Why Foreign Investors Prefer Mainland Company Formation in UAE?
Establishing a company on the UAE mainland seems attractive to foreign investors due to the growth opportunities that entrepreneurs can access in this part of the world. With more entrepreneurs seeking mainland company formation in the UAE, it is clear that the key features of a Dubai mainland company are of interest.
The major reason behind the popularity of a mainland business setup in Dubai is that companies in the mainland get the flexibility to trade internally and globally. Moreover, with over three thousand business activities to choose from, businesses can consider the advantages of registering a company on the Dubai mainland.
What is Mainland Company Formation?
If you plan to set up a mainland company in Dubai, you need to know what exactly constitutes a mainland company setup.
- First, a mainland company is authorized by the DET or the Dubai Department of Economy and Tourism.
- Businesses can open offices anywhere in the country.
- Businesses have the convenience to trade directly with the local markets.
- Foreign companies in the UAE can work with individual clients, private institutions and government bodies.
- Companies can hire unlimited employees (subject to office space)
Quite rightly so, starting a business setup in Dubai for foreign investors is quite a crucial decision. It is significant to understand the rules and regulations pertaining to mainland business set up in Dubai, the process of registration, and what a company in the mainland represents.
Before registration, let’s consider the major features and opportunities that foreigners planning on starting a mainland company can look forward to. These are also the benefits that make the procedures followed for mainland company formation in Dubai essential for foreign entrepreneurs planning on establishing a long-term commercial presence in the UAE.
What are the Opportunities for Foreign Investors in Mainland Company Formation?
The Federal Decree Law No 26 of 2020 allows foreign ownership. Foreigners can establish businesses and retain 100 percent ownership, based on the new provisions.
Setting up a mainland company in the UAE provides distinct benefits as follows:
- No Restrictions on Ownership
Mainland companies across different sectors now allow 100% foreign ownership. Hence, it removes the need to depend on any local partnership.
- Operational Flexibility
The flexibility to do business anywhere within the territorial borders of the UAE and beyond adds to the features of doing business in the Dubai mainland for foreign investors. There are no restrictions on doing business in any designated or specific area or zone. Businesses are free to trade within and abroad.
- International and Local Trading
Businesses can engage in business activities freely. Unlike free zone companies, mainland business does not have any limitations on trading globally as well as locally.
- Wide Variety of Business Activities
Dubai Mainland companies have the scope to expand and diversify their operational scope. Businesses can register for additional activities conducted in the mainland.
- Ease of Conducting Business
The business-friendly regulatory environment proves effective and convenient in doing business and growing your venture. To add to that, governments keep on updating the business laws with an emphasis to attract foreign direct investments.
- Strategic Location
As a getaway between the West and the East, mainland businesses can gain access to markets across Asia, Europe, Africa, and the Middle East. This provides global connectivity through land, sea, and air transportation links.
- No restrictions on trade
Unlike free zone companies, mainland companies in Dubai can trade and do business with international and local markets with ease.
- No restrictions on currencies
Mainland allows full repatriation of profits and capital.
Step-by-Step Guide for Mainland Company Formation in Dubai
- Step 1: Selecting Your Commercial Activity
Mainland company formation in the UAE facilitates choosing business activities of different kinds. Foreign investors can consider choices that range from industrial, commercial, and professional activities. It is significant to choose the specific trade license that aligns with your chosen business activity.
- Step 2- Choosing Your Legal Structure
For foreign companies, choosing the appropriate legal form is considered a vital step in the procedures for mainland business setup in Dubai, as it has an impact on liability, ownership, and taxation too.
- Step 3: Choosing a Trade Name
It is important to choose a trade name that complies with the naming guidelines of the DED. Make sure to avoid any kind of offensive or religious connotation.
- Step 4: Finding an Ideal Location for Your Business
It is imperative to choose the right location. Location plays a decisive role in the growth of a business venture. It is important to conduct extensive research. You can seek expert consultation from RichMan Associate to ensure that the selected site aligns with your operational and business needs.
- Step 5: Apply for Trade License
To establish your business in Dubai mainland, you need to submit some documents that include ownership details, shareholder visas, license application, and memorandum of sponsor arrangements to the Department of Economic Development (DED). The paperwork needs to be verified before submission to maintain adherence to the stipulated guidelines set by the DED.
