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Let’s Know About Business Setup in Mainland

By Shivangi - 14 Dec 2021 Last Updated: 06 May 2022
Let’s Know About Business Setup in Mainland

All Business Formation activities on Dubai's mainland are licensed and regulated by the Dubai Department of Economic Development (DED). In order to stimulate commerce and entrepreneurship, the DED has multiple business license categories for investors to execute various commercial operations in Dubai and the UAE.

The first step in starting a Business Setup in Mainland is to familiarize yourself with the policies and processes of the Dubai Department of Economic Development. We've put together this post to help any prospective business owners and entrepreneurs interested in starting a business in Dubai. It outlines the role of the Department of Economic Development (DED) in Dubai and the many services they provide. Let's start with an explanation of what a Mainland corporation is.

Company Formation or Business Setup in Mainland

A license to form a mainland firm, also known as an onshore firm, is issued by the Department of Economic Development. Without any restrictions, a mainland company can do business in the UAE market as well as outside the country. An entrepreneur must first understand the term "Mainland" as defined by the DED before deciding to create a Mainland Company in the UAE.

You must first register with the Department of Economic Development in order to launch a business on the UAE's mainland (DED). A mainland corporation is a legal body that is permitted to conduct business both within and outside of the country. The three most significant benefits of establishing a business in Mainland are as follows:

  • The option of choosing a location in any part of Dubai.
  • The ability to trade anywhere in the United Arab Emirates as well as worldwide.
  • The ability to participate in a wide range of commercial activities.

This is for persons who want to create a Business Setup in mainland that the Dubai Economic Department has approved (DED). We can help you set up a mainland company in conformity with the UAE government's rules and regulations.

The following are some facts about Business Setup in Mainland:

  1. These businesses are governed by Federal Law No. 2 of 2015, which took effect on July 1, 2015.
  2. No expatriate can own more than 49 percent of the shares in a commercial limited liability company (LLC).
  3. Any national of the Gulf Cooperation Council (GCC) can own 100% of a company's equity.
  4. Partnerships with UAE nationals can be formed by companies or individuals from the Gulf Cooperation Council (GCC).
  5. Under UAE law, only UAE nationals are authorized to own 100% of certain business activities.
  6. Professional businesses can be held fully by expats or foreigners, however service agents must be UAE nationals.
  7. It is classified as an onshore commercial entity in the United Arab Emirates.

Department of Economic Development (DED)

The Department of Economic Development (DED) is a Dubai government body that oversees and manages the emirate's economic agenda. Their purpose is to improve and accelerate Dubai's economy's long-term growth through strategic plans and strategies. Sami Al Qamzi is the current Director-General of Dubai's Department of Economic Development.

The ultimate purpose of DED Dubai is to turn Dubai into a global economic powerhouse. Six strategic pillars are helping to achieve this goal, each of which strives to establish the required infrastructure, technology, and regulatory framework to encourage local and foreign investors, businesses, and small and medium enterprises (SMEs) to do business.

Pillars of the Department of Economic Development

The following are DED's six strategic pillars:

  • Development of the economy.
  • In the marketplace, there is a lot of competition.
  • In the corporate community, there is joy.
  • Economic planning and forethought are essential.
  • DED should be pushed forward.
  • It is critical to maintain financial stability.

Dubai's DED Divisions

The Dubai Economic Department is divided into four departments, each supporting a different element of the Dubai economy.

Exports from Dubai

Customers and suppliers in the UAE's export business can get help from this DED group.

FDI in Dubai

Foreign enterprises interested in investing in Dubai's economy can take advantage of the Dubai FDI programme.

SME in Dubai

This section was formed in 2002 by the Dubai Department of Economic Development (DED) to assist Dubai's small and medium company sector.

Dubai's Economic Situation

This group was established to ensure that businesses engage with local, federal, regional, and international entities. Another name for it is the Dubai Competitiveness Office.

Department of Economic Development Products and Services

The Department of Economic Development is in charge of monitoring Dubai's business sector's development as well as providing services related to issuing, modifying, and monitoring business licenses in Dubai, such as the DED e-trader license. Currently, the Dubai Economic Department (DED) may issue a trade license for over 2,100 different business activities. These business operations are divided into four categories: industrial, commercial, professional, and tourist. The e-services portal on the DED website allows you to access five distinct types of services. A list of all DED services available on the website is provided below.

  1. Update Mobile Number
  2. Reserve Trade Name
  3. Renew Trade Name
  4. Renew license
  5. Print license
  6. Pay Inspection Fines
  7. Manage License Contact
  8. License Activities’ Terms and Conditions
  9. Issue Initial Approval
  10. Issue Branch Initial Approval
  11. Instant License

Read More: Free Zones for Setting up an Ecommerce Business in the UAE

Types of Company Formation or Business Setup in Mainland

There are 5 Types of Legal Formation for Business Setup in Mainland as followed:

  1. Sole Proprietorship
  2. Civil Company
  3. Branch of Foreign Company
  4. Partnership Firm
  5. Limited Liability Company Formation

Formation of a Sole Proprietorship Company in Mainland

In Dubai, a sole establishment, also known as a Sole Proprietorship, is a firm owned wholly by one individual. As a result, a corporation cannot hold a sole proprietorship. The individual is the only owner of the business. This gives the firm owner complete management and a 100 percent profit share. As a result, he or she is totally liable for any debts or losses.

