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. There are many benefits of forming business in Dubai mainland.
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.
Advantages of setting up mainland business in Dubai
Numerous rewards 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.
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.
Bonus: Invest in real estate sector in Dubai
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.
Read further: Importance of trade name for company registration in Dubai
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.
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.
FAQs about forming business in Dubai mainland
These are the answers to common questions about establishing a business in Dubai mainland.
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.
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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