Mainland Company Setup in Dubai
We’ve previously looked at the ‘hows’ and the ‘whats’ of mainland company formation in Dubai. We’ve examined the different types of businesses you can start in the Emirate, the most appropriate kind of business format to each type of activity and how a knowledgeable local service provider can assist with the process. Now we’ll be looking at the ‘whys’ and the ‘wherefores’, examining the advantages coming from choosing Dubai (and the UAE more broadly) as a location for business.
But first, what’s the difference between Free Zone vs Mainland in Dubai?
Before we go any further, let’s give ourselves a short refresher on the distinctions between onshore ‘mainland’ company types and their Free Zone counterparts in the jurisdiction. While Free Zone companies offer a significant degree of flexibility in terms of foreign ownership of the entity and financial and regulatory requirements, some limitations are depending on the activity they wish to carry out. Plus, unlike mainland companies in Dubai, they can generally only do businesses within the Free Zone itself, or outside of the UAE. In contrast, a Mainland company can do business with other entities within the UAE, and with UAE citizens, potentially opening up a significant local and regional market.
Free Zones cover just about any business activity that you can think of (media, aviation, healthcare, and technology, to name but a few). But as its authority governs each zone, the regulatory requirements are likely to differ. In contrast, a mainland company offers a degree of internationally-recognised standardisation and stability, as well as being licensed by the Department for Economic Development, for an additional layer of reassurance. All corporate entities in Dubai can also take advantage of the Emirate’s straightforward and advantageous tax system. In Dubai, corporate taxes are in practice imposed only on branches of foreign banks and hydrocarbons companies, with withholding taxes not payable, and only income sourced in Dubai subject to tax, under the territorial tax rules in place. So operating as a mainland, or ‘onshore’ company is no less advantageous from a tax perspective!
Mainland business in Dubai
Mainland companies incorporated in Dubai are permitted to carry out commercial activities, to act as a branch for a foreign parent company, or to act or advise locally using expertise gained outside of the UAE. Under the auspices of these activities, Mainland companies can provide professional services (or offer professional services to professionals), for example by providing consultancy services, operating in the area of ICT, or running restaurants or other such establishments. However, mainland companies can also work on a commercial level, undertaking either trade or industrial activities, or acting as manufacturers, food brokers, etc.
So, you’ll see that there is a wide variety of permitted business activities for a Mainland firm located in the jurisdiction. The type of entity selected (for example, LLC, civil company, etc.) is likely to be driven by the desired business opportunities. The UAE also announced the elimination of the requirements for involvement by an Emirati citizen or another representative for most sectors. These changes aim to make mainland company formation easier and more appealing to foreign entrepreneurs.
Interested in beginning the Dubai Mainland company formation process?
It is not necessary to go over the steps required to set up a mainland company in Dubai because we have detailed them in earlier articles. In any case, the requirements are fairly standard for the Emirate, and for the region, encompassing initial registration, obtaining a trade license, securing a commercial space in which to base operations, and incorporating the entity, paying fees and providing the relevant documentation as required.
A knowledgeable local service provider like Europe Emirates Group is likely to prove invaluable throughout the entire process, in terms of advice, the provision of administrative assistance and services, and just plain local know-how. A local service provider also keeps you abreast of regulatory changes and can assist you in establishing your mainland company under the new favorable conditions or adjust your current structure to comply with the rules. However, it’s that this stage where they show their strength by assuring a smooth and streamlined entry into the UAE market for your business. If you would like to get started, contact our team today.
CEO, Europe Emirates Group