Introduction
Dubai has worked very hard over the years to build a status that could assist them in being recognized for years to come. Sheikh Mohammed bin Rashid Al Maktoum has played a role in creating a vision that not only sees the country excel but for those who decide to base themselves here completely. From nurturing the tourism industry to the real estate industry, the ruler of Dubai has continued to fulfill his promises to ensure people live their dreams, which consist of nothing but peace and safety.
To relocate people to the United Arab Emirates, where the rulers have done a fantastic job creating a place worth bringing people in, there is a lot of confusion that comes to the table when it comes down to that one question that people have: ‘How to set up a mainland company in Dubai?
In this blog, we will be unpuzzling the confusion on what factors are required to focus on when setting up a Mainland company in Dubai.
Understanding the Geographic Map for Setting Up a Mainland Company in Dubai
When wanting to start a company in Dubai, United Arab Emirates, it is important to understand the geographic map, which consists of 7 emirates: Abu Dhabi (the capital), Dubai, Sharjah, Ajman, Umm Al Quwain, Fujairah, and Ras Al Khaimah.
We also need to utilize the situation brought by the government with displacing two main jurisdictions to allow an individual to start a company with them being the mainland and the Freezone.
Benefits of Setting Up a Mainland Company in Dubai
The mainland is a jurisdiction formed by the government to allow business owners to base their business on the mainland if they aim to target the local market. This jurisdiction has its own fair share of benefits which imply to a business owner forming their company in the mainland, which consists of the following:
1. Physical Space Requirement
The mandatory importance of obtaining a physical space, which could be in terms of an office or a shop, showcases a physical presence that could allow an individual to help attract the local market.
2. Business Activity Group Limitation
A mainland company can add one single business activity group (add up to 10 activities from the same group) and not more than that.
For example, if you want to set up a mainland company in Dubai with the activity being Technical Maintenance, then you can only add the activities that belong to its group, such as Carpentry, Plumbing, Interlock fixing, and painting, just to name a few.
3. Local Service Agent Requirement
The addition of a local service agent to your company requires you to pay a certain amount on an annual basis. Bear in mind that a Limited Liability (LLC) company does not require you to involve a local service agent in your company. However, a sole establishment company or a civil company will require you to do so.
4. Trade Name Options
The possibility of adding an English trade name for your business is allowed instead of obtaining an auto-generated Arabic name. However, this comes at an additional cost.
5. Visa Quota Allowance
The possibility of adding an English trade name for your business is allowed instead of obtaining an auto-generated Arabic name. However, this comes at an additional cost.
6. 100% Foreign Ownership
A key point to follow if any reader is not an expat from the United Arab Emirates is the possibility of obtaining 100% foreign ownership of your business with the answer being yes. In the past, obtaining a mainland company would involve a local from the United Arab Emirates having a certain percentage of share in the company, which would result in an expat not being able to have the complete business to themselves.
However, over the years, the rule has exclusively been changed for expats to feel at home by offering 100% foreign ownership in the mainland jurisdiction.
Business License Classification for Setting Up a Mainland Company in Dubai
Depending on the business activity you proceed ahead with, your business license will either be classified as a Commercial License or a Professional License.
- A commercial license is issued if your business serves trading purposes
- A professional license is issued if your business serves a service industry.
The documents required for setting up a mainland company in Dubai require you to provide your passport copy and the necessity of a UID number.
How Much Cost is Required for Setting Up a Mainland Company in Dubai?
Setting up a mainland company in Dubai involves various costs, which can vary depending on the nature of the business, the size of the company, and specific business requirements. Here are the key costs to consider:
| Expense Item | Estimated Cost (AED) |
|---|---|
| Trade Name Registration | 620 – 1,500 |
| Initial Approval from DED | 120 – 240 |
| Drafting and Notarizing MOA | 1,000 – 2,000 |
| Renting Office Space | 20,000 – 150,000 per year |
| Local Service Agent Fee | 5,000 – 15,000 per year |
| Trade License Fee | 10,000 – 50,000 per year |
| Visa Fees | 4,000 – 7,000 per visa |
| PRO Services | 5,000 – 10,000 per year |
| Attestation of Documents | 1,000 – 3,000 |
| Miscellaneous Fees | 1,000 – 5,000 |
| Total Estimated Cost | 50,000 – 250,000 |
Conclusion
Before you decide to proceed with a mainland company in Dubai, keep in consideration all the information provided in this comprehensive guide.
Still, if you face any confusion regarding setting up a mainland company in Dubai, then contact Bizhub for professional assistance.
Frequently Asked Questions (FAQs)
Yes, an office space or shop is obligatory for the creation of a mainland company to display a local existence.
A commercial license is required for trading businesses and a professional license is required for service-oriented businesses. It depends on the nature of the business activity.
A local Service agent is required for the sole establishment of a civil company but not for a Limited Liability Company (LLC).
Yes, you can choose an English Trade Name for your mainland company; however, this would be charged an extra cost.