- Step 6: Securing Your Commercial Space
This depends on your preferred business license. There are various types of commercial spaces available that range from pre-fitted offices, serviced offices, and shell and core setups. Leasing and renting out office space in the Mainland Dubai also require Ejari registration. This is needed for legal purposes and for processing visa applications.
- Step 7-Open Corporate Bank Account
After finalizing your office space and securing your trade license, your next step will be to approach banks to open your corporate account. You would require certain details like business address proof, MOA or Memorandum of Association, Business trade license, bank application form, business plan, passport copies of company directors and shareholders.
- Step 8: Apply for Visas
Applying for visas will be the next step after finalizing the setup. The number of visas needed should be relevant to the needs of the business employees and your dependents. It also depends on the commercial space you have.
- Step 9: VAT Registration
To register, you can check the official website of the Federal Tax Authority. The stipulated registration threshold is AED 375000 per year. To apply, you need to complete the registration form and provide business details like trade license, financial records, and bank information.
What are the Documents Required for Mainland Company Formation?
- Copies of valid passport of all managers and shareholders
- Certificate of Trade name reservation
- Emirates IDs and residence visas (if applicable)
- Certificate of Initial Approval from the Department of Economic Development (DED)
- Agreement of Memorandum of Association (MOA) or Local Agent
- Ejari-registered tenancy Contract for office space
- Any additional approvals from government (if applicable)
Cost Involved for Mainland Company Formation
The cost depends on a number of factors that include visa needs, office size, business activity type and licensing type. However, RichMan Associate provides complete cost breakdowns. There are no hidden fees. Our role is to ensure transparency in the business setup process.
Cost | Estimation |
Notary/MoA | AED 500 -AED 2000 |
Trade Name Reservation | AED 600-AED 1000 |
Initial Approval | AED 100 -AED 500 |
Trade License (Annual) | AED 10000-AED 50000 |
Attestation fees | AED 50 to AED 200 |
Bank Account Setup | AED 1000 -AED 5000 |
Per Visa Cost | AED 3000-AED 5000 |
Professional Service Fees | AED 3000 |
Conclusion
If you intend to trade freely within the UAE without being bound to any particular free zone, then a mainland business setup in Dubai is the right way forward for you. With a qualified business consultancy team to help you, you can complete all the requirements like reserving a trade name, preparing a MOA, and opening bank accounts rather seamlessly.
How RichMan Associate Can Assist Foreign Investors in Mainland Company Formation?
RichMan Associate is an experienced business setup consultant in Dubai with specialization in assisting foreign investors and entrepreneurs to start their business setup in Dubai. As professional business setup consultants, our services are tailored to meet the specific needs of our clients.
- Regulatory and Legal Guidance: We help you ensure that all legalities related to company formation in the UAE have been sorted. We assist you in understanding your responsibilities, duties, and rights as a foreign investor.
- Immigration and Visa services: RichMan Associate assists you in obtaining work visas and resident visas for mainland business setup in Dubai. Our professionals provide the necessary guidance in getting appropriate visas.
- Ongoing Assistance: We provide support to ensure you get the right advice at the right time. Our priority is to facilitate the smooth functioning of the business in line with the existing rules and regulations.
- Assistance with company formation: Our consultants assist businesses from the beginning, which starts from fulfilling license requirements to maintaining adherence with the rules and regulations.
Our services cover every aspect of company formation in Mainland Dubai, starting from deciding on the legal structure, to choosing the business activity, VAT registration, corporate bank account opening, and procuring necessary trade licenses and visas.
As an accredited business setup consultant, our business setup services in Dubai for foreign investors provide all kinds of necessary guidance that you need in your entrepreneurial journey.
- Tax and Accounting Services
- Trade license registry
- PRO services
- VAT registration
- Visa Processing
- Office Solutions
- Bank Account Opening
FAQs
How long does it take to complete the company formation process?
It depends on the administrative approvals. The choice of business activity can also determine the timeframe. Usually, it takes seven working days.
Can companies in the mainland bid for government contracts?
The answer to this question is Yes. Mainland companies can partake in government tenders.
Is it obligatory to have a physical office space?
Yes, it is compulsory to have a registered commercial space.
What are the different types of business licenses available in the Dubai mainland?
Companies can choose from primary categories of licenses that include industrial, professional, and commercial.
Is 100% foreign ownership allowed in the Dubai mainland?
Yes, the recent changes in the commercial law mandates 100% foreign ownership. Hence, foreign businesses can conduct business activities without any interference.
