For the last three decades, the UAE has undergone a huge business transformation and industrial revolution. Especially, the city of Dubai has become one of the most successful and prosperous cities of the world from a local trading community. Starting a business in Dubai mainland is very beneficial.
Firstly, there is no restriction on the scope of its business in case of commercial and professional licenses. Thanks to the new laws, having an Emirati local sponsor is no longer a requirement for company establishment in Dubai. So, it is valuable for new entrepreneurs as they don’t have to worry for arranging a sponsorship.
Mainland company in Dubai is an onshore company that can carry out its business activities in the local market. Moreover, it covers the whole of Dubai, other areas of United Arab Emirates, and even valid outside the UAE. Mainland companies deliver certain rewards to entrepreneurs over free zones.
Key takeaways of conducting business in Dubai Mainland
Here are the notable insights with statistics about doing business in Dubai Mainland.
- Foreign entrepreneurs taking interest in the UAE can apply for investment visas for up to 3 years.
- Expatriate investors can sponsor the family, household workers, and staff members for the UAE residency as well.
- Over the past 30 years, Dubai has grown from a small trading town into a major global business center.
- Dubai’s strong business appeal is evident from the opening of over 30,000 new businesses during early 2023.
- Business licenses in Dubai went up by 39% in comparison to March 2023 in March 2024.
- Popular types of the business licenses in Dubai mainland are commercial license, professional license, industrial license, and tourism license.
- To launch a Dubai mainland company, you need to have an office space, that is at least 200 square feet.
- Some of the busiest corporate places in Dubai mainland are Downtown Dubai, Business Bay, Deira, Al Quoz, and Jumeirah.
- Nowadays, foreigners can fully own their businesses in Dubai mainland without needing a local partner.
- However, some important sectors like oil/gas still require local nominee shareholders in the UAE mainland.
Best areas for setting up a company in Dubai Mainland
Here are some of the leading places for beginning a new business in Dubai mainland.
- Downtown Dubai: It is an excellent place to commence a business in Dubai mainland, and make it stand out. Downtown Dubai provides an inclusive business environment at a prime central corporate location. Its accessibility through major transport routes turns Downtown Dubai appropriate for property management firms, luxury brands, and finance businesses.
- Business Bay: This area in the center of the city of Dubai has many fancy office buildings. Business Bay is an excellent place for establishing banks, shops, hotels, and other high-end companies. Because, it has accessible road connectivity and infrastructure, many businesses like to set up here.
- Deira: As, one of the oldest business areas in Dubai, it is famous for its busy markets like the Gold Souk. Therefore, electronics trading companies, tourism firms, rental businesses, and consumer shops like to open here. Deira is a good place for saving money on commercial rent, while easily reaching many local and foreign customers.
- Al Quoz: It is a busy industrial area in Dubai where you find lots of factories, warehouses, and workshops. Together with industries, Al Quoz is suitable for other kinds of businesses too. It is a good spot for companies that need production and storage spaces to make and move their products.
- Jumeirah: Its location on the Dubai beach makes Jumeirah an ideal place for both residential and commercial purposes. Jumeirah has big VIP houses, nice posh shops, premium hotels, and top-level vacation rental destinations. It is a great place for real estate businesses, luxury stores, restaurants, travel companies, and yachting firms.
Top benefits of forming business in Dubai mainland
These advantages of forming business in Dubai mainland make it a preferable choice for entrepreneurs and new company owners.
- Mainland businesses can trade with other mainland companies in Dubai or the UAE.
- There is no minimum capital requirement for the formation of mainland companies.
- Mainland firms have the flexibility to do their business in any part of the UAE or beyond. This feature sets them apart from free zones companies, because latter companies are bound to operate their business in their respective free zone.
- Also, mainland companies have more options for business activities unlike free zone businesses. For example, companies in Dubai Media City must work in the media or closely related industries. However, there is no such limitation for mainland business and it can open up to wider UAE economy with much scope of diversity.
- Mainland establishments can choose their office location anywhere in Dubai. This feature allows them not only to trade within the local market. Also, they can open up multiple branches of the company thus enabling them to build a strong presence in UAE.
- There is no currency restriction on a mainland business in Dubai.
- Mainland entities can take on governmental work unlike free zone companies. The latter are prohibited from undertaking government contracts and are only allowed to carry out private commercial work.
- There is no limitation on the number of visas on mainland license. Nevertheless, the eligibility to obtain visas depends upon office space. The more office space you have, the more number of visas you may get.
- 100% repatriation of capital and profits are admissible for mainland enterprises.
- Registration process for mainland companies is simple and hassle free.
- Also, there is no yearly audit requirement for mainland businesses.
3 Reasons to shift your company setup to Dubai mainland
These are some motives behind shifting company setup to Dubai mainland from a free zone.
- Necessity for growth
- Enabling and promoting diversification
- Access to lucrative government contracts
Next, we look at three reasons for how you can venture into the profoundly profitable realm of Dubai mainland.
