A Mainland Company, also known as "Onshore Company" is a local business licensed by the Department of Economic Development (DED) of the respective emirate. This license grants the company the freedom to operate within the local market and also conduct business outside the UAE without any restrictions. A big plus for mainland companies is that you can do business with government entities and can get government contracts.

One of the most important things to remember before starting a mainland company in the UAE is the newly introduced tax applicable from 1st June 2023. Now, companies located in the Dubai mainland are subjected to 9% corporate tax on the net profit above the threshold amount of AED 375,000.

Operational Flexibility and No Restrictions

Company formation in Dubai mainland comes with many benefits such as freedom to trade freely with other businesses without any restrictions and having unlimited location options to choose from. This type of company formation in UAE allows you to do business with government entities and get access to valuable government contracts as well as trade directly with customers anywhere in the UAE. Additionally, you can also open branch offices that establish a strong network of business throughout the UAE.

Ownership: Until recently, you were only allowed to own a maximum of 49%, while the remaining 51% had to go to the Emirati sponsor for mainland company formation in UAE. However, the UAE government now allows 100% foreign ownership for few business activities registered on the mainland.

Visa: There is no limitation on visas on the mainland license, every mainland company is issued an E-quota (electronic quota) by the Ministry of Labour. This quota indicates the company's eligibility for visas and can be expanded if the company needs more staff. Visa eligibility also depends on the amount of office space the company has. The more office space you have, the higher number of visas you may get. You can also sponsor your family as an owner or employee of a mainland company.

Approval from Government Authorities: A mainland license does require standard government approvals per license. For example, DED (Department of Economic Development), DM (Dubai Municipality), Ministry of Labour (MOL), Department for Naturalization and Residence affairs of Ministry of Interiors or Immigration (MOI).

For certain business activities, you may need approval from external government authorities. For example, education licenses may require approval from KHDA (Knowledge and Human Development Authority), medical licenses may need approval from DHA (Dubai Health Authority), and food-related licenses may require approval from the Food and Drug Department of Municipality. Depending on your business, you may also need approval from authorities such as the Civil Defence Authority or the Real Estate Regulation Authority.

A quick process for setting up a foreign company in Dubai

Now let’s explore the process of Mainland business setup in Dubai:

Choosing Business Activities

The first step in starting a business in the UAE is to choose the industry in which you will trade. The Department of Economic Development (DED) allows around 2000 business activities you can choose from.

Choose Business Location

The next part is choosing the business location of your company. UAE mainland company has no restrictions on choosing where you want to establish your company. Choosing the location depends on factors such your budget and the type of business activities.

Determine Legal Structure

Now it is time to determine the legal structure of your company. Limited Liability Company (LLC) is the most common type of business structure of mainland companies. LLC is an independent legal entity with two or more shareholders. Other types of legal structures include sole proprietorship civil company, private limited company (PLC), public joint stock company (PJSC), and branch office, etc.

Register Company Name

Select the company name that best suits your business and its activities. It should be unique and should not be used by others to get approved. Also, it is forbidden to use any offensive names related to society or religion reference. However, you can choose your personal name for your company.

Apply for Trade License

After registering your company name, you can apply for your mainland trade license. There are few activities that are not allowed by DED and this government body is responsible for approval, regulate, classify, and permit the business activities. Several documents are required to apply for mainland trade license and WeSetupBusiness will assist you with this.

Get Office Space/Coworking Space

For every Dubai mainland license, there is a minimum requirement of 200 SQFT to be leased out on an annual basis. Only then the Department of Economic Development (DED) will issue the license. The EJARI certificate issued from the land department makes the annual tenancy contract legal and presentable in DED for the issuance of the license.

Open corporate bank account

After obtaining the mainland trade license, opening a corporate bank account is another integral and legal requirement. You have to keep your personal and business funds separate. Thanks to the broad network of local, international and digital banks in the UAE, you have plenty of options, with each bank offering distinct advantages to entrepreneurs, start-ups and large foreign companies.

Benefits of a mainland company:

·       Freedom to run business throughout the UAE without restrictions

·       Up to 91% exemption from corporate and 100% on personal taxes

·       Allowed 100% repatriation of profits and capital

·       Potential bid and work on UAE government contracts

·       No limitations on the number of visas.

·       Able to set up office locations anywhere in the registered emirate and establish multiple business branches building a strong presence in the local market.

·       Unrestricted access to the global markets