The UAE has diversified its economy in the past 40 years to enable worldwide economic possibilities. As a result, the UAE has become one of the most welcoming and fast-growing business environments globally.
The government is highly adaptable, and it continues to improve the number of incentives available to new, experienced, and emerging businesses. So, if you're thinking about beginning a new business, company formation in the UAE is a viable alternative.
What is a Mainland Company?
A mainland company is an onshore firm that has been granted permission by the Department of Economic Development (DED) to conduct business in its region and beyond the UAE.
UAE legal structures and government laws govern mainland businesses, and they must operate within the boundaries of commercial geographical regions that are within the Emirates government's control. Here’s more on Company Formation in UAE that you should have a look at.
Benefits of UAE Mainland Company Formation
Before starting your business in the UAE mainland, it is essential to learn about the benefits. They are,
- 100% capital repatriation
- Exempted from corporate and income tax
- Can have more than one branch
- Foreign enterprises can trade/operate directly with the local market on the mainland
- Availability of a wide range of commercial activities
Types of Legal Entities in UAE Mainland
The most commonly adopted legal structures in mainland UAE are
In every other emirate in the United Arab Emirates, forming an LLC needs a minimum of two and a maximum of 50 shareholders.
The entrepreneur is solely accountable for the operation in a sole proprietorship and bears all earnings and liabilities. In addition to that, it cannot have more than one shareholder.
A civil company is a company owned by 100% foreign ownership with up to 3 shareholders and a local service agent. It's applicable for professional and service activities/licenses.
The branch company is not a separate legal entity. Instead, it is a subsidiary of a parent firm that conducts business under the same name. The parent company wholly manages it. As a result, there are no requirements for any shareholders.
In addition to that, if you want to know more, read about the types of legal entities in the UAE.
Business Activities in Mainland UAE
In the UAE, there are over 2,000 business activities to select from. In addition, a business/investment can have multiple business activities.
- Construction Sector
- E-Commerce Solutions
- Travel and Tourism
- Real Estate Agency
- Health Sector
- Handyman Business
- Consultancy Service
- Beauty Salon
- Import and Export Business
Steps for Mainland Company Setup UAE
Below are the steps one should consider before incorporating a business in the UAE mainland.
Identifying a Business Activity
Before setting up a company, one of the foremost things one should do is find the best business activity that suits you. Then, after getting a clear picture of what you will do, proceed with the following steps.
Selecting an Appropriate Legal Form
After finding the business activity, it is necessary to know the type of legal entities suits or fits your business. Depending upon your business activity, you can choose either LLC, Sole proprietorship, Civil company or branch.
Registering the Trade Name
Once you are done with selecting the legal entity, the next thing you should do is find a trading name. A trade name differentiates one business from another. It also indicates the nature and structure of the firm. An investor can apply for a trading name on the website or mobile application of each emirate's economic department.
Applying for an Initial Approval
Before obtaining initial approval, foreign investors must receive approval from the General Directorate of Residency and Foreigners' Affairs.
Before requesting the initial approval, some activities require additional permissions from government organisations linked to that particular firm. These operations involve legal and security matters and financial securities and commodities.
Drafting an MOA and Local Service Agent Agreement
A completed and signed Memorandum of Association (MoA) or a local service agent agreement (LSA) of the business is necessary, depending on the organisation's legal structure.
- Limited partnership
- Limited liability company (LLC)
- Public joint-stock company (PJSC)
- Private joint-stock company (PrJSC)
Select a Business Location
To operate in the UAE, all firms must have a physical address. In addition, the company premises and location must meet the standards set out by the Department of Economic Development of each emirate and local municipality land planning legislation.
Obtain a Business License
After completing the above steps, the following requirement is to obtain a business license. The license types differ as per the requirement of your business. Therefore, one should contact the particular government authority which determines your business. An investor can collect the business licence from the respective government authorities.
Types of Licenses in the UAE
Once you are transparent with the outline of the company set-up, the following process is finding out the type of license required for your business.
Before being permitted to provide professional services to clients, the UAE government requires businesses and entrepreneurs to get a professional licence from the Department of Economic Development (DED).
A professional licence ensures that a person or company is qualified to provide services in a particular field. The candidate must generally demonstrate specific abilities or training to get these licences.
For example, to establish a business in Dubai, all experts, specialists, craftsmen, and artisans must first get a professional trade licence.
A company that deals with the buying or selling commodities, and conducting a trading activity, needs a commercial trade licence.
This licence can be used to establish a limited liability corporation (LLC) or a single proprietorship. In the UAE, it may be used for both specialist and general commercial activity.
Broadcast and communications companies, retail companies, construction companies, healthcare businesses, real estate businesses, rental transportation services, and other general trading entities must apply for a commercial trade licence.
Businesses desiring to engage in industrial or manufacturing-related activities must first get an industrial trade licence, which allows them to engage in activities such as processing natural materials or combining natural resources.
The DED issues the industrial licence, but additional permissions from the other authorities should be required depending on the industrial activity.
To get a tourist licence, regulating government bodies such as the Department of Tourism and others must provide the necessary licences.
The existence of qualified management, a legitimate business strategy, and insurance are the primary needs of these departments.
Requirements to Obtain a UAE Trade Licence
To get a trade licence in the United Arab Emirates, one must first meet the following legal requirements:
- Determine whether your business is professional, commercial, or industrial;
- Decide on the sort of business you want to run;
- Determine the legal form of the business entity and the business's trade name.
As we reach the concluding part, I hope the details above have explained how a mainland company operates.
Business Setup Worldwide is a business consultancy organisation that can help you start a new business globally. If you are happy with this page, you may contact us if you need any professional assistance. We take great delight and joy in guiding entrepreneurs and investors.