Necessity for growth
After spending some time in a free zone, your company may be in a position for expansion. One of the biggest pulls of the UAE is its stable, diverse, and dynamic economy. Free trade zones are ably stationed in the country so that it can tap into this wealth easily. However, there comes a time where one invariably finds their growth potential limited by clear-cut rules on staffing, offices, and interaction with the Dubai mainland.
Inherently, the free zone licenses confine enterprises to a designated zone, and they can not do direct business with the Dubai mainland. If your free zone company is going to evolve into a mainland company formation in Dubai, then first, you have to start trading with the mainland UAE entities. To do that, you have to pay customs duty via local agents who will charge you for their services.
If that all seems a bit complicated for you, then you can simply open a mainland branch of your free zone company by registering with Dubai’s Department of Economic Development (DED). Having said all that, now is a good time as any to consider the switch. The UAE Ministry of Economy has just announced that the restriction on foreign investors from owning more than forty-nine percent of onshore companies in the UAE has been partially lifted.
The divergence from such a long-standing principle in the UAE law signifies a strategic move to support the future growth of the country through foreign investment. The change in the general perception that this brings counts for a lot. Because, it is a move to the Dubai mainland is a powerful statement of intent that your business partners, your clients, and your distributors and suppliers will buy into.
Enabling and promoting diversification
For your free zone company, growth might translate into diversifying into new services, products, or sectors. For mainland companies, doing so is an easy administrative decision. But In a free zone, this small thing needs more work.
Free zone authorities in charge of issuing business licenses and permits tend to write everything in detail so that the entrepreneurs don’t step out of line. Typically one named industry per license is allowed. If you wish to broaden your horizons by migrating into a new vertical, you need zone sign-off – a law with strict and inflexible requirements that are regularly denied to applying businesses.
If you want to indulge in Employee diversification oftentimes, you are not permitted to do that. For example, Dubai’s Media City Free Zone only accepts companies that work in the media and media only. It’s the same in Dubai Healthcare City (healthcare). If your diversification plans don’t reflect your chosen free zone, a negative response is to be expected.
Access to lucrative government contracts
Gaining the favors of the government anywhere in the world is a huge advantage for business owners. Similarly, in the UAE, if the government bestows its tender to you, it means that you are a respectable and trustworthy business entity. Not to mention are exceedingly profitable if you manage to snag one of these coveted tenders.
The UAE government spent a total of over 4 billion AED on upgrading infrastructure and nearly spent 1.2 billion AED on education. And the value of ongoing UAE construction projects is estimated to be a staggering 3 trillion AED. This all means that there is a windfall happening in the Dubai mainland, and you are missing out by staying in the free zone i.e., the proverbial sidelines.
Similarly, the governmental expenditure in Dubai is sky-rocketing with fresh requirements for construction and development. With the UAE perpetually and relentlessly evolving, getting a piece of that transition is life-altering. The problem is that free zone companies cannot apply for the bidding. Only mainland company setup can bid for government jobs and tenders.
Once again, the only foolproof way for a free zone business to expand is to turn to the Mainland and re-register. Once the company set up in Dubai mainland is complete, and a license is obtained, can you proceed and diversify. On the flip side, there’s no longer a third party– regulatory authority– deciding the fate of your business.
Dubai mainland as destination for company formation
Around the world, Dubai has become one of the most attractive destinations for tourists and businessmen alike. Dubai resides on a geographical strategic location that combines East and West with a market of over 2.2 billion consumers. Its plus points are government’s business setup friendly policies, infrastructural facilities, and a diverse pool of skillful human resources.
Department of Economic Development (DED) is responsible for business setup in Dubai inside the mainland. Therefore, it oversees company registration, business licensing, commercial compliance, and consumer protection in Dubai. DED encourages and eases the process of new business formation in the mainland.
Importance of Dubai mainland for free zone businesses
Easy company formation, hundred percent foreign ownership, zero percent taxes, and other such excellent perks are proven to draw hordes of seasoned business owners and budding entrepreneurs to the shores of the UAE free zones. Why, then, do so many investors each year swap the safety of a free trade zone for the uncertainty on the Dubai mainland?
Put simply; this is a logical progression of a successful business. Right off the bat, setting up a business in one of the UAE’s forty-five free trade zones is prudent. Over thirty thousand companies are currently trading from the three most prolific UAE free zones alone.
Rising entrepreneurs can start their company in a free zone and hop on the fast-track via pre-packed licenses, employee visas, and corporate bank accounts. This paradigm works well for those who want to test the climate. However, as hardened veterans may attest, a time comes when expanding your business is the only logical progression, and that demands a DED license and relocating to the mainland.
Free zone companies are ideal starting points for UAE business. These economic zones offer a chance for new entrepreneurs to establish their enterprises in an opportunity rode business landscape. Accordingly, they can get the knack of doing business there.
