We’ll go through the benefits of setting up a corporation on the Dubai Mainland, the procedures you need to follow, and the documentation you need to submit.

An overview of Dubai mainland company formation

A mainland company is an onshore business that has been granted a licence by the appropriate emirate’s Department of Economic Development (DED) and is free to conduct unrestricted business both domestically and abroad. Because it offers the greatest number of advantages that the nation has to offer in terms of business formation, Mainland is the most well-liked and practical alternative when it comes to registering a company in Dubai. There are, however, guidelines that must be followed, one of which being that a UAE national must possess at least 51% of the total stock in any commercial company, with the following exceptions:

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  • Activities that permit 100% foreign ownership.
  • Free Zone-based businesses.
  • Partnerships between businesses in the GCC.
  • National companies headquartered in the UAE that permit total local ownership.

Depending on the type of license, either a local partner (Commercial and Industrial license) or a Local Service Agent (Professional License) is required when opening an oil trading business in Dubai. If the business is 100 percent owned by an expatriate and provides expert services, a professional license is necessary. The local service agent represents you in administrative dealings with government agencies. It’s important to note that the local service agent does not hold any ownership stake in the company and is compensated annually for their services.

Benefits of Dubai mainland company formation:

A Mainland company incorporation in Dubai has a number of popular benefits, including the following:

Trade independence:

You can conduct business in Dubai from anywhere with the help of the mainland business system. By establishing a mainland company with a Dubai base, investors can plan and carry out any kind of transaction without being concerned about the legal ramifications of breaking trade license regulations. To start a business in the United Arab Emirates, the investor must select a Local Service Agent (LSA). This Local Service Agent can assist you with your business license application. Additionally, they will help with any additional legal needs pertaining to translation work.

The ability to expand and take part in global trade:

Are you seeking the freedom to expand your business internationally or enter new foreign markets? With a mainland company formed in Dubai, you are free to conduct international business. It also helps you to look into growing international ties. Flexibility organizational structures easily adjust to new markets. For instance, when your product or service unexpectedly experiences a rise in demand in a particular market, you must plan and implement the logistics to quickly enter that market.

The capacity to increase commercial opportunities:

Dubai’s smart city infrastructure enables businesses to grow and diversify their operations. Greater opportunities for business growth and expansion are provided by corporations established in Dubai Mainland. In comparison to other business formations in the UAE, Dubai’s mainland business setup offers a shorter, less constrained, and quicker administrative process.

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Business partnership with the government of the UAE:

A mainland company has access to valuable government projects and contracts, as contrasted to other commercial setup structures in the UAE. The UAE has a large government. Its projects and contracts are therefore worth millions of dollars. Therefore, if your mainland company establishment is approved by the government, you benefit from long-term commercial performance and profit creating. Keep in mind that having the opportunity to work with the UAE government enhances your business’s standing and reputation both at home and internationally. Gaining government contracts in other countries would be made easier by cooperating with the UAE government.

How to do dubai mainland company formation?

The process of forming a company in Dubai’s mainland is simple and easy. A general explanation of how to set up a mainland corporation in Dubai is provided below:

Choosing a Commercial Activity:

The first step in starting a corporation or business is to select a commercial activity. It is crucial to research the Dubai market and reserve and register the business idea. Seeking guidance from an expert can help in making a wise choice, as the required license and additional permits depend on the chosen business.

Reserving the Business Name:

After determining the trading strategy, the next step is to reserve the trade name. Selecting a suitable name that complies with government regulations can be challenging. Seeking advice from professionals, such as Business Incorporation Zone, can help in choosing an appropriate trade name.

Selecting the Legal Framework:

The legal framework for your business will depend on factors such as ownership structure and the number of shareholders. While Dubai Mainland offers various legal structures, the Limited Liability Company (LLC) is the most popular choice.

Obtaining a License:

Once you have finalized your business activity, secured the trade name, and determined the legal framework, it is time to submit your license application. This involves submitting the necessary paperwork to the Department of Economic Development (DED) in Dubai.

Office Renting:

Renting or leasing an office space is an optional expense, as not all business activities require a physical workplace. Some operations, such as digital marketing and social media marketing, can be conducted remotely. However, if an office space is needed, it will be necessary to sign a lease agreement with the landlord.

Apply for the Necessary Visas:

You might feel the need to hire employees as a business owner to assist you in running and expanding your company. You may hire employees within the UAE or even from outside. However, if you want to hire outside workers, you must sponsor their visas. If you plan to call your spouse or any dependents, you will also need to file for their visas.

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Difference between Mainland and Freezone in Dubai

Rates of Corporate Tax:

Before registering a company in Dubai, whether on the mainland or in a free zone, it is crucial to check the tax rates. Companies with mainland locations will be required to pay Corporate Tax at 9% on income over AED 375,000 per year starting on June 1st, 2023. Companies that are situated in the Freezone, however, would not be subject to taxation.

As a result, if you want to take advantage of the Corporate Tax Exemption, you should register in the Freezone rather than on the Mainland of Dubai because companies registered in the Freezone are not required to pay Corporate Tax for 50 Years. Many businesses have begun moving from the mainland to the freezone as a 9% corporate tax is applicable in all of the UAE’s emirates, including Dubai.

Office Location:

Companies from the Mainland are not allowed to register in a virtual space and are required to have an office with a minimum square footage of 200. Although the office space can be anywhere, having one is required. However, having an office location is not required for Freezone businesses. A business with a free zone location can also run through a virtual office space. Because it saves money, the majority of business owners opt to register their companies in virtual office spaces.

Restrictions on VISA

Mainland businesses may issue VISAs based on the amount of office space they possess. The number of VISAs that can be issued increases with office space. There are various limitations on the number of VISAs that Freezone businesses may apply for. The typical range of VISA applications is between 1 and 6, albeit this can vary from free zone to free zone.

Documents required for formation Mainland Company in Dubai

To form a mainland company in Dubai, the following documents are typically required:

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  1. The company formation application form provided by the Dubai Department of Economic Development (DED) needs to be completed.
  2. A trade name should be selected and reserved. This can be done through the DED’s website or by visiting their office.
  3. The MOA outlines the company’s activities, share capital, and ownership structure. It should be notarized and attested by a public notary or Dubai Courts.
  4. The shareholders’ copies of passports, residency visas, and Emirates ID cards are required. If any shareholder is a company, the relevant corporate documents like Certificate of Incorporation, Memorandum and Articles of Association, and a board resolution authorizing the shareholding are necessary.
  5. The manager’s passport copy, visa page, and Emirates ID card copy are needed. If the manager is not a shareholder, an employment contract may also be required.
  6. Local service agent agreement (mandatory for foreign-owned mainland companies).
  7. Lease agreement (The lease should be valid for a minimum of one year).
  8. Depending on the business activity, additional approvals or special licenses may be required from specific government departments or regulatory bodies.
  9. Additional documents: Some business activities may require further documentation such as approvals from the Dubai Municipality, Dubai Health Authority, Dubai Civil Defense, or other applicable authorities.

Conclusion –

If business owners choose the Dubai mainland company formation, then it is a good option. On the Dubai mainland, a business license is issued by the Department of Economic Development. To simplify the process, take assistance with us.