Anyone from any country can start a sole proprietorship, often known as a professional license. A Local Service Agent (LSA) is necessary to support the license if the person is a national of a country other than the UAE or the GCC. A service agent's role is to supply the services that the company requires. For instance, assistance from the Immigration Department, the Department of Economic Development, and the Ministry of Labour. They have no financial obligations or responsibilities to the company, either inside or outside the Emirate.

Benefits of a Sole Proprietorship in Mainland

  • Foreign professionals can retain complete ownership of their business.
  • The company can lawfully provide professional services anywhere in the UAE, including Free Zones.
  • The company has no constraints on where it can rent or buy office space.
  • The government has fully removed all paid-up capital requirements.
  • The owner/s can also change the legal form, according to DED laws.

Civil Company Formation in Mainland

Civil Company must be created as partnerships with business owners who hold industry-specific professional qualifications. While civil firms can be owned entirely by foreigners, trading from the mainland requires the use of a Local Service Agent (LSA) in the UAE. Unlike local sponsors, LSAs have no financial stake in your business. The LSA's role is to simply engage with government authorities on your behalf, assisting with license approvals, work permit and visa applications, and other such matters, for which they are paid a flat fee or a percentage of company earnings.

Benefits of setting up a Civil Company in Mainland

So, if you're a qualified expert looking to make a reputation for yourself in the UAE, you should think about whether starting a civil corporation is the best option for you. Here's all you need to know to make an informed decision.

  • 100% liability vs. LLC
  • Quick and Easy Set up
  • Setup is Inexpensive
  • Working with a Local Service Agent (LSA)
  • Apply for Numerous Visas
  • It’s Easy to Sponsor Dependents
  • Set up with Multiple Shareholders
  • Easy to arrange your Corporate Bank Account

Branch of Foreign Company Formation in Mainland

According to Article 313 of the Company Law, a foreign company can do its primary business in the UAE by establishing a branch or a representative office. The difference is that a foreign company that establishes a branch in the UAE can engage in any activity for which it has been licenced, whereas a representative office can only promote the parent company's products and services. Unlike a foreign branch, a representative office is unable to do business or sell its products. The corporation must first obtain a licence from the Ministry of Economy, followed by a licence from the Department of Economic Development, before engaging a foreign branch to conduct business in Dubai. Each of these legal arrangements allows the corporation to access the local market to varied degrees.

Benefits of a Foreign Company Formation in Mainland

Some of the benefits of establishing a branch or representative office in the United Arab Emirates are as follows:

  • Foreign enterprises can maintain 100 percent foreign ownership in the UAE.
  • A foreign corporation does not need to prove that it has been in existence in its home country for more than two years (some Free Zones require longer).
  • The corporation may legitimately conduct the permitted activity in its licence anywhere in the UAE, including Free Zones.
  • The company has no constraints on where it can rent or buy office space.
  • The government has permanently waived any paid-up capital requirements.

Partnership Firm Formation in Mainland

In simple terms, a General Partnership is an arrangement between two or more partners in which each member is jointly and severely liable for the company's obligations to the extent of their assets. Only UAE nationals are allowed to form a General Partnership Firm in Dubai. By agreement, proof of existence, or estoppels, the partners in a partnership are personally liable for the firm's responsibilities and legal action. The partnership agreement must be written, with the profit-sharing system between the partners spelled out in detail. In the event of a partner's death, insanity, insolvency, or withdrawal, the partnership must be dissolved. The remaining partners who want to continue working together must write a new partnership agreement, as well as any new partners who join at this time.

Limited Liability Company Formation in Mainland

One of the methods to start a business in Dubai is to form a Limited Liability Company, or LLC for short. A Limited Liability Company is the most common type of business in Dubai. It can be formed with as few as two and as many as fifty shareholders, each of whom is exclusively responsible for their share of the company's capital. Most companies with foreign partners pick an LLC because it is the only option that allows an expatriate to have full legal ownership of a local corporation, i.e. 49 percent. Because a UAE national must be a partner in the LLC (with a 51 percent shareholding), the potential investor can select one UAE national (sponsor) to be a partner.

The Benefits of a Limited Liability Company in Mainland (LLC)

  • Dubai LLC gives you unrivalled access to the entire UAE economy.
  • There is no minimum amount of capital required.
  • On a day-to-day basis, the firm can be operated by the investors without the involvement of the local partner.
  • It's straightforward to open a corporate bank account, and financing is readily available.

Conclusion

Dubai not only offers fantastic business opportunities to regional investors. It is, nevertheless, a thriving worldwide market for companies looking to develop globally. Dubai is an excellent destination to do business and has a large market reach. This is an excellent time to establish a mainland company in Dubai because the market is quite welcoming to new businesses, with straightforward legal procedures. All you need is a local sponsorship set up under a Dubai LLC corporate structure, which we can help you with as well. All mandatory permits and company creation are handled by the Department of Economic Development.

According to trade analysts, incorporating a mainland firm in Dubai is the next crucial milestone for all new entry enterprises. Dubai's market has long been the most lucrative for multinational enterprises and talents; in other words, you needed perfect talent and your clients were happy with your selection. Dhanguard will assist you for Business setup in Mainland with the Guidance of our Team.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

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