But, the diversification – vital for continuing growth and expansion of your business has restriction here. These bottlenecks are what makes the businesses that have initially found success in the free zones. After-all, they wish to further capitalize and invest in that promising start.
If you observe the aforementioned paragraphs, we can see a common theme emerging. The freshly-arrived entrepreneurs have found their bearings of the UAE business in the free zones already. So, they are ready to strike into new horizons armed with the knowledge that you acquired through your initial success there. With the right guidance from company formation specialists, relocating from a free zone to Dubai mainland is a smooth and manageable move.
No need of local sponsors for mainland Dubai business
Nowadays, foreign investors can hold 100% ownership of the mainland companies. Nonetheless, local sponsors can prove advantageous in another way. You can use them as business activity partners and financial backers.
Once, appointing a UAE national as a local sponsor was a pre-requisite for the formation of mainland company in Dubai. In turn, the general shareholding pattern of a Dubai mainland company was UAE national sponsor [51%] and foreign shareholder(s) [49%]. It was different from the free zones, where full ownership rights were available to the expat investors.
For profit sharing between local sponsor and foreign investor, mainland business in Dubai offer a flexible legal arrangement. A sponsor can be paid a fixed annual fee, percentage of sales or percentage of profits. Among these, fixed annual fees is most popular, as it allows foreign investor to retain 100% control of his business. Local sponsor or sleeping partner will not have involvement in business activities or profit sharing.
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Conclusion
These above factors have made a crucial role in making Dubai a dynamic business hub. Business consultants facilitate entrepreneurs in the formation of their mainland businesses in Dubai. Furthermore, they help them to find a local sponsor, appropriate business premises, financial assistance, or handling legal documentation formalities.
Free zones are fantastic places to get your feet wet and get to know the business landscape of the UAE and offer a proven and safe path towards establishing a business in the UAE. They are by nature, however, limited in how they can expand and capitalize on initial success within this magnetic, kinetic economy. Life beyond the free zone is full of freedom and opportunity (both investment and business).
Make your transition from a free zone enterprise to a mainland company formation Dubai easy as a pie. The usual course of action is hiring of company formation specialists that can handle the nitty-gritty of the incorporation mechanism. So that you can focus on growing your business in the UAE and globally.
KWS Middle East assists you in incorporation of your company from start till end in the and hassle free manner. Get a free consultation about mainland company formation in Dubai in the most professional way. Contact one of our experts to get set go. Call us at +97180059763, email us at info@kwsme.com, or WhatsApp us at +971509664705 now.
Our Clients Reviews
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Their expertise is evident, and they go above and beyond to ensure everything is compliant and completed on time. I highly recommend their services to anyone looking to establish a company in the UAE with peace of mind.
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FAQs about opening business in Dubai mainland
These are the answers to common questions about incorporating a business in Dubai mainland.
Why choose Dubai mainland for establishing a business?
Incorporating a business in Dubai mainland provides limitless market access, allowing trade operations throughout the UAE and internationally. Also, mainland companies can bid for lucrative government contracts, improving corporate growth opportunities. With ease of doing business, mainland firms have no minimum capital requirement, and get flexibility in visa limits.
Can foreign investors own 100% of Dubai mainland company?
As of 1st June 2021, expatriate investors can fully own the businesses in Dubai mainland. While, a few strategic sectors like defense, telecom, finance, and oil/gas still require local nominee partnerships. Previously, foreign investors could keep 49% shares, while appointing a local Emirati as a partner with 51% shares.
What license types are available for Dubai mainland businesses?
Department of Economic Development (DED) and Department of Tourism and Commerce Marketing (DTCM) oversee several licenses in Dubai mainland. Each kind of license ensures legal compliance and grants you the ability to operate within the scope of your business. These types of licenses are available to conduct specific activities in different sectors.
– Commercial license for buying, selling, importing, and exporting goods
– Professional license for skilled services like consultancy, IT, or healthcare
– Industrial license for manufacturing, processing, and packaging operations
– Tourism license for travel agencies, tour operators, hotels, hospitality services
How much does it cost to set up a business in Dubai mainland?
Licensing of a mainland company in Dubai can cost between AED 25,000 and AED 50,000. However, the corporate setup cost depends on the scope of your business, and the type of license you need. Some verticals needing additional regulatory permissions and particular operational requirements can increase the expenses to the north of AED 100,000.
Which are the rates of corporate tax in Dubai mainland?
These are the slabs of corporate tax for qualified persons and companies in UAE and Dubai mainland.
– Qualified persons and mainland companies earning up to 375,000 AED (about USD $100,000) are exempt from the corporate tax.
– However, mainland companies generating over 375,000 AED revenue are subject to 9% corporate tax on profits from June 2023.
– Large multinational firms whose profits are above EUR 750 million (AED 3.15 billion) are bound to pay a 15% tax.
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