companies looking to establish a presence in the region. Let’s take a look at the key steps involved in setting up a Mainland business in Dubai:
The first crucial step is selecting the business activity for your company. The Department of Economic Development (DED) offers a wide range of over 2,000 approved business activities. This selection will determine your trade license type and the legal regulations you must follow.
When setting up a mainland company, there are no restrictions on the location of your business. The choice of location depends on various factors, such as your budget, target market, and type of business activity. Whether it’s a prime commercial area or a more affordable location, make sure it aligns with your business needs.
The next step is to decide the legal structure of your company. The most common structure for mainland businesses is a Limited Liability Company (LLC), which requires at least two shareholders. Other options include Sole Proprietorship, Civil Company, Private Limited Company (PLC), Public Joint Stock Company (PJSC), and Branch Offices. Each structure comes with its own legal requirements and benefits.
Choose a unique name for your company that reflects its activities and complies with UAE regulations. The name should not be offensive or violate social or religious norms. Additionally, you can opt to use your personal name for your company. Once selected, the name must be approved by the DED.
Once your company name is registered, you can apply for a mainland trade license. While most activities are permitted, some are restricted by the DED, which is responsible for approval, regulation, and classification of business activities. Several documents will be required, and assistance from a professional service like WeSetupBusiness can help ensure a smooth process.
A physical office space is mandatory for mainland business licenses. The minimum requirement is 200 square feet, which must be leased on an annual basis. The DED will only issue the license after confirming a valid tenancy contract, which should be certified by EJARI, the official system for rental contracts in the UAE.
After receiving your trade license, the next step is to open a corporate bank account. This is essential for separating your personal and business finances. The UAE has a wide range of local, international, and digital banks, offering tailored services for entrepreneurs, startups, and foreign companies.
Establishing a mainland company in Dubai offers numerous advantages that contribute to business growth and flexibility. Here are the key benefits:
Mainland companies are eligible to bid on and work with the UAE government on various projects, opening up additional avenues for growth and partnership opportunities.
Mainland companies enjoy the freedom to operate and trade across all seven emirates without restrictions, providing a broader market reach.
Unlike free zone companies, mainland businesses are not restricted in the number of visas they can apply for, allowing greater flexibility in staffing.
Mainland businesses benefit from substantial tax advantages, including up to 91% exemption from corporate taxes and 100% exemption from personal taxes, making it an attractive option for entrepreneurs.
Mainland companies can establish their office anywhere within the registered emirate and set up multiple branches, helping to build a strong, diversified presence in the local market.
You can repatriate 100% of your profits and capital, ensuring that your financial investments and returns can flow freely back to your home country without restrictions.
Operating on the mainland gives you full access to both local and international markets, offering greater opportunities for global trade and expansion.
Mainland companies allow 100% ownership for foreign investors in certain sectors, unlike free zones that often require a local sponsor.
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