Mainland company formation in Dubai - Shuraa
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Mainland company formation in Dubai

Mainland company formation in Dubai

Mainland company formation in Dubai

Dubai is a land with possibilities. Because of the facilities such as world-class infrastructure, stable connectivity, skilled workers, cosmopolitan workplace, and incentives to invest more, many economists and business professionals have charted this city as the best place to start your business.

Dubai Mainland: A lucrative option

The DED (Dubai Economic Department) has given all private business companies and their members permission to perform commercial business functions on the Dubai Mainland.

There are ideal places for a foreign business owner to work, such as multinational grocery stores, consumer goods, auto manufacturers, and so on. According to UAE business incorporation rules, a foreign owner should only own up to 49 percent of a company if it is based on the mainland, and a UAE citizen must own 51 percent of total shares, except under the following circumstances:

  • Activities with 100% ownership for Service business ( IT services, Technical Services, Marketing Management )
  • Instances where GCC companies enter into a partnership with UAE National
  • Where the law requires 100% local ownership.
  • Businesses located in Free Zones

It’s a wise decision to start your business in Dubai Mainland. When it comes to market setup in Dubai Mainland, the following characteristics entice a potential investor to spend more:

  • Limited restrictions on a minimum capital requirement.
  • No yearly auditing
  • No restrictions on processing legal documents
  • No restrictions on recruitment
  • Zero Taxation- none in the case of corporate or personal tax
  • No limitation in getting employment visas and an easy recruitment process
  • Low import duty
  • Ease of getting affordable space with flexible rent or lease for office anywhere.

Process of Mainland company formation in Dubai

Just like every other UAE incorporation, the procedure is quick and straightforward. Here’s how to register your company on the Dubai Mainland:-

  • Choose the type of company you want to establish in Dubai.
  • Obtain a Local Service Agent who will own 51 percent of the company’s shares.
  • Examine the location’s suitability, accessibility, and price.
  • Obtain the Department of Economic Development Dubai’s initial approval.
  • In Dubai’s mainland, having office space is needed. The issuance of a trade license necessitates the use of a registered office address. As proof of a registered address, information about an ownership agreement or tenancy can be provided.
  • You can apply for a Dubai mainland license if you meet all of the above requirements. The Dubai Economic Department (DED) is the organization in charge of issuing mainland licenses in Dubai, United Arab Emirates.
  • Submit the necessary documentation for company formation to the Commercial Registration Department and the Department of Economic Development, along with the appropriate license fee.

Documents required to Setup Company in Dubai Mainland

The documents required vary in terms of Individual and Corporate Shareholders.

For individual shareholder

  • Expat owners, directors, and managers’ passport copies, as well as the Visa page and entry stamp (when shareholders enter UAE)
  • A No Objection Certificate (NOC) from the employer is required if the shareholder/manager is on an employment visa with any company in the UAE.
  • Copy of the UAE National Partner’s national ID card

For corporate shareholder

  • Legalized copy of the UAE Embassy’s Certificate of Incorporation and Memorandum and Articles of Association
  • If the corporation is a shareholder in the proposed LLC, no objection certificate from the Free Zone/Offshore Authority is required.
  • Original Board Resolution for forming the firm, along with a notarized and legalized Power of Attorney from the UAE Embassy.

Business entities that can be registered as Mainland companies

  • Branch of Foreign office: – Investors searching for a platform to expand their company will find prospects in Dubai. If you’re looking for a place to grow, consider incorporating your branch office in Dubai Mainland.
  • Professional Firms: – They are also known as civil firms and are committed to a single discipline in order to carry out related practice in their field. Professional companies, unlike LLCs, are not bound by the 51 percent shareholding limit.
  • Limited Liability Company: – An LCC, which is one of the most popular types of business companies, may be formed from as little as two owners and as many as 50. The proportion of respondents that each partner must bear is determined by their actual shareholding ratio.
  • Representative office: – Without the participation of a shareholder, the UAE enables international investors to open a representative office. A representative office is less interested in the day-to-day operations of the company and is more focused on marketing analysis and promotion.

Dubai Mainland company formation cost

The cost of starting a company in the mainland is determined by factors such as the type of business, the number of visas required, and the location. There will also be some extra charges, such as government taxes, company registration fees, and so on.

  • DED Initial Approval (Department of Economic Development) 235 AED (One-time cost)
  • AED 735 for trade name approval (One-time cost)
  • The cost of office rent is determined by the size of your office. The average annual office rent will be AED 100 and above per square foot. The cost of renting an office is determined by the location and size of the space needed.
  • Memorandum of Association (MoA) attestation – AED 1500 (one-time fee); to be drawn up and agreed by all business partners.
  • AED 500 for contract drafting and court agreement attestation (one-time cost); either partners or their lawyers must sign the court agreement attestation.
  • Registration with the Ministry of Economy – AED 3,000 (one-time charge); upon payment of this fee, the company will be registered.
  • AED 10,000 (approximately) for a trade license.
  • Market taxes – paid to the government as a share of office rent – 5% for stores.
  • Fees for local sponsorship in the UAE vary depending on the type of the company. Sponsorship ranges from AED 7, 000 to AED 25, 000 on average. Certain occupations, such as contracting and real estate, will be more lucrative.

What is a Mainland license?

A mainland license, also known as an onshore license, allows individuals to do business both within the UAE and abroad without restrictions. In the UAE, the Department of Economic Development (DED) is in charge of issuing these licenses.

A mainland business based in Dubai or the rest of the UAE must have a local partner or service agent, according to UAE company law. Whether you need a local sponsor or a local service agent depends on the sort of company you’re starting in Dubai mainland.

A local sponsor will keep 51 percent of the company’s stock, but as the owner, you will keep ownership of the company for a fixed annual fee. A local service agent, on the other hand, has no shareholding authority and instead represents the corporation in all regulatory relations with government agencies.

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