07 May Benefits of setting up Mainland company in Dubai
A Mainland Company setup in Dubai is an onshore company that will do business in the local sector of Dubai, as well as in other parts of the UAE and outside the UAE. A local sponsor who is a UAE national is needed for the establishment of a Dubai Mainland Company. As a result, Dubai Mainland Company’s general shareholding pattern is,
- The company’s general shareholding pattern in Trading Activity is,
➢ Sponsor from the UAE – 51%
➢ Foreign Shareholder – 49%The company’s general shareholding pattern in Service Activity is,
➢ Sponsor from the UAE – 0%
➢ Foreign Shareholder – 100%
Fixed annual fees are the most popular, as they allow a foreign investor to retain complete control of his business while excluding the local sponsor or sleeping partner from any business activities or profit-sharing.
Process of Dubai Mainland Business setup
The process that one needs to follow for setting up a business in Dubai Mainland is simple and straightforward. Below is a stepwise guide as to how you can set up a business in Dubai Mainland:
- Decide on the business activity you want to do in Dubai
- Get a Local Service Agent who will be the acting Local Sponsor
- Check for location suitability, accessibility, and cost
- Obtain initial approval from the Department of Economic Development Dubai
- If all the prerequisites mentioned above are satisfied, you may apply for a Dubai mainland license.
- Submit all the relevant documents required for the company incorporation to DED and pay the required license fee.
Why Mainland is the best option for setting up a company in Dubai?
Today, Dubai is one of the most popular tourist and business destinations in the world. With a geographical strategic location, a large market base of consumers, the government’s excellent infrastructural facilities, a diverse pool of talented human resource from around the world, and the government’s business-friendly policies with the support of the Department of Economic Development, has a diverse pool of talented human resource from around the world (DED). These facilities among many other factors listed below make the mainland business setup in Dubai an attractive proposition.
- In Dubai, a Mainland Company is exempt from corporate tax.
- In Dubai or the UAE, mainland companies can trade with other mainland companies. They are able to conduct business in any part of the UAE or beyond. This distinguishes them from free zone businesses, as they are only allowed to operate within their designated free zone.
- In comparison to free zone businesses, mainland companies have more options for business activities. E.g., Companies in Dubai Media City must be involved in the media or industries closely related to it. For mainland businesses, however, there are no such restrictions, and they can access the wider UAE economy, which offers a wide range of opportunities.
- Mainland companies can choose any location in Dubai for their office. This feature allows them to not only trade with the local market but also to open multiple company branches, allowing them to establish a strong presence in the UAE.
- Mainland companies are allowed to work for the government, whereas free zone companies are not allowed to work for the government and are only allowed to do private commercial work.
- On a mainland license, there are no restrictions on the number of visas that can be obtained. However, the ability to obtain visas is contingent on the availability of office space. The more office space you have, the more visas you may be able to obtain.
- In Dubai, there are no currency restrictions for mainland business.
- Capital and profits can be repatriated in their entirety.
- The registration process for mainland businesses is straightforward. There is also no requirement for a yearly audit.
Dubai 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.
Cost of business license in Dubai
Before starting a business in Dubai Mainland it is mandatory to factor in the various processes that need to be followed and what are the costs of these processes, and one such process is acquiring a mainland license in Dubai.
In order to calculate the cost of a mainland license in Dubai, one needs to have a clear idea as to what kind of a license is needed which is totally dependent on the company set up in Dubai mainland by the investor. Businesses in mainland Dubai are provided licenses as per the nature of the activity that is being carried out by the mainland company.
Business involved in trading activities will require a commercial license, likewise, a company involved in industrial activities will require an industrial license, while a service-oriented business setup in mainland Dubai will require a professional license and business related to travel and tourism will require a tourism license.
The cost of a business license in Dubai can cost anywhere between AED 16,000 to AED 50,000. The total cost of acquiring a business license in Dubai is dependent on a number of factors such as company sponsor, location of business setup, the type of activity being carried out by business setup, number of partners, and the structure of the business.
Furthermore having a business license is a must for any business setup in Dubai mainland as it helps in identifying the business setup and ensures accountability of activities being carried out. It also helps an investor to take part in profitable government introduced measures.