Dubai Mainland Company Requirements Explained
Can a foreigner own a business in Dubai? If you are looking to open a restaurant or a cleaning service with a customer base in Dubai, a mainland company formation plan is what you will need to have the right to operate on the Dubai mainland. We must note that this setup is in contrast to Free Zones that allow you to operate outside the UAE freely, but mainly do not allow you to run your business on the mainland. If you’ve already chosen a mainland business as your ideal entry into the Emirati market, we’re going to take a closer look at the ownership requirements for the permitted legal structures.
Foreign ownership and Dubai company licence options
As we previously mentioned in our article about setting up a mainland enterprise, only specific legal corporate structures allow for majority foreign ownership. If you would like to establish a limited liability company or LLC, the rules stipulate you cannot have full ownership of your enterprise. How does it work in practice? While you, as a foreigner, can have a maximum ownership stake of 49%, you are required to hire a local Emirati sponsor who holds a membership stake of at least 51%. If you’re carrying out commercial or trade activities, you are subject to the requirement of carrying out your corporate registration as an LLC.
If you want to carry out real estate brokerage activities, a one-person LLC requires mandatory full local ownership. At the same time, you as the foreign owner, receive independent representation rights through the Memorandum and Articles of Association (MOA/AOA) that are issued when forming the company.
If there is only one shareholder, there are more options for full foreign ownership. Why? That’s because company formation for Sole Establishment/Civil Companies only requires foreigners to appoint a local agent. You must only have the local agent to offer his or her services to represent your interests in front of the Labour and Immigration ministries. The regulations state the local agent for this type of enterprise does not have any decision-making role in your company’s operations. As such, you will have full managerial control over your entity.
And, in Dubai, there is another option that allows for full foreign ownership for freelance activities. What is this option? The Dubai Trader licence is only available to those individuals who are already residents in the United Arab Emirates. Therefore, it does not let you apply for any visas. In contrast to other paths for how to start a business in the UAE, you do not have to rent an office space with Ejari because you would register the entity at your residential address. For this option, unlike the other formats, you do not need to appoint a local agent or sponsor. Just like with other enterprises, you can apply for a limited set of licence activities.
This programme aims explicitly to integrate enterprises that operate on the internet and social media into their official database. Among the benefits allotted to Dubai Department of Economic Development (DED) Trader Licence holders are the opportunity to participate in exhibitions and workshops, facilities to manage imports and exports through customs and access to the Dubai Chamber of Commerce. You’ll also receive an establishment card that lets you employ up to three workers. In essence, you can license the business activities you work on remotely and the relevant authorities will be available to assist you as needed. You can get up to ten licence approvals within one similar activity group per licence in this scheme.
Are you interested in mainland company setup in Dubai?
If you’re interested in foreign direct investment options in Dubai, or foreign direct investment in the UAE with Dubai serving as your head office, we’re your ideal partner. Our expert Dubai mainland company formation team will guide you through the best options for taking advantage of the country’s business-friendly environment. With Dubai Expo 2020 months away, it is truly an exciting time to begin establishing a business presence in the Emirates. Begin your comprehensive company formation process today with the UAE incorporation professionals.
Adrian Oton, CEO Europe Emirates Group