Planning to Start a Company In Dubai Mainland?
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Dubai Mainland company formation continues to evolve as the government has slashed the prices, introduced instant licenses, and allowed 100% ownership for commercial trading. Also, the mainland ranks top in terms of the number of permitted business activities. As far as the process of business setup in Dubai is concerned, entrepreneurs must go for the mainland option to cater to a large number of customers.
Setting up a company in Dubai mainland is a straightforward process. Still, the legal aspects may appear to be daunting for foreign investors with little knowledge about the business legislation and other standard procedures. However, those tasks can be effectively tackled with the help of business setup consultants in Dubai. The process, corporate structures, benefits and the process of obtaining a Dubai mainland license are explained here.
Business Licenses Issued in Dubai Mainland
Entrepreneurs should first obtain a business license to do any type of business in Dubai. Running a company in Dubai mainland without a trade license is a punishable offence. The Department of Economic Development (DED) is the competent authority that regulates the issuance of business licenses in the Dubai mainland. DED issues the following types of licenses for company incorporation in Dubai mainland:
1. Commercial License
A commercial license is issued for businesses that are engaged in activities such as trading of goods which may involve importing, re-exporting and trading of permitted goods. The activities may include wholesale and retail trade, construction, transportation, stockpiling, communication, financial intermediation, real estate, and leasing. Foreign investors who obtain a commercial license in Dubai mainland are entitled to 100% ownership of their company.
2. Professional License
Professional license in Dubai mainland is issued to service-oriented activities and individuals who wish to practice a skill in which they are experts. The activities may include services covering sectors such as education, health, social work, community, social & personal services.
3. Industrial License
Industrial activities are the activities that require capital to be practised. They include manufacturing, mining, quarrying, electricity, gas, and water.
Permitted Legal Structures in Dubai Mainland
Determining an appropriate legal structure is one of the most critical decisions an investor needs to make while incorporating a company in the Dubai mainland. The legal structure of a Dubai mainland company is defined based on the number of shareholders. The DED mainly allows the following legal structures for companies in Dubai mainland.
A sole proprietorship or sole establishment can be established in Dubai mainland with only one shareholder. Both the owner and the shareholder will be a single individual who can completely own the company. A sole proprietorship must be owned by an individual, which means a company cannot be the owner. The owner is solely responsible for the profits and liabilities of the sole establishment in Dubai mainland. Foreign nationals are only allowed to start a sole establishment under professional activities.
Limited Liability Company
A Limited Liability Company (LLC) is one of the most popular forms of legal structures in Dubai mainland. Foreign investors can set up an LLC in Dubai mainland with 2 to 50 shareholders. Each shareholder in LLC is liable to the extent of his or her shares in the company. Foreign investors are entitled to 100% LLC ownership on selected activities laid out by the DED, including commercial licenses such as a General Trading License.
A civil company is essentially a partnership business for professionals engaged in approved fields such as doctors, lawyers, engineers and accountants. Partners of any nationality can be involved in a Civil Company, but a Local Service Agent (LSA) is needed if the partnership doesn’t include UAE or GCC nationals.
Single Person LLC
A ‘Single Person LLC’ is a legal structure owned by an individual or a corporate body. It differs from a sole proprietorship as the liability is limited to the shares held by the entity that owns the One Person LLC.
Branches of Local & Foreign Companies
Companies registered in the UAE or foreign jurisdictions can open a branch in Dubai mainland. The branch must undertake one or all of the activities included in the parent company’s license. Business setup consultants in Dubai can assist both foreign and local companies to open their branches on the mainland.
Process of Company Formation in Dubai Mainland
The process of Dubai mainland company formation involves a set of streamlined steps that must be carefully executed to avoid any delays. Investors need to carry out the following steps to complete mainland company formation in Dubai:
- Choosing a business activity
- Determine an appropriate legal structure
- Get the company name approved
- Obtain an initial approval from DED
- Obtain external approvals for special activities
- Rent a space and submit the tenancy contract (Ejari)
- Obtain the license
Benefits of Dubai Mainland Company Formation
Choosing the mainland for initiating the process of business setup in Dubai is a strategic decision. Investors must weigh its benefits to incorporate a business in the mainland. The following are the significant benefits the foreign investors can gain by establishing a business in Dubai mainland:
- No strict requirement of minimum capital for incorporating a mainland company
- No restriction in business activities, unlike the free zones
- Owners of mainland businesses can open their office anywhere in Dubai
- 100% repatriation of capital and profits are allowed and exempted from corporate tax for company formation in Dubai
Avail the Best Business Setup Services in Dubai
The process of business setup in Dubai mainland is generally devoid of complex requirements. However, the wrong choice of activities, legal structures etc., may derail the investors’ business plans. A better solution for such an issue is hiring professional companies that offer business setup services in Dubai, such as Jitendra Business Consultants (JBC). Our business setup consultants in Dubai offer the best services covering essential requirements such as visa processing, document drafting, government liaisoning, bank account opening etc. JBC’s core team is composed of business setup consultants, PRO service executives, compliance advisers etc. The support from such a strong team of professionals enables the entrepreneurs to incorporate a company in Dubai without any hassle. Apart from offering company formation services in Dubai, JBC also helps the companies meet legal obligations such as VAT, audit, Economic Substance Regulations (ESR) and Ultimate Beneficial Ownership (UBO).